On April 7, the Town of Hanover Selectboard held a public hearing to discuss the implementation of a new tax increment financing district on South Main and West Wheelock Streets to revitalize town infrastructure.
The TIF is intended to “fund a series of public infrastructure improvements that will support economic development,” including improving safety and accessibility infrastructure, as well as “the district’s livability and aesthetic appeal,” as stated by a proposal circulated by the town.
According to economics professor emeritus William Fischel, TIFs are a tool used by town governments to spur economic development by easing the financial burden to pay for expensive new infrastructure.
“They use the extra value created by the project to finance the project itself,” Fischel said. “Instead of having the entire city pay for the better roads, better sidewalks, improvements and so forth, it’s targeted at a particularly identified district.”
If the TIF district is created, 75% of any increase in property tax revenue from the baseline of April 1 will be available to pay off debt that may be taken out for improvements. The remainder “will continue to go into the [town’s] general fund and support all general fund related projects” such as public safety and other town services, according to Hanover town manager Robert Houseman.
The TIF district, if supported by Hanover residents in a vote on May 13, would create the financing vehicle for future improvements, which have yet to be planned out and would be subject to approval at next year’s town meeting. The current proposal contains possible infrastructure improvements on South Main and West Wheelock streets, including widening sidewalks, running utilities underground and upgrading sewer lines and water mains.
The town estimates the total cost of all proposed improvements to be $28,000,000, according to the proposal.
Houseman expressed a need for updated infrastructure in the town, pointing to an incident where five water line breaks occurred in a 38-hour period, which “forced [the town] to close every single restaurant on one side of the street for those two nights.”
“That’s an indication of deteriorating 110-year-old water lines,” he said. “The idea of a project like this is you don’t just make it look pretty, you invest in the infrastructure under the road and sidewalks to ensure that we have a 50 or 100 year project.”
There are potential downsides to a TIF district. Fischel noted that while the improvements will not directly cost taxpayers money, there is an opportunity cost: tax revenue to a town’s general fund will be “frozen,” meaning that revenues will not increase until the completion of the project, so “the rest of the jurisdiction doesn’t cash in right away.” If property values do not rise as anticipated, the taxpayers are “left out in the cold,” having lost tax revenue for little benefit.
However, the town has previous experience using TIFs. Town of Hanover director of assessing Norm Bernaiche highlighted a parking garage located on Lebanon Street as an example of a successful TIF, which is now “almost paid off.”
At the Monday hearing, residents expressed concerns with the timing of the project and potential impacts on school funding. During the portion of the hearing open to public comment, Dresden School Board chair Benjamin Keeney expressed his concern that a notice period required by New Hampshire law had not been followed.
Former Dresden School Board chair Kimberly Hartmann agreed that the current timeline for approving the TIF district was rushed, and urged the selectboard to consult with Hanover schools, who rely on property taxes to operate.
“This is an agreement that has been drafted solely by the town,” she said. “[The board asked,] what is the April 1 tax revenue, and we did not get an answer.”
Ryan Romano, who runs Hanover Haircutters, expressed his concerns over the proposed change from diagonal parking on South Main Street to parallel parking. A loss of 31 parking spots is listed as a potential “con” in the town’s proposal.
“Last year, I had multiple people come into my business and tell me that they would not be back because of lack of parking,” he said.
A public vote on the TIF will occur on May 13. If successful, the town will form a committee to study improvements and financing options. After that, a public vote will be held on the final plans before work can begin, according to Houseman.
“Ultimately the voters get to decide whether we use it or not,” Houseman said.
Correction Appended (April 9, 4:00 p.m.): A previous version of this article stated that Kimberly Hartmann is the Dresden School Board Chair and that Benjamin Keeney is the Hanover School Board Chair. The article has been updated to clarify that Hartmann is the former Dresden School Board Chair and Keeney is the current Dresden School Board Chair.
