The Hippo

HOME| ADVERTISING| CONTACT US|

 
Sep 23, 2018







NEWS & FEATURES

POLITICAL

FOOD & DRINK

ARTS

MUSIC & NIGHTLIFE

POP CULTURE



BEST OF
CLASSIFIEDS
ADVERTISING
CONTACT US
PAST ISSUES
ABOUT US
MOBILE UPDATES
LIST MY CALENDAR ITEM


Secret tax breaks
NH’s bid for Amazon HQ2 might be better than it seems

10/26/17
By Ryan Lessard news@hippopress.com



 When the first rumblings were heard that New Hampshire officials were working on a proposal for the highly-sought-after Amazon second headquarters location, it was largely met with a mixture of tepid excitement and skepticism. How, after all, can New Hampshire compete with other metropolitan centers that can offer such significant tax breaks? It turns out, the Granite State had an ace up its sleeve.

 
HB 316
New Hampshire’s secret weapon is a bill that passed largely unnoticed and was signed into law by Gov. Chris Sununu on June 29. House Bill 316, proposed by Rep. Frank McCarthy of Conway, makes is possible for communities to offer property tax breaks of up to 50 percent for up to a 10-year period. Previously, this was only possible in northern Coos County. The idea is to attract businesses to build in the state.
The bill took effect on Aug. 28, and only a small handful of communities have looked into using the tax incentives since then. 
When Sununu released the state’s proposal for Amazon to locate its second headquarters in Londonderry, as part of the latter phases of the Woodmont Commons development, the main text of the multi-page document does not make any mention of this bill. 
In fact, officials chose instead to highlight New Hampshire’s built-in low taxes and absence of broad-based income and sales taxes. They further criticized other cities for offering tax breaks as a “gimmick.” 
While New Hampshire won’t be offering any additional tax breaks as a state, the town of Londonderry very likely would.
In a letter from Londonderry Town Manager Kevin Smith to Amazon, attached to the proposal, he talks about the “shovel ready” real estate near I-93 that will have its own dedicated exit built. He wraps up by saying, “Finally, as an added incentive, the Londonderry Town Council is willing to offer Amazon a negotiated multi-year property tax break by taking advantage of a new law signed by Governor Sununu this past year.”
The hope is that while Amazon gets a break for one to 10 years, the town reaps the benefits in perpetuity after that period. 
Smith said he let the state know about the Woodmont Commons location soon after Amazon announced it was looking for a second location in September. 
“At the same time I had been talking with the town council about taking advantage of that legislation … and they were all in favor of it,” Smith said.
Woodmont Developer Michael Kettenbach said he was notified by Sununu that the site was selected a week before the public unveiling of the proposal.
Smith said the state’s plan was to provide a 30,000-foot-high overview in its initial offering and get into some of the details and dangle some of the carrots like the community-level tax breaks if it gets into the second round. 
He said he thinks the incentive would be hard to beat, but the specific details would have to be negotiated with Amazon and the company would have to do its own math to compare it to other offers.
 
Priorities
Amazon plans to invest $5 billion and hire 50,000 people at its new headquarters. In its request for proposal, it says it wants to be about 30 miles from a population center, within 45 minutes of an international airport, one or two miles from a major highway and have access to mass transit on site. 
The Londonderry site doesn’t have access to mass transit and is about 40 miles from Boston, but the RFP also said a tax friendly environment will be an important factor.
“A stable and business-friendly environment and tax structure will be high-priority considerations for the Project. 
Incentives offered by the state/province and local communities to offset initial capital outlay and ongoing operational costs will be significant factors in the decision-making process,” the RFP states.
Property taxes in New Hampshire are very important to communities that have little other sources of revenue from which to fund its public services. So offering tax breaks is often unfeasible. But Londonderry was the fastest growing town in 2016 with several businesses moving into industrial parks near the airport. And with the promise of mixed-use and residential expansion in the Woodmont Commons development, it’s expected to have a bountiful tax base with the wiggle room to offer a significant incentive.
“For each of the last three years, our operating budget has grown,” Smith said.
He said they’ve added policemen, fire trucks, personnel at town hall and built a public works garage and an addition to a senior center.
“Yet, in those three years, the tax rate has gone down on the town side every single year. And that’s largely because we’ve been growing the tax base,” Smith said. “As such, we’re in a position where we have one of the lowest tax rates in our whole region. So we can afford to throw out incentives to get companies to come in, because we’re not starving for the tax money right now.”
The state proposal also made mention of plans to connect commuter rail from Massachusetts up to Nashua and Manchester.
More than 100 cities across the country are competing for this bid, CNBC reported, including Boston, as well as Worcester, Fall River and New Bedford, Massachusetts. 





®2018 Hippo Press. site by wedu