Hartford Business Journal

16 Hartford Business Journal • July 22, 2019 • www.HartfordBusiness.com SPECIAL REPORT: CITIES PROJECT By Greg Bordonaro, Gregory Seay and Matt Pilon gbordonaro@hartfordbusiness.com; gseay@hartfordbusiness.com; mpilon@hartfordbusiness.com A number of Connecticut municipalities use tax breaks or incentives to stimulate growth. But for some, par- ticularly cities like Hartford and New Haven with high tax rates, they can be the literal lifeblood of much of the eco- nomic development that occurs within their borders. Even towns with lower property-tax rates like Windsor resort to tax-fixing agreements, seeking a competitive edge in attracting investment. Deals can give developers/owners a temporary or even permanent lower property-tax rate. Just as important, they offer investors/busi- nesses certainty that their tax bills won't double or triple from one year to the next. "Tax abatements are part of the eco- nomic-development toolkit," said Erik Johnson, the director of development services for the city of Hartford and a former New Haven housing official. "We try to make sure that when we are look- ing at doing an abatement it's tied to the reality of not having that new develop- ment happen at all. We are in a position as a city that the status quo is not an op- tion. In order to promote growth we are going to have to take some smart risks and make some smart concessions." Interestingly, cities and towns each have developed their own strategies and tools for offering tax breaks, but parameters exist. State law limits municipalities to offering three kinds of optional tax breaks — exemptions, abatements and fixed assessments — but many types of properties and/or develop- ments may qualify for relief, includ- ing affordable-housing projects, food manufacturing plants, day cares, amusement parks, urban and indus- trial reinvestment sites and historical agricultural structures, to name a few. Tax breaks also exist for personal property, like machinery and equipment. It's not clear how many cities or towns use tax deals because it's not tracked by the state or any other organization. Courtney Hendricson, a former eco- nomic-development official for the towns of Farmington and Enfield, who is now a vice president of municipal services at the Connecticut Economic Resource Center, said she doesn't think their use is widespread, but communities that do leverage tax deals are seeking a competi- tive advantage over neighboring towns. "Towns and cities feel that a tax abate- ment can give them a leg up on a big de- Helping Hand Some cities and towns see tax-break deals as key to economic growth Capital Region Development Authority Executive Director Mike Freimuth has been the architect of some of the most important development deals in Hartford over the last few years. Many deals have involved CRDA equity investments and/or loans as well as special tax breaks. PHOTO | HBJ FILE

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