Economic development again on the agenda of some towns
As area towns slowly emerge from the cash-strapped depths of the recession - and developers appear more willing to invest - officials are dusting off economic development plans with a hard-learned lesson in mind: Development won't just land on their doorsteps.
Even towns that already boast a considerable commercial or industrial presence are starting to seek ways to boost business. In December, Groton Representative Town Meeting member John Scott proposed the creation of an economic development agency that would operate independently of city and town officials. Waterford, armed with grant money from the state, has enlisted a team of planners, architects and economic consultants to study the feasibility of a "Main Street" that supports "village-scale" economic development.
And in Montville, the Town Council has begun meeting with the Economic Development Commissison, whose members want it to be more active than in the past when it come to creating a better climate to attract business.
"You're starting to see some proactive activity by towns to spur economic development," said Kevin Maloney, spokesman for the Connecticut Conference of Municipalities. "The economic recovery has been modest and I think, after looking at the activity for a couple of years to see if growth could start to spur on its own, they're thinking that they have to be more active in the economic development area."
The town of North Stonington makes a good case study for the region's renewed interest in attracting businesses - and for just how much development is necessary to give residential taxpayers some relief.
"When people start talking about (needing) economic development because their taxes are too high, I don't think they realize how much you need to make a difference," said North Stonington Tax Assessor Darryl DelGrosso. "You need more than you think."
In North Stonington, as in any bedroom community, residential real estate forms the majority of the town's financial base, comprising about 70 percent of the grand list. Including vacant land, homeowners cover about 82 percent of the town's expenses. This percentage excludes state aid - which primarily funds the town's schools - and casino revenues, among several other minor sources that go toward the $19.3 million budget. Taxes support more than $13 million of that figure.
At an April 2012 community forum, most residents said alleviating their tax burden was most important to them. The town's recently completed Plan of Conservation and Development also concluded that employment opportunities and the availability of goods and services are comparatively unimportant.
But the town, like many others, faces obstacles that have rendered "economic development" more of a campaign-season buzzword than anything else.
Officials often tout North Stonington as a midway point between Boston and New York, surrounded by highway infrastructure.
But the town has no sewers and only limited public water. Its roads, though scenic, are narrow, winding and unlit. Cellphone service in places is spotty at best.
Even if a developer were to submit a proposal to the Planning and Zoning Commission, its stringent regulations remain lengthy and convoluted. Developers must jump through several - and often costly - hoops, including a cumbersome special permit request that requires a public hearing.
And while no one doubts the need for more commercial property, officials have yet to make the investment.
When taxpayers approved a nearly $4.5 million government operating budget last May, the town's Economic Development Commission received $6,272, or about 0.01 percent. Its eight volunteers, who meet monthly, make up the town's only group charged with finding ways to increase taxable property. And although they are aided by the Planning and Zoning Commission and Town Planner Juliet Leeming, they remain overwhelmed and underfunded for the task at hand.
That's something EDC Chairman Brett Mastroianni wants to change.
This Wednesday, the Board of Selectmen, the Planning and Zoning Commission and the Economic Development Commission are scheduled to discuss one of the Plan of Conservation and Development's recommendations: hire a specialist to market the town.
The EDC plans to request the town hire someone to work 18 to 20 hours a week at a cost of $25,000 to 30,000 a year. The person would work during the day to market the town as a business-friendly place, complementing the work commission members can do only after they're done with their day jobs.
"This position would dramatically increase what we can do as a commission," Mastroianni said.
But until a professional is hired, the other goals of the Plan of Conservation and Development - namely, bolstering the town's economic competitiveness and planning proactively - are on hold.
Like residents of other small towns in the region with a rich history, the ones in North Stonington continually pressure their leaders to balance small-town character with an adequate commercial tax base.
This fierce pride in agricultural roots provides another barrier against any plans for growth. Over the years, the town has rebuffed several development proposals, or stalled them long enough through hesitation and overly strict zoning regulations that they eventually fell through. Others walked away because of the lack of infrastructure.
These include a $1.5 billion plan for film and television studios, a performing arts complex, a trade school, retail and restaurants; a $400 million auto racetrack; and a Six Flags amusement park.
In the place of what they consider retail monstrosities, residents trot out the same few perennial ideas. Coffee shops, greenhouses, year-round farm stores and other mom-and-pop-type establishments make the cut; big-box stores do not.
What the proponents of these plans don't realize, DelGrosso said, is that the assessed value of a farm store - like the one depicted in the Plan of Conservation and Development - would be only about $168,000. Using the current tax rate of 25.6 mills, the bottom line for the town's coffers is $4,300 in tax revenue.
DelGrosso said towns also must take into account the possible elimination of the car tax as proposed by Gov. Dannel P. Malloy last year, annual budget increases due to inflation and the fluctuation of state aid, which has been decreasing steadily. All of these factors could leave towns with even more ground to make up.
North Stonington's neighbor, Preston, is another rural town where commercial tax revenue is lacking. But unlike North Stonington, Preston is reaping the benefits of a recent success.
Last February, Julia Tate Properties LLC completed a $13 million construction of a Hilton Garden Inn at Route 2 and Watson Road, taking over a failed hotel development project. Assessed at $9.8 million, the hotel has provided the town with an additional $110,368.54 in tax revenue - "a lot for a small town," said First Selectman Robert Congdon.
With North Stonington's tax rate, one Hilton Garden Inn would yield just over a quarter-million in tax revenue - less than 2 percent of the total taxes collected by the town.
To shave even 10 percent off the average North Stonington taxpayer's annual bill, the town would need an additional $75 million in development, or $52.5 million in assessed value. In terms of the 2012 assessed values of some major commercial taxpayers in other towns, that's about five Target stores or five Home Depots.
Of course, recruiting these companies is both unlikely and unwelcome there. Mastroianni said light manufacturing is a more viable option, and one that won't rankle neighbors.
But despite some increasing openness to business diversity, DelGrosso said many residents still haven't grasped the weight of the challenge.
"I don't think they realize how much they really need to make a dent," he said.
North Stonington by the numbers
North Stonington's preliminary grand list - the list of all taxable property in town - stands at $528 million for 2013, raising about $13.5 million in taxes.
Commercial and industrial real estate together represent about 10 percent of the grand list. To accommodate even a 1 percent budget increase, the town's tax rate - the amount paid per $1,000 of assessed value - would need to go up from 25.6 mills to 25.8 mills.
In order to hold last year's rate steady with new development, the town would need the project to be appraised at about $7.5 million - an assessed value of $5.28 million, yielding $135,168 in tax revenue.
The average homeowner in North Stonington pays about $4,287 in real estate taxes annually, based on an average assessed value of $167,491 from 2,208 residential real estate accounts.
With no new spending in the budget, $7.5 million in development - an assessed value of $5.28 million - would save a taxpayer 1 percent, or $42.87.
The town would need $75 million in development - assessed at $52.5 million and yielding a tax revenue of $1,344,000 - to save the average taxpayer 10 percent, or $428.70.
Source: North Stonington Tax Assessor Darryl DelGrosso
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