Downtown Groton in line to become TIF district
Groton — The downtown area is slated to become Groton's first Tax Increment Financing district, a move the town said is intended to spur economic development along the Route 1 corridor between Buddington Road and Sunnyside Park.
Tax Increment Financing is a financing method to help catalyze development that otherwise wouldn't happen, said Director of Planning and Development Services Jonathan Reiner.
The proposed 145-acre TIF district goes "hand-in-hand" with Groton's zoning rewrite project, which recommends a Mixed-Use Town Center zone for downtown, and comes at a time when the expansion of Electric Boat's workforce is putting more demand on the region and during an upturn in the economy nationally, Reiner said.
By creating the TIF District, Groton hopes to grow and diversify its tax base and support employment opportunities, according to the Downtown Groton TIF District Master Plan. Enhancing the town's quality of life and sense of place by improving infrastructure, creating housing and public spaces, making the area more pedestrian- and bicycle-friendly, helping existing businesses and revitalizing properties when necessary, are other goals.
The objective is to have “a vibrant, walkable destination that serves the needs of Groton and the surrounding region for housing, for retail, for business, for pleasure,” Reiner said.
“It would become a bit of a destination but mostly serve the needs of the people of Groton and contribute to the tax base,” he said.
Tax Increment Financing
Under the proposed TIF District, the base level of tax revenue presently being collected from properties in the district would continue to go into the town's General Fund, Reiner said. But over time, as assessed values in the district increase, half of that incremental increase over the base level of taxes would go to the General Fund, while the other half would go to a TIF District Master Plan fund.
The funds in the TIF account could be used toward public improvement projects, from sewer infrastructure upgrades to streetscape improvements, and the Town Council also would have the option to transfer money to the General Fund, if no projects are needed, Reiner said.
The town also could enter into credit enhancement agreements with developers to incentivize certain developments.
These could be used in cases when a developer proposes to build a project that would create a substantial increase in property taxes but which isn't panning out due to high land costs and the need to invest in infrastructure improvements, high construction costs or a higher level of risk, Reiner said. For example, the town is looking to get more people living downtown through high-density apartments connected to sidewalks, and more opportunities for commercial development in updated plazas and shops, he pointed out. But those building or renovation projects can be expensive and require infrastructure investments.
The town and developer could negotiate a CEA that would give back a portion of the increase in property taxes to the developer to help finance some of a project’s public and private improvements for a period of time, after the developer paid taxes, Reiner said.
To be eligible, the developer would have to invest over a million dollars and the project would need to meet design and performance standards outlined in the master plan. The developer would have to show Tax Increment Financing is needed, and the Town Council would have the ultimate authority on approving any agreements, he said.
The town also is working with the City of Groton on a proposed TIF District for Thames Street and the Five Corners area, which will go to public hearing in September, Reiner said.
Consistent with Plan of Conservation and Development
The Planning Commission on June 11 decided the downtown TIF District master plan was consistent with the town's Plan of Conservation and Development, because it "promotes community character, encourages sustainable land use development" and provides a tool for development consistent with recommendations to encourage mixed-use developments and higher housing densities in certain areas and to "create a viable mixed-use downtown," according to a memorandum.
During the Town Council's public hearing Tuesday on the master plan for downtown, one speaker, Gretchen Chipperini, weighed in on the plan. She said she is not opposed to Tax Increment Financing but is opposed to dividing the town into areas and making them districts.
"I don’t see why it can't be on a first come, first served basis," Chipperini said.
She said that if the town is going to choose areas for districts, it should at least initially choose areas with the most chances for success in attracting businesses. She identified the areas with the greatest chance of success to be: first, anywhere near the highway that has sewers; second, Mystic; and third, the downtown area.
The Town Council approved a Tax Increment Policy last year. Town Manager John Burt said the master plan for downtown will be on the Town Council Committee of the Whole agenda on Tuesday with the intent of it being approved at the Aug. 6 Town Council meeting.
"When utilized correctly, TIF can be a very powerful tool to help spark economic development/redevelopment in that part of town," Burt said. "I'm excited to see what kind of interest it generates in the area."
Stories that may interest you
Wall Street rumbled to the edge of a bear market Friday after another drop for stocks briefly sent the S&P 500 more than 20% below its peak set early this year
The former Mystical Toys will be the home this year for an apparel shop selling Mystic branded items and a pop-up museum celebrating the 100th anniversary of the drawbridge.
The modification will support submarine industrial base development and expansion.