Can Businesses At Fairfield Hills

Generate Tax Revenue?

To the Editor:

The selectmen have carefully reduced the Fairfield Hills operating budget for 2005-2006 to about $550,000. How much could new businesses at FFH contribute in tax revenue?

Newtown and Woodbury halls combined are reported by HMA to offer about 50,000 square feet of office space for lease. The town will own the two FFH buildings and will not pay real property tax to itself, but could receive some lease payments from a developer once tax incentive rebates are deducted. By comparison, Eton Square — the old Grand Union complex — contains about 47,000 square feet and pays $57,310 in real and personal property tax. Clearly, Newtown and Woodbury, the two most desirable buildings, are not going to generate large sums of tax revenue.

Can tax relief be achieved from businesses located in a Commerce Park expansion? The assessor’s office recently reported the net assessment for the top ten taxpayers in Newtown. Using the 2004 Grand List, multiply this taxable valuation by the current mill rate 24.9 (.0249) to find the taxes each will pay if the mill rate remains 24.9.

Connecticut Light and Power, $484,347; Sand Hill Plaza, $358,171; Barnabus Realty, $307,549; Homesteads, $295,065; Hubbell, $233,549; Newtown Shopping, $204,557; Agbar Properties, $163,354; Kendro, $152,260; The Taunton Press, $146,485; Rock Ridge Country Club; $129,541.

Adding all ten, the total tax income is $2,474,878. Currently, a tax of 1 mill in Newtown raises $2,778,000. Thus, $2,474,878 is 0.89 or 89 percent of 1 mill. This data illustrates how difficult it is to achieve meaningful tax relief from new businesses. “Newtown could pave over Fairfield Hills and fill the landscape with office buildings and parking lots and still earn itself less than a mill in revenue.” (Newtown Bee editorial in March 2003) Explained another way, it would take eight Sand Hill Plazas to raise one mill. Two Sand Hill Plaza might provide $550,000. Is such extensive development desirable at FFH?

A far less expensive area to develop for commercial interests is the 38-acre commercially zoned parcel in Commerce Park which the state has given to Newtown for commercial development. Lots can be sold and buildings designed and erected as the buyers wish. We need to pursue its development aggressively.

Attracting new businesses to town is a difficult task even though the town offers attractive tax incentives. Some reasons are: a low unemployment rate — about two percent, creating a shortage of workers. If recruited and moved into town, these employees require community and school services. Traffic congestion, appropriate housing, shortage of classroom space all impact the desirability of a community for new businesses.

The key question is, “Who will make the money?” If the town can’t make substantial sums of money from commercial interests at FFH, who will?

The land at Fairfield Hills is most valuable for immediate and long-term municipal needs. Commercial development there is will not contribute very much tax revenue and will certainly prevent or restrict the enjoyment citizens could enjoy from this beautiful property.

Ruby Johnson

16 Chestnut Hill Road, Sandy Hook                            March 1, 2005