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Middlebury seeks tax privileges: Special tax eyed for parking garage
MIDDLEBURY — The town of Middlebury is joining a lobbying effort in Montpelier to lift the state’s current cap on the number of towns that can use Tax Increment Financing, or TIF, as a way of bankrolling improvements to public infrastructure.
Specifically, the Middlebury selectboard sees TIF as a potential revenue source for a new downtown parking garage.
“We will not make inroads on a parking garage without something like this,” selectboard Chairman Brian Carpenter said while advocating for TIF at a recent board meeting.
TIF gives communities the ability to capture and use most of the increased local property tax revenues from new development in a specific geographic area to pay back investments on the infrastructure (such as water and sewer connections) to help make that new development possible. Current state law limits the use of TIF to a combined total of 11 specific districts in the municipalities of Burlington, Milton, Newport, Winooski, Colchester, Hartford, St. Albans and Barre.
But officials in several other communities have expressed a desire to get in on the act. David White of the Burlington-based real estate company White & Burke is lobbying the Legislature on behalf of four communities that want to join the TIF club: Bennington, Rutland, Springfield and Montpelier. He has been actively recruiting others — including St. Johnsbury and Middlebury.
White made his initial pitch to the Middlebury selectboard back on Feb. 14. The board didn’t take him up on it then, but has since warmed to the idea, with the end-game being a parking garage to augment downtown spaces. Past parking studies have shown Middlebury to have adequate parking, but many of those spaces aren’t deemed close enough to shops, offices and restaurants.
The Middlebury board on Feb. 27 voted 6-1, with Selectwoman Susan Shashok opposed, to join White’s consortium of Vermont towns in the lobbying effort to lift the TIF cap. The board also directed town Manager Kathleen Ramsay to look within the budget for the town’s $5,000 contribution to the lobbying effort.
White has some experience with TIF. He helped secure TIF status for four of the original 11 TIF districts. One of his company’s services is to help developers negotiate the TIF process in communities that have it.
Officials said Middlebury’s chances of gaining TIF privileges likely rest in bill S.99, currently being reviewed by the Senate Finance Committee. S.99 proposes to allow the Vermont Economic Progress Council to approve up to two TIF districts per county, for up to seven years.
In order to advance, the bill must make the legislative crossover deadline of March 17. In other words, the full Senate must act on S.99 and send it to the House by the end of next week, or it is likely to die this year.
Rep. Robin Scheu, D-Middlebury, is a member of the House Corrections and Institutions Committee. She is also executive Director of the Addison County Economic Development Corp., and supports the use of TIF as a tool for business growth. She signed onto a bill this year authored by Rep. Fred Baser, R-Bristol, which proposes TIF as a financing mechanism for more workforce housing in the state.
Scheu said she’s pleased to see TIF getting more debate in the Legislature this year.
“In the past, it hasn’t been given a lot of time, and this year, there’s a lot of buzz about it,” Scheu said. “People are paying attention and they are learning more about what it means. There are some misconceptions about how TIFs work.”
Among those misconceptions, according to Scheu, is the notion that TIFs divert revenues from the state’s education fund. She and other TIF supporters argue that the new projects that generate the new TIF revenues would not have occurred were it not for TIF. So the tax dollars being used to pay the TIF debt would be money that otherwise wouldn’t have been generated.
Sen. Claire Ayer, D-Addison, was until last year a member of the Senate Finance Committee. She said talk of expanding TIF had cooled off during her time on that panel.
“I was kind of surprised to see TIFs being revived,” Ayer said of the renewed buzz.
Historically, foregoing tax revenue has often been an easier sell that raising taxes and fees, she said.
“We tend to give away taxes and think it doesn’t cost any money, which is much easier to do than actually appropriate funds,” Ayer said.
Middlebury officials believe TIF could ultimately deliver a parking garage, perhaps within the context of a mixed-use development slated for a town-owned parcel — also called the “Economic Development Initiative (EDI)” lot — behind the Ilsley Library. NexBridge Partners emerged from four groups that expressed interest in developing the lot. The NexBridge plan includes a multi-story structure that would accommodate a variety of retail, office and residential uses. Plans also include a parking garage.
At least one firm originally interested in the EDI parcel bowed out citing the difficulty of designing a profitable plan within the town’s rules on how the land could be developed.
ECONOMIC DEVELOPMENT
A majority of the selectboard believes TIF could make it more affordable for developers to include the parking garage within the EDI project, or as part of some future development in town.
“This is the one vehicle that might make (parking) a reality for the town,” Carpenter said.
Some of Carpenter’s colleagues asked if the town could accomplish its TIF objective through its legislative delegation, as opposed to through a lobbyist.
“I don’t like the idea of spending $5,000 for someone to lobby,” Shashok said.
Selectman Victor Nuovo agreed.
“I don’t have confidence in Mr. White to bring that about,” Nuovo said. “I’m not inclined to give him $5,000 to be our lobbyist. We have two active legislators who I think would work hard for us on this.”
But Carpenter said the town’s representatives can’t always be in corners of the Statehouse where key decisions are made on bills that aren’t within the purview of their own respective committees.
“Someone needs to be there,” Carpenter said. “If we want to be in there… $5,000 is pretty cheap for a lobbyist.”
Selectman Nick Artim agreed.
“The return on investment is apparently very large,” he said.
Selectwoman Donna Donahue, speaking at her last board meeting, urged the town to pursue TIF.
“A $5,000 lobbying fee would not be my first choice,” Donahue said, but added, “If we get parking, it would be money well spent.”
Selectwoman Heather Seeley said two people, within the space of a week, told her they had to turn around and leave downtown Middlebury because they couldn’t find a place to park.
“Anything we could do to change that would be to our benefit,” she said.
Reporter John Flowers is at [email protected].
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