Adopted June 25, 2003
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Main Page | Housing Preservation Loan Program | Montpelier Business Loan Fund | Tax Stabilization Policy |
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Tax Stabilization Policy page links Granting of Tax Stabilization | Conditions | Compliance | Municipal Taxes Only | Findings of Fact | Benefit Levels | Criteria For Level One | Criteria For Level Two | Criteria For Level Three | Criteria For Level Four | Recapture | Transfer | Definitions | Contacts |
Purpose: The City Council, as authorized by Title 24, Chapter 75 Section 2741 of the Vermont Statues and by votes of the City in 1980 and 2001, may enter into a tax stabilization contract with the owner(s) of industrial or commercial properties in order to promote growth and development that advances the city's goals and priorities, which include creating job opportunities, expanding the Montpelier Grand List, promoting housing and enhancing public safety.
- Granting of Tax Stabilization: The granting of tax stabilization
is the sole discretion of the City Council. The City Council may enter into
tax stabilization contracts with owners of industrial and commercial real
property to discount the property's value on the Montpelier Grand List by
one-third (1/3) to one-half (1/2) for new industrial and commercial real property
or for additions and renovations to existing industrial or commercial real
property.
- Conditions: Tax stabilization contracts are available for industrial and commercial projects subject to the following conditions:
- Compliance:
- Municipal Taxes Only: Tax stabilization awards shall be made consistent with the provisions of 24 VSA Chapter 75 Section 2741 and shall be only for the municipal portion of property taxes. Applicants who seek tax stabilization for education property taxes must do so through the Vermont Economic Progress Council.
- Findings of Fact: Before approving a tax stabilization contract, the City Council shall make specific findings of fact on which to base the general findings that the project meets each of the required eligibility criteria set forth in this policy.
- Benefit Levels: Tax Stabilization awards shall fall within four benefit levels.
- 1. A reduction in property value of one-third (1/3) for four (4) years.
- 2. A reduction in property value of one-half (1/2) for three (3) years.
- 3. A reduction in property value of one-third (1/3) for five (5) years.
- 4. A reduction in property value of one-half (1/2) for four (4) years.
- 5. A reduction in property value of one-third (1/3) for six (6) years.
- 6. A reduction in property value of one-third (1/3) for seven (7) years.
- 7. A reduction in property value of one-half (1/2) for five (5) years.
- 8. A reduction in property value of one-third (1/3) for eight (8) years.
- 9. A reduction in property value of one-half (1/2) for six (6) years.
- 10. A reduction in property value of one-third (1/3) for nine (9) years.
- 11. A reduction in property value of one-third (1/3) for ten (10) years.
- 12. A reduction in property value of one-half (1/2) for seven (7) years.
- 13. A reduction in property value of one-half (1/2) for eight (8) years.
- 14. A reduction in property value of one-half (1/2) for nine (9) years.
- 15. A reduction in property value of one-half (1/2) for ten (10) years.
- Criteria for Level One: To be considered for Level One Benefits of tax stabilization, the project must meet ALL of the following criteria:
- a. At the beginning of the contract term the real property additions and/or
renovations will
i) be assessed at $250,000 or more; or
ii) be assessed at $50,000 or more for businesses with 25 or fewer full-time employees or with $2 million or less in annual gross sales. - b. The development is consistent with the City of Montpelier Master Plan in effect at the time the application is made and that the project has received Development Review Board approval (if required) and all other necessary permits not including the building permit.
- c. No part of the completed project, which shall include the entire value of the real property and any improvements thereon, will be exempt from City taxes during the term of the contract and thereafter for a period equal to the contract term, other than property value discount granted under the tax stabilization contract.
- d. The real property additions and/or renovations to receive tax stabilization must include commercial and/or residential sprinklers approved by the Montpelier Fire Chief and the Vermont Department of Labor and Industry (if applicable).
- e. The project will not result in a net decrease in the number of residential units within the designated downtown. However, this standard may be waived by the City Council if the Council makes an affirmative finding that the project results in exceptional public benefits which outweigh the public need for the housing units being removed or the Council affirmatively finds that the applicant has provided for comparable housing units elsewhere within the city.
- f. The project can demonstrate to the satisfaction of the City Council that, but for tax stabilization, it would not choose to locate or expand in Montpelier.
- g. The project can demonstrate to the satisfaction of the City Council that, net of tax stabilization and all foreseeable tax impacts, it will provide a positive property tax benefit to the City.
- Criteria for Level Two: To be considered for Level Two benefits, the project must the requirements of paragraph 7 above and at least ONE of the following criteria:
- a. The project can demonstrate to the satisfaction of the City Council that the project will positively affect in a significant way the number of employment opportunities in Montpelier.
- b. The property owner(s) will deed to the City certain rights in real property which could otherwise be acquired only by outright purchase or eminent domain to promote the achievement of a specific policy or objective set out in the City Master Plan, including easements for riverfront walkways and parks, pocket parks, recreations trails and conservation easements that protect or create the following: key natural features, open space, greenways, specimen trees, etc. This provision shall apply only to acquisitions for which there is no reasonable or practicable alternative.
