Development May Be Fine, but No Subsidies
Writing in the Sakonnet Times, Tom Killin Dalglish previews a meeting between the Tiverton Town Council and Legacy Venture West Development on Monday (January 25) to discuss details of its interest in a large shopping center on the largely vacant Tiverton Industrial Park land owned by the town government:
The idea of an outlet center was first broached publicly at a council meeting in late November, when Legacy Venture West Development (Legacy Development) of Kansas City and the Town announced they had reached a “stand still” agreement on Nov. 23.
That agreement allows each side an exploratory period of 90 days to study the possibility — to do due diligence — without the risk of intervention by other potential purchasers.
If the whole deal goes through, Legacy and the Town of Tiverton have agreed to a purchase price for the acreage of $8.25 million.
Likely at the top of the list to be discussed by the Council and Legacy at the upcoming Jan. 25 meeting will be the level of public financing that Tiverton and the State of Rhode Island might be prepared to offer, and that Legacy might seek.
The first question that the town will have to answer is whether the proposed Tiverton Glen development on the other side of Route 24 ultimately met such opposition because Tiverton residents want to use town government to stop all large-scale development or because the specific location presented unusual problems, particularly traffic on Main Road. Additional subsidies that the developer might seek from town and/or state taxpayers will complicate matters.
To the extent that such subsidies come from local taxpayers, opposition should be especially high. Dalglish mentions tax exemptions and tax increment financing, both of which raise concerns. Any tax exemptions would simply negate the benefit to local taxpayers of having large-scale development in the town, at a time of high public debt payments and an unusually high tax rate.
Tax increment financing can potentially have worse effects. In general, such deals estimate the amount of additional tax revenue a development will produce and then leverage that estimate to borrow money. Not only do other taxpayers typically not receive the benefit of the increased revenue, but they can also find themselves on the hook for the debt if the estimates are overly optimistic.
Even Tiverton residents who disagree with the notion that it is appropriate for government to be highly restrictive about how property is developed in the town might question the wisdom of paying developers to come to town and change its character.