The Haines Borough Assembly is returning to the idea of establishing a property tax waiver program to spur local economic development.
The assembly voted in 2014 to establish an economic incentive program after it rejected specific property tax waivers for the Haines Brewing Company’s purchase of roughly 20,000 square feet of Main Street property.
The idea was the program would apply broadly and relieve the borough of negotiating incentives with businesses on an individual basis.
The assembly assured the brewery it would be pre-approved for the program, though development of the initiative has been stagnant.
Members of the borough’s Commerce Committee discussed the issue Monday, debating elements of a policy drafted by Chamber of Commerce executive director Debra Schnabel.
Schnabel used another community’s program as a framework before injecting localized specifics for the “property tax phase-in policy.”
The draft policy outlines the type of businesses that would qualify, the rate at which they would receive waivers, where they would have to locate to receive additional waivers, and how much investment would trigger the incentive.
The draft policy would apply only to manufacturing, processing, advanced technology and tourism/entertainment businesses. Coffee shops, retail businesses, grocery stores and gas stations wouldn’t be eligible.
Under the draft, exemption from property taxes would be assessed based on the size of the business’s investment in construction, renovation and equipment with a starting point of $100,000. Investments of $100,000-$299,999 could quality for up to a two-year waiver, $300,000 to $1 million for up to a three-year waiver, and more than $1 million for a five-year waiver.
Incentives would shrink over time, giving businesses the biggest tax waivers during their infancy.
“We’re talking about incentivizing investment that builds jobs for the community and builds a tax base in time,” Schnabel said.
The draft plan includes additional incentives for locating downtown (10 percent), peripheral downtown (5 percent), Fort Seward (10 percent) and the Lutak Dock industrial zone (5 percent).
Commerce committee member George Campbell questioned giving additional incentives for specific locations. “If they put (a business) at 26 Mile, if they put it at 22 Mile, if they put it at the border, if it’s jobs, it’s jobs,” he said.
Schnabel, who supports rewarding those who relocate to the downtown core, bristled at Campbell’s remarks. “Most communities and a lot of literature that is being written these days about community growth and development recognize the importance and the vitality of having a core business area. It’s important to have people exchanging, meeting, greeting. That’s what you do when you revitalize a community: you bring people together.”
“I daresay that if we had more people rubbing elbows with each other they probably would get along a lot better,” she added.
The draft also includes a competition clause, meaning eligible businesses must prove the market for their product or service is big enough to support the applying and existing business.
“Essentially, that’s requiring a competitive business to prove that the market will bear their entry,” Schnabel said.
Haines Brewing Company co-owner Jeanne Kitayama disagreed with the competition clause. “Competition should weed itself out,” Kitayama said. “It seems odd that somebody has to demonstrate that the market is large enough for another brewery, or another something.”
Commerce committee member Margaret Friedenauer seemed leery of the draft. “As far as this plan, I’m still hesitant and I know we’re just talking about this. I’m trying to understand the benefits to the borough.”
Friedenauer suggested the borough could look at incentivizing based on the kind of energy used at the facility, or if the business operates year-round.
The commerce committee will meet at 5 p.m. Wednesday, Jan. 27 to address more details.