- c. The project will meet certain exceptional, enhanced aesthetic standards not otherwise required by law or the City Master Plan, such as replacement of existing above-ground power lines, preservation or creation of public views and vistas, maintaining or enhancing the historic authenticity of an existing building or unusual landscaping effects.
- d. The project will include a unique and significant public amenity specifically referenced in the Montpelier Master Plan or in the Capital District Master Plan which will relieve the City of a significant cost which it would otherwise incur.
- Criteria for Level Three: To be considered for Level Three Benefits, the project must meet the requirements of Level Two benefits and at least TWO of the following criteria:
- a. The project will result in a net increase in residential units within the city.
- b. At the commencement of the contract term the real property additions and/or renovations will be assessed at $500,000 or more.
- c. Throughout the life of the tax stabilization contract, the project will result in a net increase of 25 full time equivalent jobs which pay at least a livable wage for a single person (as calculated by the State of Vermont Joint Fiscal Office) throughout the life of the contract.
- d. The project must be located within the boundaries of the designated downtown as approved by the Vermont Downtown Development Board or within an industrial or office park zoning district.
- Criteria for Level Four: To be considered for Level Four Benefits, the project must meet the requirements of Level Two benefits and at least THREE of the options provided in paragraph 9 above.
- Recapture: Where a project is subject to the recapture of taxes not paid because of a tax stabilization contract, the amount due shall be the total amount of the tax which would have been due if no tax stabilization contract had been in force plus interest from the date at which the tax would have been due. The property shall be subject to a tax lien for all unpaid amounts due under this provision.
- Transfer: The tax stabilization contract shall be transferred to the new owner of any property subject to such contract. Failure to transfer the contract shall be subject to recapture of the full tax amounts or discontinuation of the tax stabilization contract.
- Definitions:
- a. Industrial real property is broadly defined as property used for the manufacturing (production or processing) of goods and commodities.
- b. Commercial real property is broadly defined as property used for buying, selling and/or exchange of goods and commodities or the provision of services. Examples of commercial uses include, but are not limited to retail stores, warehousing, wholesaling, restaurants, hotels, offices and commercial apartments.
- c. The value of real property additions and/or renovations shall be calculated by comparing the assessed value of the property after improvement with the assessed value immediately before the improvement or the assessed value at the time of purchase, whichever is the greater. The difference is the amount of the real property addition and/or renovation.
a. Tax stabilization contracts shall have a term of no more than ten (10) years, effective at the beginning of the city's fiscal year following the date of approval of the contract.
b. The discount on the property value shall be for no more than one-half (50%) of the value of a new construction project or an additions/renovations project that would otherwise take effect in the year the contract is approved.
c. A proposed tax stabilization contract shall be the subject of two public hearings before the City Council prior to a final vote on the contract's acceptability.
d. Any discounted property value established by a tax stabilization contract shall be recalculated at the contract ratio in the event of a general property reappraisal and the discounted value will continue until the term of the contract is completed.
e. In an application for tax stabilization, the property owner(s) bears the burden of demonstrating how the project will meet the qualifying criteria of this policy. However, for projects that are desirable and are believed to meet the criteria for tax stabilization, the City Council may extend an invitation to the property owner(s) to enter into a tax stabilization contract.
f. Applications for tax stabilization should be made after approval of a zoning permit or other permits from the Development Review Board but prior to the issuance of a building permit. The property owner(s) is at risk of being refused tax stabilization, irrespective of the merits of the project, if the application for tax stabilization is filed after the building permit is requested.
a. A tax stabilization contract shall include any and all terms necessary to assure the City of the benefits which are the basis of the decision to grant tax stabilization to the project. In the case of a failure to carry out the terms of the contract, the City may terminate the contract and/or recapture the taxes for periods during which there was a breach of the terms, seek specific performance, and impose any other remedies which may be available under the terms of the contract or by operation of law.
b. Property owners who enter into tax stabilization contracts shall provide annual compliance statements documenting that all provisions of their tax stabilization contract are being met. Such compliance statements will be due by the anniversary date of the contract and will be reviewed by the city to assure that all criteria are maintained throughout the duration of the contract. Failure of the property owner(s) to provide compliance statements may be grounds for the City Council to terminate the tax stabilization contract.
Level One - A reduction in property value of one-third (1/3) for up to three (3) years.
Level Two - A range of awards which include:
Level Three - A range of awards which include but are not limited to:
Level Four - A range of awards which include but are not limited to:
Contacts
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City of
Montpelier
Department of Planning and Community Development
39 Main Street, City Hall
Montpelier, VT 05602-2950
Tel: (802) 223-9506
FAX: (802) 223-9524
E-mail: planning@montpelier-vt.org
Planning & Community Development Staff:
- Gwendolyn Hallsmith, Director, ext 31, ghallsmith@montpelier-vt.org
- Nina Thompson, Community Development Specialist, ext 32, njthompson@montpelier-vt.org
- Audra Brown, Planning & Zoning Assistant, ext 35, abrown@montpelier-vt.org
- Clancy DeSmet, Planning & Zoning Administrator, ext 33, cdesmet@montpelier-vt.org
- Eric Scharnberg, Web/GIS Specialist, ext 36, escharny@montpelier-vt.org
Updated September 14, 2005
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