Haines Borough Assembly members expressed support to approve Roger Schnabel’s Highland Estate’s request for a 10-year property tax exemption for its Hilltop subdivision project in its first public hearing.
The assembly earlier this year voted to allow temporary tax exemptions for improvements made for economic development purposes to address Haines’ apparent housing shortage. The policy was recommended by the borough’s Housing Working Group that was established to find solutions to the shortage.
The exemption for the Hilltop subdivision provoked some opposition from the public. Thom Ely said the exemption would “help a wealthy real estate developer with an interest in the construction company that is developing the parcel, realize a larger profit on its land development at the expense of the public purse.”
Assembly member Paul Rogers argued that incentivizing the development would help the borough in the long-run by increasing property tax revenue and adding housing options to town.
“While some may argue that (Schnabel’s) going to benefit from a tax abatement, the fact of the matter is we need housing. We need it desperately,” Rogers said. “Once it sells you have a tax base. Those benefits outweigh any costs we see as not paying additional taxes so I support it.”
Assembly members Cheryl Stickler and Debra Schnabel also expressed support.
The borough has not had a subdivision developed by a private developer since 2008, according to a memo by borough manager Annette Kreitzer.
The memo states that Schnabel pays $3,325 in property taxes annually for the parcels being subdivided. The exemption means his company won’t be taxed on the value after the improvements are made. Future purchasers of the lots would be taxed on the value of the land.
“If the developer has not sold all of the lots within the timeframe of the exemption, he will be assessed the full value for those remaining lots,” Kreitzer wrote. “The exemption terminates for the developer with the sale of each lot. The Borough stands to gain more in property taxes in the future with development happening now.”