The need for a property tax exemption policy came up when owners of the Haines Brewery were negotiating to buy borough land. (Emily Files)
Haines borough assembly members and the Chamber of Commerce are working on a property tax incentive policy. The hope is that it would encourage business and job growth by giving tax breaks to certain businesses in areas of Haines in need of economic development.
The tax incentive discussion started in 2014, when the Haines Brewing Company was negotiating with the borough to purchase land for its new location. The assembly decided at the time that there needed to be a policy in place. That way the borough wouldn’t be deciding on a case by case basis which businesses qualify for property tax breaks.
In September, the new brewery on Main Street opened. But the borough still did not have a property tax exemption policy.
Debra Schnabel was on the assembly when the goal of policy came up, now she’s the Chamber of Commerce director.
“I think that, generally speaking, the assembly provided that your situation was somewhat unique in that you activated this policy,” Schnabel told brewery owners Paul Wheeler and Jeanne Kitayama at Tuesday’s meeting. “And we’re the ones at fault for taking this long to develop the policy.”
Schnabel is working with the assembly’s commerce committee to rectify that by creating an official policy. It’s still going through changes, and the final rules will be up to the assembly.
Here are the broad strokes of where it stands now: businesses that are building on vacant land or renovating a deteriorating property could qualify. Construction or renovation totaling at least $100,000 would qualify. The exemptions follow a regressive three-year schedule. The first year, businesses get a 50 percent property tax break, the second year, 30 percent, the third year, 20 percent.
Those details could change as the policy works its way through the committee and assembly. It also needs to conform to state statute.
Schnabel asked the committee whether they thought $100,000 is too low a bar to qualify for the exemption.
“I mean $100,000 at 10 mills is like $1,000 so you’re only talking about giving somebody a $500 waiver, big whoop-de-do, that’s hardly enough to incentivize anything,” she said.
Committee member Margaret Friedenauer said maybe the exemption wouldn’t incentivize that kind of investment, but it wouldn’t hurt to keep the qualification at $100,000.
“I see what you’re saying, like who’s going to use that as an incentive. Well maybe they won’t, but at least it’s an $100,000 investment towards something and if they don’t want it they don’t have to take it,” Friedenauer said. “But the bigger investment you get the bigger tax break you get anyway, and we’re covering all our bases and treating everyone equal.”
There was also some debate about the geographical areas that should get an additional tax break. Downtown Haines is one of them, but committee member George Campbell thought the boundaries should be as wide as possible when defining ‘downtown.’ Here he is, with Schnabel responding.
“Having this arbitrary line in our business district, one of our auto parts [businesses], our fuel station and stuff are 100 yards outside of [the downtown boundary], do we want to see that area developed?” Campbell asked.
“No,” Schnabel responded. “Because creating commercial districts is one of the purposes of this ordinance. Creating a long line of commercial properties along a highway is not creating a downtown commercial district.”
Friedenauer referred to something she says Chamber board president Kyle Gray said at a previous meeting.
“The purpose of policy like this is to change behavior,” Friedenauer. “To change behavior to revitalize, develop a specific area. If your goal is to just create jobs in the borough, this isn’t how to go about it. We have to look very closely at what is the purpose of offering a tax exemption program like this.”
The committee will continue to look closely at the policy at a meeting next Tuesday at 4 p.m.
