Tax breaks for first-floor retail? Finance board debates, differs
Tax breaks for landlords — is that the way to encourage first-floor retail shops in the village?
The Board of Finance has mixed feelings.
“I’m in favor of tax abatements,” said board member Marty Heiser. “We want to be a business-friendly town.”
“I don’t like my tax dollars subsiding landlords,” Finance Board Chairman Dave Ulmer said. “I don’t like subsidizing businesses.”
Tax incentives are the heart of a proposal to encourage first floor retail in the village, which the Economic and Community Development Commission has put before the Board of Selectmen. The commission proposed tax breaks on commercial space rented to new or expanding retail tenants, and also reductions in the “personal property tax” on business equipment, if it is part of a new or enlarged retail operation.
The selectmen deferred a vote on the proposal, asking Assessor Al Garzi for an analysis of how much the tax incentives might cost the town’s remaining taxpayers — who’d have to make up the difference.
The selectmen will wait until they hear back from Garzi on the potential tax cost before taking any action. According to First Selectman Rudy Marconi, the question of statutory authority for such a program also needs research. He expects the proposal may be on the selectmen’s Sept. 27 agenda. A tax incentive program would like need to be approved by voters at a town meeting.
The finance board discussed the proposal last week, at the end of its meeting Tuesday, Aug. 29.
Chairman Ulmer brought it up, wondering if the board felt it should take a position on the proposal. In the end there was no motion, and no vote.
But finance board members did share some thoughts.
Board member Michael Raduazzo said he and his wife had started a business a while back, and sought to open it in Ridgefield, but found the rents prohibitive. No one seemed interested in reducing rents to attract a new tenant or encourage a new business.
“The landlords just don’t care,” Raduazzo said.
The couple ended up opening the business in Norwalk, he said.
Many landlords have paid off the mortgages on their properties, Raduazzo said, and could afford to wait for tenants who can pay high rents.
“You see turnover. It’s because these businesses can’t pay the inordinate rents,” Raduazzo said.
“I’d rather see businesses on Main Street not boarded up,” he said.
Board member Sean Connelly had a similar perspective.
“My wife had a business in town,” he said. “The rents are tough. I don’t know how anybody makes money in retail with what the rents are.”
Connelly felt the high rents discourage entrepreneurs.
“I know a ton of people who’d say: ‘I’d love to start a business,’” he said.
He agreed it would make sense for the town to encourage and support local businesses, who in turn support so much of what goes on in town.
“When you look at all the sports teams, who does that?” he said.
Heiser was supportive of the plan, comparing it to the tax abatements the town offered to Boehringer Ingelheim some years ago to encourage the company to say in town and expand here.
“In my mind, it’s exactly the same principle,” he said.
Heiser was also uneasy about opposing a program the volunteers on the economic development commission had put a lot of work into developing.
“This is their one big proposals,” he said. “If we just kind of squash it…”
Ulmer, however, had doubts.
He thought the incentive package — in addition to tax breaks, there are things like free memberships at the town golf course, and recreation center — made less sense than the alternative it seems designed to avoid: a planning and zoning regulation that limits first-floor commercial space in the village to be rented, when it becomes vacant, only to tenants that qualify as retail.
“I think an economist would tell you: If you want to do it, don’t incentivize, just do it,” Ulmer said, “and the market will adjust.”