LENOX — Town Hall leaders are crafting an across-the-board policy requiring new businesses seeking tax-break agreements to demonstrate why their projects require start-up incentives designed to ease property tax burdens temporarily.
On Wednesday evening, the Selectboard is expected to discuss a revised blueprint prepared by Town Manager Christopher Ketchen and Town Planner/Land Use Director Gwen Miller aimed at creating a level playing field for potential applicants.
The need to agree on an overall policy on tax incentives follows the Toole Lodging Group's proposal for a 10-year, $835,000 special tax agreement for its $8.3 million, 92-room Courtyard by Marriott project now under construction at Brushwood Farms off Routes 7 and 20.
If the Selectboard approves Toole's request, voters would have the final say at the May 5 annual town meeting. A simple majority is required for approval.
Selectmen have signaled that when they consider that application, they may propose a scaled-down five-year agreement worth $300,000 to $400,000.
Ketchen and Miller presented their initial draft policy proposal to cover any and all local property tax-break applications during a 90-minute special meeting of the Selectboard on Friday afternoon.
While developers and new business owners may approach the town to seek tax incentives, Miller said, "we also want to be able to make an offer if we're trying to attract a certain business to town or if we have a certain piece of property we're eager to see redeveloped or used to help diversify our tax base."
According to the draft policy, businesses would have to show that their major investment would serve the public interest, benefit the community, improve the town's infrastructure and "catalyze additional development in areas of the town targeted for growth or redevelopment."
Businesses would be asked to list specific numbers and types of jobs that would created or maintained through approval of tax breaks.
Miller, noting that most of property tax revenues in Lenox are generated by residential properties, said that a policy goal is to diversify the tax base by adding commercial and industrial projects in order to ease the burden on homeowners.
Ketchen noted that the proposed policy will be shared with the Board of Assessors for their feedback.
The amount of an applicant's investment would be another factor to consider, as well as documentation showing whether the project could be undertaken without a local tax incentive, Miller said.
Businesses seeking special tax agreements also would need to demonstrate whether their project has received town permits, she added.
Applications would be scored through points awarded based on investment amounts, employment levels and whether the project contributes to the restoration of blighted, vacant or underused properties.
Selectboard Chairman Edward Lane voiced doubt over a requirement that an applicant's project must already be approved and permitted in order to begin applying for tax incentives. He suggested that the town's zoning board should know in advance whether such breaks are being requested.
"I wouldn't want to us to be spinning our wheels on projects that are pie in the sky and don't have much chance of getting through our permit process," Selectman David Roche said. He also advocated close scrutiny of employment targets for developers applying for special tax agreements.
Selectman Channing Gibson cautioned that some prospective new businesses could be deterred if they can't get some tax relief. "They need to know that it's a real option," he said. "It's really important to make these guidelines flexible enough to give us discretion for different situations."
Roche, citing "close to a dozen empty storefronts," downplayed objections that approval of a tax deal would "open the floodgates."
"Is that the worst thing: 'Too much development?' " he asked, noting that many young people leave town "because we have nothing to offer them." Roche noted that the hospitality industry creates jobs with "transferable skills."
Selectman Kenneth Fowler addressed criticism that the tax-incentive agreements would amount to a "giveaway" of money.
"I see this as money we haven't collected yet," he said. "This is new money ... so it's not money coming out of [taxpayer] pockets."
Referring specifically to hotel developer Joseph Toole's application for a tax break, Gibson said he had asked whether the project would survive without an agreement.
"He said, 'It makes it a lot bigger struggle without it,' " Gibson stated. "I think it's important that we consider all businesses, whether they would be here without the [tax break] or not."
He also asserted that Toole's hotel project may or may not move forward without a special tax agreement, but assuming it does, "look at what we're helping them achieve for the town by granting an agreement. We're enhancing their profitability in a way that helps them get their business up and running more quickly" while the town gains lodging and meals tax revenue.
Gibson acknowledged that "in a sense, these are subsidies, but they're subsidies with a purpose. I don't think that's a bad word. I think this is a really positive program to incentivize businesses to come to Lenox and to consider Lenox to be a 'business-friendly' place."
Selectman Warren Archey, predicting that the original tax incentive deal for Toole would have been "dead on arrival" at a town meeting, said he was "very impressed" with the proposed policy, although "we have a ways to go with the details, but this is a very rational approach."
Contact Clarence Fanto at 413-637-2551.