Reshuffling the Deck Chairs on South Main Street

Ray Duckler’s recent column in the Monitor once again extolls the virtues of redevelopment on South Main Street. And once again city officials confuse tax base expansion with tax rate. Anytime there is new or redevelopment that has a greater value, the city’s tax base expands. Tax rate refers to what we all pay. Tax rate is determined by the value of properties and how much the city, schools and county need to operate. If certain properties are exempted from contributing taxes for the these services or receive a tax holiday, then the tax rate reflects this loss of funds for services.

No matter how often and how creatively the deck chairs on the Titanic are rearranged, the fact remains the ship is still going down.

Steve Duprey’s latest project, the razing of the Bindery building and the redevelopment of that site, will bring no new businesses to Concord. In fact, I believe no new businesses have moved into his and only two new businesses - that previously didn’t have a presence in Concord - have moved into . And the 55 apartments at Mennino place which were going to have up to half the units rented to artists, at last count, four of the apartments were rented to those connected to the arts community. 

In addition to virtually no new businesses locating to Concord, despite all this new construction, all these projects received special tax considerations. All these projects will contribute no new taxes for city services, our children’s education, or county expenses for years into the future. Depending on the tax incentive program they signed onto they will either pay taxes that will be used to pay only for the cost and maintenance of their projects or they will not pay any taxes on the new value of their buildings.

Add to this list the . When it is completed it will pay no new taxes for seven years for the first floor retail space and nine years for their residential units. 

And what about the commercial space that is being left vacant as a result of this titanic shift? Best case scenario, the buildings owners are able to quickly rent their properties. But what if they can’t? Unlike the privileged few who receive special tax considerations, they continue to pay their property taxes to help fund city, school and county services. And what happens if these properties remain vacant for an extended period of time? The properties owners can ask to have their taxes reassessed to reflect their drop in income.

So, if we have no new taxes to pay for services and we have a drop of tax revenues because of empty commercial space, who pays? That’s an easy one - we do. Homeowners and businesses that didn’t make the right connections at city hall to get these great deals.

The state of New Hampshire and Concord do not have methods to evaluate how tax incentive programs impact tax rates, job growth and our communities ability to pay for services. There is no system in place to determine how much deferred maintenance of our city’s infrastructure will cost us when the taxes are finally available from these projects. And if promised revenues will be enough to pay for for the multiple tens of millions of dollars it will cost to catch up.

Revitalization, redevelopment and adding to the tax base can and should be good for a community. But on South Main Street, tax incentives have led to virtually no new businesses, only a promise of new revenues seven to 20 years in the future and a shifting of the tax burden to those already carrying the load. Add to this no way to measure the short and long term impacts of theses programs.

If the city is to continue moving forward with redevelopment and tax base expansion our city leaders should at least be able to tell us, using an objective standard, that there is and will be a benefit to the community. All our city leaders have done to date is to replace the shuffling of deck chairs with the Captain of the Costa Concordia. That's what I think.