Developers promising tax revenue: no sure win over NIMBYs in hard times

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By Bryan Mills
New England Divisional Manager, The Saint Consulting Group

town-meeting1A bad economy gives communities more incentive to approve commercial development projects (for the tax rolls). Right? Diversifying the local tax base, so goes the argument, shifts the burden from homeowners to business — a win-win for local politicians and residents. Right? Most developers cite the estimated tax revenue they’ll bring to a town at the start of their presentation. It’s good politics and maybe an even better hook these days in an economic downturn.

Not so fast. While pro-development folks push tax benefits more forcefully during the current crisis, the promise of much-needed tax revenue can’t always trump citizen opposition to projects. The argument remains a good one for developers but is no guarantee of fast-tracking a local zone change or permit process.

The Lawrence, Mass. Eagle Tribune recently reported how southern New Hampshire towns highlight this phenomenon. At town meetings throughout New England, town warrants are full of articles that deal with town ordinances and other municipal legislation, including zoning changes.

No vote, no zoning change. In these NH towns (that could be “Anywhere, USA” for the purposes of our discussion here), proponents have strengthened their rhetoric about the need for more tax revenue – “new development is needed more than ever!” – in the face of the economic challenges towns and their residents are dealing with.

But opponents are standing firm – and doing so with decidedly “un-NIMBY-like” sophistication. Among others, citizens are pushing back and saying 1) Because of the recession and credit crunch, any tax benefits are a long way off in the future; 2) Commercial developments actually cost more than they bring in (from a municipal impact standpoint – wear and tear on roads/repairs, police and fire services, etc.) so our town is in no position to take on more of a burden; and 3) We are not going to let you (developer) slip by a use we didn’t like before because we are feeling beaten down by the economy.

It is a good strategy for a developer. We at Saint see it with well-financed developers who are waiting for the right time to bring a project forward; and in the right situations, we are advocating this approach) but beware the proponent who sees it as the panacea for land use controversy.

The Saint Index 2009 indicates that 59% of people surveyed would be more inclined to support commercial development if it meant more tax benefits for their town. This is a good sign for developers, but it still doesn’t come close to beating back the other, bedrock statistic from the Index: 74% of all people surveyed don’t want any new development in their town.

In the end, voting one’s pocketbook may be put aside to preserve the character of one’s community.

Bryan Mills is New England Division Manager for The Saint Consulting Group, email mills@tscg.biz, phone 781 749 7290, ext 7142

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