BRATTLEBORO — Selectboard members signaled their support for keeping G.S. Precision in town by approving several actions related to the company's expansion plans.
"It's a solid step we're taking to support the local economy," said Selectboard Chairman David Gartenstein, acknowledging the decommissioning of the Vernon-based nuclear plant Vermont Yankee.
Two tax stabilization agreements were approved Tuesday night to assist in providing some tax relief for the company. While they apply only to the bill's municipal side, not the education property tax, an addition at the company's John Seitz facility plus new equipment will be taxed at a lower rate over the next 10 years.
Town Manager Peter Elwell said a "very intense" joint effort has gone on for the last six to eight months after G.S. Precision announced its desire to expand. Included in talks to help the business stay in Brattleboro by way of incentives were the town, state, Brattleboro Development Credit Corporation and G.S. Precision.
"They currently provide over 300 really high quality jobs and are looking through this expansion project to create at least 100 more," said Elwell. "It's an important project for our community."
Brattleboro was awarded a $1 million grant to provide support to BDCC as the group assists in the expansion project, Assistant Town Manager Patrick Moreland told the board.
Brattleboro Development Credit Corporation Real Estate Holdings, Inc., was created in the process to serve as the taxpayer. The fixed valuation on the property's improvements will cover the municipal tax assessment at 35 percent of its fair market value over the next 10 years.
"There will be an increase to the taxes received by the town over the duration of this agreement. It just wouldn't be 100 percent of the fair market value," Moreland explained. "The property taxpayer will be paying 100 percent of the municipal property tax on the previous value. The final value will be determined by the assessor post completion of the project."
The real estate group will be the property taxpayer for the new purchased equipment, which will be taxed at 25 percent of fair market value over the next 10 years. Approximately $4,775,000 of new equipment is expected to come to G.S. Precision.
This is a common practice, Elwell confirmed, noting the new value is taxed differently so that the agreement never "transfers burden" to taxpayers. Rather, it provides an incentive for businesses to expand with eye on growing the grand list.
"I think it's a good thing," said board member Kate O'Connor.
Dora Bouboulis raised concerns about how taxpayers won't benefit from the agreements for 10 years, saying the intention of tax stabilization and community development programs was never for an existing, highly profitable business but for start-ups or new entities. Some of that funding is now gone and not available to new companies.
"It is a multi-million dollar company that has access to funding," Bouboulis said. "This goes back to the sports team that says they're going to leave because nobody will build them a stadium. I like that they're staying here. I like that the jobs are here. I have real concerns about using that much of what we have available for economic development for this use."
Terms for a $200,000 loan also were approved that will see the company paying it back over seven years at an interest rate of 3 percent. That will come from the town's revolving loan fund, which O'Connor said is made up of money Brattleboro gets back from the state's Community Development Block Grant program.
"It's not real estate tax dollars. It's money that was raised by the federal government, loaned here, granted here, loaned out, repaid then loaned back out," said Gartenstein, adding that this funding explanation applied also to Bouboulis' concerns and maybe more so.
A federal grant program in the early 1980s assisted in the creation of the Exit One Industrial Park, where G.S. Precision was sited. The town secured $1.4 million to assist BDCC in developing the parcel, according to Moreland. BDCC was expected to repay that money once lots associated with the development were sold off. When those lots weren't selling as fast as anticipated, the town and BDCC came to a new agreement that provided loan forgiveness while any net proceeds of the sales would go to the town.
Two lots including a pond and parking rights on another lot were sold Tuesday to the new real estate group without any net proceeds to the town. The mortgages were discharged as well.
"It's been 19 years since that second agreement and the carrying costs associated with maintaining those parcels have made it such that there really isn't going to be any net proceeds," Moreland said. "It's highly unusual. It's based on the terms of a 1996 agreement."
In other business:
— The Elliot Street bridge discussion was postponed until the next regular board meeting on Dec. 15. Cited for VTrans' absence were bad driving conditions up north.