BARRE — Early voting is underway, and city officials, hoping to avoid what they believe would be a momentum-sapping loss at the polls Nov. 5, are preparing to pull out all the stops to sell voters on tax increment financing.
The facts, they say, are on their side, but city councilors aren’t taking any chances in the run-up to a single-issue special election that could kill plans for a Summer Street redevelopment project.
Approval of a $2.2 million request to use tax increment financing to expand and enhance downtown parking is crucial to the Central Vermont Community Land Trust’s plans to develop a Summer Street campus. The proposed complex would provide a new home for the Barre Senior Center and a boost to the grand list, which is already on the rise thanks to a number of downtown redevelopment projects.
Those projects, and others like them, will generate new tax revenue, some of which can be retained by the city and used to cover the cost of infrastructure improvements like those being proposed. It’s called tax increment financing, and Barre is one of a handful of Vermont communities authorized to keep tax revenue that would otherwise be paid to the state to foster economic development in a targeted district.
It is “a no-brainer,” according to City Manager Steve Mackenzie, but it is also complicated, in the estimation of Councilor Paul Poirier. This week Poirier stressed the importance of keeping it simple while stepping up outreach to voters, who will confront an admittedly convoluted question when they head to the polls next month.
“I don’t want people to get confused,” Poirier said, suggesting the city create a simple brochure — complete with sketches of the proposed parking areas — for mass distribution in the days leading up to the vote on a plan that officials insist won’t require any increase in property taxes.
That point can’t be understated, according to Mackenzie, who feared some voters might mistakenly conclude the city is going on a taxpayer-funded spending spree to acquire and develop downtown parking.
“When people hear the word ‘tax’ they immediately jump to the conclusion that their property taxes are going to increase, and that is not the case here,” he said. “There will not be one penny of increase in the property tax rate of the city because of … the TIF district, and it’s important that people understand that and have a comfort level with that being the case.”
Councilor Lucas Herring agreed.
“It’s not the ‘T’ for taxes, it’s the ‘IF’ (for) ‘increment financing,’” Herring said. “If we don’t have (a favorable vote) we don’t get the increment or the financing.”
That is in fact the case, according to the city’s chief planner, Michael Miller, who provided the council with a crash course on TIF districts Tuesday night.
According to Miller, the city’s pending request is somewhat less speculative than votes in other TIF towns, because some of the identified projects, like the new Merchants Bank, are already generating revenue that can be applied to infrastructure improvements, and others, like City Place and the Blanchard Block, are nearing completion.
Miller said the city’s TIF district, which runs from Route 62 to Prospect Street and from the Stevens Branch to Summer Street, already has roughly $2.5 million in new value. He said that figure is expected to bump up to $11 million when City Place and the Blanchard Block are added to the mix next year. Based on the current tax rate, he said, the city would be able to keep $256,000 that would otherwise be paid to the state next year and use it to finance the proposed improvements.
Assuming Summer Street Center is built as proposed, Miller said that figure would increase to almost $350,000. That, he said, would be enough to finance $8 million in improvements in a city that is currently asking to incur $2.2 million in long-term debt.
“We have clearly enough increment to cover the bond proposal,” he said, suggesting the proposed improvements would help broaden the city’s tax base by encouraging additional redevelopment that could bring even more jobs downtown.
“The city gets improved infrastructure and growth in our grand list,” he said. “We win twice.”
According to Mackenzie, an added advantage is that the projects being proposed will advance plans for the redevelopment of Merchants Row and the area between North Main and Summer streets. Those plans, he said, predate creation of the TIF district and are key pieces of a downtown renaissance that is underway.
“The TIF district is a very viable means to provide the financing to do all of these improvements, and … it will keep the momentum going,” he said.
Mayor Thomas Lauzon said a rejection by voters next month would be more than just a setback in an effort to revitalize the city’s central business district and continue to increase its grand list.
“It would be the end,” he said. “People need to hear the truth.”
Lauzon challenged councilors to personally reach out to 75 people apiece before Nov. 5 in hopes of persuading them to vote in favor of the TIF request.
Poirier suggested recruiting the local Democratic and Republican parties to assist in an outreach campaign motivated by some of the feedback he has heard.
“(Some) people are saying: ‘I’m voting no (because) I don’t trust you guys,’” Poirier said.
Lauzon said he would happily rest on what he characterized as the current council and city administration’s track record of success.
“We have gotten more done in the last five years than anyone did in the last 20,” he said, pointing to Barre’s newly reconstructed Main Street and soon-to-open City Place as prime examples.
“When people say: ‘We don’t trust you,’ I don’t know how to respond to that,” he said.
That said, Lauzon agreed with the need to increase outreach efforts and volunteered to draft an informational brochure to distill a financing concept he conceded can be difficult to grasp.
“Any normal person can glaze over when they look at this stuff, but this isn’t pie in the sky,” he said. Central Vermont Community Land Trust is ready to develop, finance and build “a fabulous building on Summer Street,” he said, that “complements City Place, and hopefully we’ll do more.”
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