The Town Council voted 4-0 to adopt a second Airport Area Infrastructure Tax Increment Finance (TIF) District to facilitate future development in the area of Pettengill Road.
Councilor Jim Butler was not present for the vote due to work obligations.
The second TIF will be smaller than the original Pettengill TIF, which will dissolve at the end of the year, having generated the income required for the Town to meet its financial obligation to reimburse developers in the TIF for a new traffic light.
The total assessed value of the newly adopted TIF District is $607,053.
Development of the parcels included in the new 202-acre TIF District will be industrial in nature, with the tenant for a proposed manufacturing facility on Pettengill Road moving through the Town’s permitting process to be announced in the near future (see story page 1).
As part of plans for the industrial facility, the developer has proposed construction of North Spur Road, which will connect the facility to the new Pettengill Road.
With incremental tax revenue from the new TIF, at an amount not to exceed $1.2 million, the Town will reimburse developers for the construction of North and South Spur Roads within the District.
Upon meeting the obligation, the TIF District will immediately terminate.
Based on the financing plan, there will be no bonded indebtedness or other negative impact on the Town, Rockingham County or school tax rates that could be directly attributed to implementation of a TIF District. as the reimbursement plan is funded solely by tax payments to the TIF District, according to Town Manager Kevin Smith.
Since the creation of the first airport TIF District, the Town has added $78 million from new development in the Pettengill Road area, according to Smith, who notes the revenue is going back on the tax rolls this year.
“Only $11 million in valuation, about $232,000, was held back for the Town’s obligation to a new traffic light,” he said.
Further, Smith anticipates with the next users coming through the pipeline, future development in the Pettengill area will generate an additional $90 million in valuation.
“In our conversations with landowners and developers, we have been told if the Town hadn’t done these (TIFs), there would be no revenue to speak of,” Smith said at the Council’s Oct. 19 meeting. “They had other options to build in other places.”
Speaking to critics of the Town’s use of the TIF Districts to entice major developers to choose Londonderry, Councilor Tom Freda said they should “bet with their own money.
“If you want to entertain the idea the developer would have folded and built even if the Town hadn’t committed the $250,000 for the traffic light, that’s fine when you’re betting your own money; but don’t bet with my money or someone else’s money,” he said. “You need to look at the big picture, and the stream of revenue coming in.”
“We’re at a tipping point in the raising of revenue through smart industrial development in the community, and we’re at the point now where we’re seeing the tax rate starting to come back down. You don’t see that in any other communities we like to compare ourselves to, and gauge how we’re doing,” Councilor Tom Dolan said. “People in this community should start seeing the tax rate tick down as development moves forward. We are smartly engaging industry at a time when the economy is beginning to improve. We are in a sweet spot of development and we got on the train at the right time.”
Dolan added that the businesses coming to town will pay handsomely in terms of revenue to the Town, business tax to the State and job opportunities for young people looking to stay in the Granite State.
“This has been a long time coming, especially in the Pettengill area. We have been planting the seeds and working on this for over a dozen years,” he said.
The first place people will see the benefit of this development will be the residential tax bills, then employment opportunities, and through community colleges and universities providing training to new employees at the companies, according to Dolan.
“There has been a hidden benefit to what we’ve been doing, and we’re starting to see that benefit now,” he said.