LONDONDERRY — Town Manager Kevin Smith said the tax increment financing (TIF) district for the area that includes the new F.W. Webb and EFI buildings has been closed out because the town made its last payment reimbursing for infrastructure projects in July and finished collecting taxes to pay for it this month.
As a result, Smith said $67 million will be added for next year’s property valuation. He said that will go toward the overall tax rate to reduce the burden on residents.
“We’re reaping what we sowed, in a good way,” Smith said.
TIF districts are a common way municipalities subsidize public infrastructure projects related to major developments, by delaying property value increases and diverting new revenue from the district to pay off the subsidies.
The agreement included no up-front costs paid by the town, and they had a few years to reimburse companies for public infrastructure projects.
About $1.25 million was reimbursed to the developers who paid up front for those projects.
This is the second TIF district to close in the Pettengill Road area. The first one included the UPS Pratt Whitney facility.
Smith said there’s potential for doing more TIF districts like these in the future, as long as the development agreements follow the same guidelines.
Londonderry Town Assessor Rick Brideau said the district worked very well.
“It’s a faster way to get things done, in my opinion,” Brideau said.
He said EFI isn’t taxed on the land, which is owned by the city of Manchester, but it’s taxed on the building.
“It’s really a win win for the community and the developer,” town Finance Director Doug Smith said.
He said $1 million was reimbursed to F.W. Webb’s developers and $250,000 was reimbursed to the EFI developers.
The property on Pettengill Road, which is adjacent to the Manchester-Boston Regional Airport, is prime real estate for large, high-bay facilities like distribution centers. F.W. Webb is a 1-million-square-foot facility.
Some of the increased valuation has already been realized for this fiscal year, so in the next year the total property valuation is expected to increase by $26 million.
Doug Smith said the TIF district agreement doesn’t technically close until the end of the fiscal year in June for accounting purposes, but as of this month, all activity on the TIF district has ended.
“For all intents and purposes, we’re kind of done with it,” he said.