Tax Incentives
Articles 13 and 14
What they are –
- They encourage business to locate in Canaan and to renovate property.
- They allow the Town to develop community improvements that are paid for by the owners that use them.
- These programs rely on private people to renovate buildings and build new businesses.
What they are not -
- These programs are not zoning and there are no regulations that tell an owner what he has to do. There is nothing that prevents the sale of the property. There is no use of eminent domain.
- These programs do not reduce the taxes currently raised on the property.
- These programs do not use current taxes to pay for the new improvements, if any.
Article 13
Encourages Renovation or Replacement
This allows the Selectmen to freeze appraised values for a period of 2 to 5 years IF a owner commits to replacing or renovating a critical building in the Village core within a year of approving the freeze.
The buildings must be functionally, culturally, historically or economically significant to the Town as determined by the Selectmen.
They must be within the area mapped.
The areas include all properties that abut or directly access the following streets:
Route 4 from Follansbee to the bridge by Williams Field.
Route 118 from Route 4 to Papa Z’s.
Canaan Street from Route 4 to the Hammond property (not beyond 66 Canaan Street).
All of High Street.
All of School Street.
All of Depot Street.
Article 13 --- EXAMPLE ONLY – NOT A REAL APPLICATION
Old Freight House at the end of Deport Street
Current
Assessed Valuation of Freight House
Land .26 Acres $27,000
Freight House $ 5,610
Total Card Value $32,600 (it’s rounded)
Current Tax 32.6 x $30.27 = $986.80 Current Tax
Owner proposes:
Invest $150,000 to restore the building.
If that was complete, the Assessed Valuation might go to a total of $170,000.
The tax after those changes would be a $5,145.90 tax.
With Article 13, the Board could freeze the assessment at $32,600 for a period of 2 to 5 years. This would allow the owner to get a business underway without a higher tax burden. The Town does not loose taxes. It just doesn’t get the higher taxes until the period expires. The project is reviewed annually.
Article 14
PAYS FOR NEW PUBLIC IMPROVEMENTS
This article encourages economic development by allowing the Town to make public improvements in a very specific area and then take part of the new tax revenue that comes about because of a higher value due to the improvements and uses that new revenue to pay for the cost of the improvements and the operational cost or maintenance.
Each area where this will occur must have a separate plan and budget and the plan and budget must be approved by the voters.
There are only three areas currently contemplated:
- A light industrial park on Village water.
- The central core of the Village – Route 4 from intersection of School Street to Canaan House of Pizza, Route 118 to Papa Z’s and Depot Street
- A light industrial park on Route 118 with on site water and sewer.
This program allows for the development of public services and improvements like street lights, sidewalks, water, sewer and parking.
The Select Board plans on splitting higher tax revenue between the improvements and additional revenue to support the Town, School, State and County.
The development does not reduce existing tax assessments nor use general fund tax dollars.
Article 14 - - - EXAMPLE ONLY – NOT A REAL APPLICATION
Owner has a business on the far end of Depot Street and wants an additional street light for his/her evening business. The cost is $6,000. Once the business is open and profitable, the assessed valuation increases by $50,000. The old valuation was $150,000. The new valuation is $200,000. Old taxes were $4,540. New taxes are $6,054. The difference is $1,514. Half of that ($757) goes to pay for the street light’s cost. The payback is 8 years. The revenue to the Town and School goes up $757 a year when the value goes up.
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