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Letter sent to Mayor Lathrop, City Council members and City Council candidates
October 7, 2007
On Friday,
October 5, 2007, developers submitted an application for a stated $9 million retail complex of 20,000 sq.ft, on approximately
3 acres, in a residential zone on upper Washington Street. There were suggestions that it would provide some $175,000.00
in tax relief to our taxpayers… figures which beg to be substantiated. It should be noted, by way of comparisons, that
the Wal-Mart/Big Y complex on Salem Turnpike, consists of 195,288 sq.ft. of retail, on 29.98 acres. This complex
is 10 times as large, has a market value appraisal of $10,226,000.00 and delivers $207,000.00 in real estate taxes
and $69,000.00 in personal property taxes for a total benefit of some $275,000.00 in tax relief. This, by itself, should
raise some questions as to whether or not the applicant’s proposal with $175,000.00 in tax benefits may be overstated.
The following pages contain a comparative analysis of tax returns for the three kinds
of businesses mentioned in their proposal, and were obtained as public records in two separate assessor’s offices. As
they have been compiled over the last few weeks and prior to the recent application, some assumptions were based on a 25,000
sq.ft. complex. Consequently, the gross benefit projected may be overly generous.
Some council members have expressed concern, that an investor, if denied, might turn
this area over to non-profits, or clinics that provide no taxes. Estimated option values, based on public record information,
optioned property owner accounts and rumors, we might assume that the investor would risk some $3 million dollars in land
purchases alone. It should not be unreasonable to assume that an additional $3-6 million would be needed to develop the land
and add additional new construction. This should appear to be a huge risk for an investor or for rumored non-profits that
have yet to be identified.
Based on these assumptions, it could appear unlikely that an investor or non-profit
could justify this exorbitant expenditure. But even if it were to occur with the entire property, our city would lose just
$29,740.00 in taxes, on the seven mentioned properties. The more likely reality would be for the developer to purchase only
one or two of the optioned properties, if any, to recoup their small investment to date. Based on the information provided,
the following pages suggest a $33,000.00 net tax benefit for an approved retail complex.
Four possibilities exist:
- The application is denied, and the area remains the residential zone expected by ordinance
and the majority of homeowners affected;
- The application is approved, with a projected tax benefit of $33,000.00;
- The investor finds suitable, non-profits and the city loses, $29,740.00 in taxes;
- And finally, the investor decides to let his options lapse as non-performing, unacceptable
risk.
Tax payers should not be expected to fund the risks taken by investors, nor be
accountable to them.
The following data was collected in an attempt to provide additional information to
aid in your deliberations on this matter of great controversy. The challenge therefore, is for you to consider these factors,
analyze the following data, assess credibility, and to gauge the relevant impact of the information provided. As the
Zoning Authority, you hold the ultimate decision as to whether or not it is in the best interest of our citizens to add additional
chaos to an already congested area adjacent to our community hospital by adding retailers offering duplicative products readily
available in the immediate vicinity.
On behalf of the Norwich Neighborhoods Coalition, I ask that you not destroy one
of the most architecturally and historically significant gateways to our beautiful city -- together with the investments,
quality of life, trust, and aspirations of dozens of hard working and law abiding tax payers.
Most sincerely,
The
Norwich Neighborhoods Coalition
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