LENOX — Town leaders are pushing the hot-potato issue of tax breaks for new or expanding businesses in town back to the front burner.
After shelving the thorny challenge last winter of crafting a tax-incentive policy that would pass muster with town voters, members of the Select Board began exploring a revised proposal at their meeting this week.
Land Use Director and Town Planner Gwen Miller, who wrote the draft, emphasized that a complete, predictable, transparent policy is needed to consider active or new proposals from companies seeking to locate new businesses in town, or existing firms planning to expand locally.
"It makes us all look good, friendly and supportive of existing businesses and new businesses if we can tell people, `This is how long it will take you' to come to the land use director, talk to the selectmen and go before the town meeting" in order to get a verdict on tax-incentive proposals, she said.
"We want to be able to give people predictable and clear timelines so they're not taking on additional risks or additional costs while we invent the wheel as we go along," Miller said, "so it's already set up for them."
"I would like to see the town adopt a policy in the near future so that the active applicants can seek closure on the process through the annual town meeting warrant in May and so that we are prepared in case we receive other local tax incentive applications," she told The Eagle.
Last March, the Select Board decided not to forward any applications to voters, pending preparation of a standard policy to create a level playing field.
The Toole Lodging Group had applied for a special tax agreement to save $835,000 in property taxes over 10 years for its 92-room, $8.3 million Courtyard by Marriott project under construction at Brushwood Farms.That application remains active.
Miller's revised draft proposal, which includes some changes suggested by the town's zoning and planning boards as well as the Board of Assessors, specifies that she would be the first point of contact in Town Hall for business owners.
"I will notify the Board of Assessors and Board of Selectmen within 14 days of receipt, and notify other boards and committees, and they would have 30 days to provide comments to the Board of Selectmen," Miller stated.
The Select Board would decide which applications for tax breaks would qualify for action by town meeting voters.
Miller stressed that special attention would go to existing businesses in Lenox seeking to expand.
Noting that a "good chunk" of the town's economy is based on the hospitality industry, she suggested that new businesses in other categories that would diversify the mix would get careful consideration. "We want to grow the pie and share the different things happening in town that support our economy," she told the Select Board. "A diverse economy is a resilient economy."
Another factor to be weighed by selectmen would be the quality rather than just the quantity of new jobs from a new or expanded current business, Miller pointed out.
"Are they paying livable wages, salaries that would enable an employee to live in Lenox?" she asked. "We want to incentivize those kinds of businesses to come to Lenox." Jobs paying $50,000 or more a year would give an applicant extra credit.
Developers planning to locate in a building that has remained vacant for five years or more also would get extra points on the town's scorecard evaluating new applications, Miller said. She is also recommending that developers planning community, mixed-income and affordable housing as part of their projects would be looked on favorably.
Also addressing the Select Board on Wednesday night, Debra Boronski, a regional director for the state's Office of Business Development, applauded Miller for her "very impressive" draft proposal.
She offered members examples of how other communities handle economic development programs encouraging businesses to grow or relocate into the state. Tax incentive offers can make the difference when a developer chooses a town for its site, she said.
Companies that gain more than 25 percent of their sales from out-of-state customers can qualify for additional investment tax credits from the state as long as they have a local tax incentive program in place.
"This is a huge, huge incentive for businesses to relocate," Boronski said. The state tax credits can amount to hundreds of thousands of dollars for larger companies, she noted.
"Because of your location, the hotel industry qualifies," she said, since many guests come from out of state.
Boronski told the Selectmen that every local community controls its own tax incentive plan. "Your policy is yours, every city and town does it differently," she pointed out. "You decide what it is, and you should have a standard policy."
She also noted that if developers already have "shovels in the ground," they don't generally qualify for a tax incentive unless a town had delayed action on their application.
"This is an incentive, not an entitlement," Boronski said, "so the question you ask right up front is, would they be expanding" whether or not they qualify for a tax break.
"We are in an Economic Development Zone," Selectman Channing Gibson pointed out, "and it's our obligation to entertain applications" for tax incentive agreements.
About 10 years ago, the town signed on to the state's Economic Development Incentive Program designed to encourage job creation and stimulate business growth. State and local tax incentives can be granted in exchange for job creation, retaining existing jobs and making private investment commitments. The state program was revised in 2014, making it much easier for any town to participate and to grant local tax incentives.
In response to a query by Gibson about an applicant who has been awaiting a decision for more than a year but has gone forward with his project, Boronski said "you may offer the incentive if you feel there's a good reason to do so. It's entirely up to the Board of Selectmen to offer it" for a decision by voters at the town meeting.
After Toole requested a tax incentive for his Marriott project last year, the town also fielded an application from the Mahida Hospitality Group seeking a similar deal to benefit its approved project to demolish the Magnuson Hotel and replace it with the Lenox Manor 100-suite hotel and events center.
And Morrison Home Improvement is requesting a "Tax Increment Financing" agreement similar to that granted to the Allegrone office park site on Pittsfield Road approved by special town meeting voters in 2010.
The "TIF" program requires the property owner to pay current assessed taxes but slowly over time pay an escalating percentage of the increase between the previous value and the new value from the investment.
Reach correspondent Clarence Fanto at email@example.com or 413-637-2551.