Public hearing held on adopting statute to allow Manchester TIF district

Aug. 1—City aldermen held a public hearing Tuesday on a request to adopt a state statute allowing the city to establish a tax increment financing district, which officials say could spur economic development.

No members of the public offered any comments, for or against the idea, during the hearing.

Jodie Nazaka, the city's economic development director, believes adopting RSA 162-K — the enabling statute that allows municipalities to adopt the authority and powers to establish tax increment financing (TIF) districts to support public improvement programs — holds "immense potential for Manchester's growth and development."

The exact location and boundary lines of any potential TIF district in the city has yet to be determined.

"We expect a TIF district to be brought before you fairly soon," said City Planner Jeff Belanger.

TIF districts invest new tax dollars to promote the goals of the district, including civic-use public facilities, utilities and transportation.

TIF districts can accept grants and issue bonds to pay the capital costs to improve public facilities, while establishing a financing plan for paying off bonds from increased property tax base resulting from those improvements.

With a TIF district, the improvements needed to stimulate tax base expansion are offset by that expansion at essentially no cost to the other taxpayers, supporters say.

Although TIF districts have existed since the late 1970s. New Hampshire officials revised the statute language in 2019 to be more accessible.

Written into law on Oct. 2, 2019, NH RSA 162-K is the enabling statute that allows municipalities to adopt the authority and powers to establish TIF districts to implement public improvement programs. The size and configuration of the district are determined by the type and nature of the economic development activity that the city or town wants to stimulate.

When a TIF district is established, the current assessed property values are set as a baseline. Any increase in the property values within that district resulting in increased taxes can be used entirely or partly to pay for the infrastructure improvements.

"We can allocate funds toward enhancing public infrastructure by capturing the incremental property tax revenue generated within the district," Nazaka wrote in a memo to aldermen. "This way, the projects can be considered self-financing."

Thirty-seven communities across the Granite State have used RSA 162-K to establish TIF districts.

Local examples include:

—Londonderry established a TIF district in an undeveloped area next to the Manchester-Boston Regional Airport. The public improvements, which included the realignment and improvement of Pettengill Road, supported industrial development, expansion and renovation in the area surrounding the airport along Pettengill Road. Londonderry notes on itsr TIF District Webpage that "Businesses want to locate in a town with a plan," a nod to the plan for industrial use land development along Pettengill Road.

—Concord currently has three TIF districts. Combined, they encompass approximately 137 acres of land. Since its inception, the city has made a combined investment of $36,740,337 in infrastructure improvements within these districts, of which $17,003,500 were TIF funds and $19,736,837 were supported by other funding sources. The investments have contributed to an estimated $98,293,788 in new assessed value generated by several real estate developments, officials said.

—Bedford established a TIF district in the area of South River Road between the Manchester border and Route 101. The public facilities improvements focused on upgrades to South River Road, allowing for additional land development and tax base within the district, with the new tax base covering the debt service on a bond for roadway improvements within the district.

—Derry established two separate districts: the Ash Street Corporate Park District in 2004 and the Route 28 and Manchester Road District in 2006. Once the original bond is paid off, new property tax revenue generated through the district improvements will go into the town's general fund.

TIF districts are regulated by certain guidelines under RSA 162-K, which dictate that any funds raised within a TIF district must only be used for the benefit of that particular district, and the governing body responsible for administering these funds must spend them per the official plan designated for the district.

Each TIF district must establish an Advisory Committee to oversee activities, offer suggestions, and make recommendations to the Board of Mayor and Aldermen.