By LISA CAPOBIANCO
The city of Bristol is looking into various incentives to attract downtown businesses.
Currently, the Bristol Development Authority is developing new tax abatement and grant opportunities for Centre Square development projects at Centre Square.
During a recent BDA Downtown Committee meeting, BDA Executive Director Justin Malley shared a draft of these incentives, which are now in the design phase.
Since Centre Square lies within the city’s Enterprise Zone, most commercial and residential construction projects qualify for a seven-year, graduated tax abatement.
Although the city already offers an Enterprise Zone Tax Abatement, Malley presented the concept behind a “preferred development tax abatement” that would assist special downtown projects under a 10-year schedule.
Among the projects that would qualify for the proposed tax abatement include arts and entertainment, privately-owned restaurants that serve dinner and projects that will create and/or relocate at least 20 full-time jobs.
Malley said this kind of tax abatement package could allow Bristol to recruit those special projects by offering an incentive.
“We’re in competition with a lot of different communities with a lot of different assets—we need to look at incentives to level the playing field sometimes,” said Malley. “We want to create a plan and take our time with it and develop the right incentives for downtown.”
Besides tax abatements, Malley also shared several kinds of development grants for restaurant build-outs, retail and/or service business and employment.
City Councilor Dave Preleski, who serves on the BDA Downtown Committee, said the idea is to take other existing businesses in Bristol that may need extra help to get to the next level or established businesses out of town that are looking for a new location.
“This is an easy concept to sell. We’re in competition with every town and city around us for the same dynamic—they’re looking for the same things we are,” said Preleski.
“You entice businesses that will give people a reason to come downtown,” said BDA Commissioner Mickey Goldwasser.
Malley said gathering feedback from local business owners will be the key for creating the best tax incentive and grant packages. BDA commissioners plan to gather feedback on the proposed tax abatement and grant opportunities from local business owners before they further refine the proposal later this month.
“BDA members were asked to go out into the world and ‘test drive’ the proposed incentives with business owners and others that they feel would help determine if the incentives are appropriate, actually attractive,” said Malley in a follow-up e-mail last Thursday.
During the meeting, Malley also introduced the concept of Tax Increment Financing—a tool that helps communities to fill a financing gap to achieve economic development. A local program that is guided by state law, TIF uses anticipated future increases in property tax revenues to create incremental tax revenues from a certain development project to help pay for current costs associated with development, as explained by Connecticut Main Street Center.
Among the kinds of projects that municipalities can use TIF revenues for include public infrastructure and façade improvements, remediation services and project development and redevelopment costs (including downtown district development). TIF revenues cannot be used for General Fund purposes.
“You can take the funds that are a direct result of development within that district and earmark them for projects within that district—but only within that area,” said Malley, noting that the program uses local money. “There’s still going to be new tax revenue from day one, so we’ll go from zero to 100, and we can earmark those funds—both the funds we’re actually receiving and also future funds.”
Committee members supported the idea, and made a motion authorizing Malley to further investigate TIF and bring it to the BDA board.
“It’s a great idea. We should be pursuing all opportunities,” said Goldwasser.
Under Connecticut Public Act No. 15-57, municipalities must first have a district master plan approved to create a TIF district. At least 90 days before approval, the Planning Commission then makes a written advisory opinion on the master plan at least 90 days before approval. The process also involves a public hearing before the plan is approved.
Among the communities that have established TIF districts are New Britain and Groton, noted Malley.
“It’s a very complicated concept, but I think we have a responsibility to investigate,” said Malley, who will discuss the program more in depth with other city staff.