Lenox officials weigh concerns on hotel developer's request for tax breaks


LENOX — The Selectboard has put the brakes on approval of a requested tax incentive for the Courtyard by Marriott hotel project under construction at Brushwood Farms amid opposition by some residents.

At their meeting last week, members decided to work on crafting a policy to create a level playing field for similar requests that may emerge from the lodging industry and, eventually, from other businesses, provided that applicants guarantee they'll create a specific number of new jobs.

Brushwood LLC/Toole Lodging Group is seeking a 10-year, $835,000 tax incentive package to ease the burden of startup costs for the $8.3 million, 92-room project.

Selectman David Roche, a strong advocate of the request, conceded that "a 10-year plan is way too long."

He urged the board to consider a 5-year package of incentives worth $300,000 to $400,000 in "property tax forgiveness" to the developer in exchange for what he estimated as close to $1 million in lodging taxes for the town over that time span.

During public comment, Planning Board member Kate McNulty Vaughan challenged the "public purpose" of developer Joseph Toole's request.

She suggested it could be "a subsidy given to an industry. I hope we don't open ourselves up to the slippery slope of every business who's actually coming here now deciding to come in and reach into the tax-revenue cookie jar, which is what this is."

If the Selectboard eventually approves a tax-break plan for Toole's hotel project, voters would have the final say on it at the annual town meeting on May 5. Two state agencies also must sign off on it.

Selectman Warren Archey voiced "concern about experimenting with this. We're going to find a lot of difficulty at town meeting, because we're asking other people to make up for the fact that some people are preferentially selected not to have to pay taxes that they would have had to pay under normal circumstances."

He acknowledged "very limited benefits" and declared that "as it stands now, I'm against it."

"I just want us to think through it a lot better," Archey added. "I've heard from a lot of people on this one, and I wrestle with it. I see pluses and minuses, but it's not something at this stage that we can bring to the taxpayers at town meeting and say this is a reasonable way of doing business."

But Roche emphasized the $2 million in rooms and meals taxes from the hospitality industry annually.

"That has allowed us to keep our tax rate increases low," he said. "It's what we're trying desperately to grow, the one area of our income stream that we control to a great extent. We can ignore it or we can encourage and nurture it, and that's something we have to look at because that's who we are."

He noted that town income has increased while expenses have remained level, thanks to the rooms and meals taxes. "We haven't had to cut back on any services and in many areas, we've enhanced them," Roche said.

He called for "encouraging intelligent growth" by becoming "a business-friendly town for businesses you want to attract."

Roche declared that the town needs to attract more hospitality-related business owners. "We've been successful at that and I'd like us to continue to be," he said, "but it's incumbent on us to do everything we can to ensure that the developers are also successful."

He suggested that a tax-incentive policy would give the town a business-friendly reputation but would have to be "policed" to make sure developers whose projects have been permitted by other boards deliver on the jobs promised.

Referring to Toole's hotel, it would "allow the developer breathing room during this buildout period so they can get their business off the ground and running without really attacking tax flow," Roche said. "I think that's the way we have to go, it's a reasonable proposal, and if it's properly explained to the voters of Lenox, they'll understand the logic behind it and that it makes sense."

Selectboard Chairman Edward Lane said "we're going to give up a certain amount of [tax] income we didn't really have anyway. My biggest fear is that we're rushing this along without a policy in place."

"A Pandora's box is what I think we're going to face here," he said, "because once we do a thing for this project, it's almost setting the tone for what we're going to do for anybody else who wants to come in. Is this what we want, for everyone who wants to build something to walk in the door and say, 'I want a tax break now.' "

"In talking to townsfolk, that's the fear of a lot of people," he added.

But Selectman Channing Gibson pointed out that a tax-deferment agreement "is not creating a hole in the budget. It is reducing income from that particular source. It doesn't come out of anybody else's pocket. It's a misconception that this somehow means the townspeople will be asked to fill that hole, and that's not the case. Your taxes aren't going to be affected by this at all."

Contact Clarence Fanto at 413-637-2551.

In their own words ...

Additional comments from the Feb. 24 Lenox Selectmen's meeting on a potential tax-incentive agreement for developer Joseph Toole's Courtyard by Marriott hotel project:

"No one's come up to me and said, 'Wow, what a great idea, let's do this.' I think it needs to be explained. We should design it so that it works for us. The time has come for us to be more business-friendly and try to get through the perception that 'Lenox is a difficult town to open a business in.' I don't want it to be a cookie jar that you can dig as deep into as you want. It has to be designed and it has to make sense. In theory, I think it's a great idea."

— Selectman Kenneth Fowler

"I'd hate to go to town meeting with something we're not prepared for, I hate to set some kind of policy in place that we're not prepared to follow up on, where it's going to bite us down the road. We have to make sure we get it right the first time."

— Selectboard Chairman Edward Lane

"You are asking the citizens of our town to subsidize a developer to the tune of $835,000 which the citizens of our town will have to pay, to make up this shortfall. In addition to creating a dangerous precedent for future development, you are cheating our citizens out of the hard earned money they use to pay their taxes. This is not a wise nor good course of action."

— Letter to Selectboard from Frank Newton, condo developer and innkeeper

"Contrary to misconceptions within the community that this will cost taxpayers money, the agreement would not come out of 'free cash' or surplus. We'll have some lost income from real estate taxes but we'll more than double the gain in rooms and meals taxes."

— Selectman David Roche


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