Hello and thank you for taking the time to learn more about the Town of Charlton and its governmental operations. We will continually post here to provide updates on projects and initiatives that the Town Administrator's Office is involved with so you hear it from the source. Always feel free to reach out to us directly if you have any questions about what is going on around town!
Today we will be discussing the proposed Tax Increment Financing (TIF) Agreement being considered by Special Town Meeting on November 15th. A lot of questions have been asked about the project and the TIF that we hope to provide some clarity to the residents. We hope you find this information informative as you make a decision on the question at the meeting.
1. Why is the Town of Charlton offering a Tax Break to Amazon?
It is not a secret that Amazon is one of the most profitable companies in the world. They have a massive global presence with assets throughout their distribution network. Like any other business, Amazon sets aside a total budget for any new development project and how it expects to spend that budget based on available tax incentives. Dependent on the logistical challenges to overcome for a development, it is commonplace for the development team to work out a locally approved Tax Increment Financing Plan that phases in full assessment over time. In all of the Robotics Sortation Center Projects that have moved forward from Amazon's development team, the acceptance of a TIF was necessary to meet Amazon's approval to proceed with development. The below list outlines how the Charlton project compares to other Amazon Robotics Sortation Center TIFs that have been approved in New England:
* RI Law allows municipalities to set fixed tax payment amount over the full term of agreement. PILOT includes both Real Estate Tax and Personal Property Tax. MA & CT Law only allows municipalities to exempt a percentage of the full assessed value which is revalued annually based on real estate market conditions and internal investment.
In some circumstances, municipalities have negotiated Community Partnership Agreements (CPA) to provide tangible and direct community investments from Amazon towards programs that meet the companies' core values and address known and projected impacts from the project. For Charlton, this Partnership Agreement includes investments in Traffic Mitigation, Roadway Infrastructure, Public Safety Investment, Recreational Improvements and STEM Education. Below is how each community's partnership agreements have compared:
- North Andover MA - $8.6 Million CPA - ($18.7 Million Difference)
- Johnstown RI - $26.2 Million CPA - ($87.6 Million Difference)
- Windsor CT - $0 - ($8.8 Million Difference)
- Charlton MA - $9.8 Million CPA - ($1.8 Million Difference)
Outside of the Charlton CPA, Amazon has negotiated a separate agreement with adjacent Capen Hill Nature Preserve to assist in the conservation of Open Space in Charlton. Amazon has agreed that the terms of the TIF and Community Partnership Agreement which have been negotiated fit within their projected development budget, but proceeding with development is still subject to approval from Amazon.
2. Why isn't Amazon investing in a new Public Safety Complex as part of the CPA?
The need for new facilities for Public Safety continues to be a substantial need for the Town of Charlton. Most recently, the Town has attempted to move forward projects including a $28.5 Million Public Safety Building and a $19.5 Million Fire Station. Due to the economic outlook of the community at the time, the Public Safety Building required a debt exclusion vote to proceed with construction. Unfortunately, despite significant investment from the community, two votes to proceed with construction failed at the ballot box. Subsequently, a proposal to change the scope of the project to a Fire Station Only facility was denied to proceed to the design development phase at the following Town Meeting.
The need to invest in public safety facilities was well communicated to Amazon through negotiations of the TIF and CPA. Unfortunately, the funding needed to construct a Public Safety Facility or Fire Station does not come close to the amount of tax benefit that the Town looks to provide Amazon on this project or that Amazon looks to offset through direct community investment. Additionally, the prior failures of the Town to support the development of Public Safety Facilities did not give Amazon's team confidence that direct investment would result in a project proceeding.
While the need for a public safety building was not addressed in the CPA, the additional revenue received through taxation after application of the TIF would be more than sufficient to support the debt service required to fund a project the scope of the proposed Public Safety Building under the Tax Levy:
|Public Safety Building Under Tax Levy|
|Additional RE & PP Tax Revenue (year 1 full TIF)||$2,803,687|
|Annual Public Safety Building Debt Service ($28.5M)||$1,211,243|
|Remaining Revenue to be Appropriated||$1,592,444|
Ultimately, the decision to proceed with the investment in the town's public safety facilities will be left to the townspeople to decide based on budgetary decisions made at Town Meeting.
3. Can the Town create a bylaw that would restrict tractor trailer trucks from using any road other than Route 20?
Heavy Commercial Vehicle Exclusions are regulated by MassDOT. According to MassDOT, any public way is eligible for a Heavy Commercial Vehicle Exclusion provided a suitable alternate route is available and approved by MassDOT. The alternate route must meet one of the following conditions:
- Lie wholly within the community making the application to MassDOT
- Lie partially in the adjacent community but only on State Highway, or
- Lie partially in an adjacent community but have the adjacent community’s written approval.
- Numbered routes are ineligible for heavy commercial vehicle exclusions.
Along with the alternate route, the State requires an engineering study to be conducted and must meet at least one or more of the following warrants:
- A volume of heavy commercial vehicles, which usually is in the range of 5 to 8%, reduces the utilization of the facility and is cause for a substantial reduction in capacity and safety.
- The condition of the pavement structure of the route to be excluded indicates that further repeated heavy wheel loads will result in severe deterioration of the roadway.
- Notwithstanding the foregoing, in certain instances where land use is primarily residential in nature and a municipality has requested exclusion only during hours of darkness, a specific night exclusion may be granted.
Requests for heavy commercial vehicle exclusions must be approved by the Board of Selectmen prior to being submitted to MassDOT for consideration. Restrictions to heavy commercial vehicle truck traffic cannot be made blanket to town roads as a whole and cannot be targeted to a specific company's operation.
Ultimately, it is in Amazon's best interest that commercial truck traffic stays on the fastest moving roadways with the highest capacity to ensure that their product arrives on time and on schedule.
4. How will the TIF impact my taxes?
Individual tax bills are calculated based on the Town Budget approved by Town Meeting and the Property Owner’s proportional share of the Town’s total tax levy derived from that. The addition of the Amazon facility adds significant value to the overall tax levy the budget is divided among, significantly shifting the tax burden to the Industrial and Personal Property values.
The Town’s Tax Rate is established by dividing the approved Tax Levy by the certified valuation of all property in Charlton. The Tax Bill is then established by multiplying the property value, divided by 1,000, by the Tax Rate. The below graphic illustrates how that tax bill is currently calculated, how that relates to your current Tax Bill based on the current tax levy of the Town of Charlton and how that same levy would be redistributed if the total value factored in the projected value of the Amazon facility with the tax exemption applied. Note that the values shown represent how it would be reflective in the FY21 budget as approved and includes the full application of the proposed TIF in year one. The final Tax Rate impact would be dependent upon changes in property values over time, the approved Town Budget and amount of other local and state receipts received.
6. Where can I learn more about the project?
The Town of Charlton has established a webpage dedicated to consolidating information relative to this project. That information can be found HERE. Additionally, the Project Development team will continue to hold public information sessions regularly leading up to Town Meeting for anyone looking for additional information on the project.
Thank you for taking the time to learn more about this Article and look forward to your participation at Town Meeting. As always, feel free to reach out to me if I can provide additional information on the project, article or any other matter related to the Town Meeting, please feel free to contact me at Andrew.Golas@townofcharlton.net