Businesses in Bow may be eligible for a tax credit under state program to spur growth
Businesses in some areas of Bow may now have access to special tax credits under a state program intended to stimulate growth in under-used industrial districts, though none have yet taken advantage of the incentive.
Since March of last year, the town has obtained state approval to designate three such districts as Economic Revitalization Zones; the latest, a roughly half-mile stretch along South Street, was approved in April. Businesses in the zones can apply for the credit if they meet two criteria: creating jobs and investing in capital improvements.
The move is part of a long-standing effort by town officials to boost Bow’s commercial tax base, which has lagged in recent decades relative to residential growth. Other endeavors include a massive water and sewage expansion, completed last fall, and a new town website launched this year that provides more information for potential commercial tenants.
“As a town, we’re trying to do everything and anything we can to make the town attractive for a business,” said Bill Hickey, chairman of the Business Development Commission in Bow.
The other zones include a 4-acre plot along Dow Road and the Route 3A industrial corridor. The town doesn’t plan to designate any more in the foreseeable future, Hickey said.
To qualify for the program, businesses must prove they have created full-time employment and made sizable infrastructure improvements or other capital expenditures.
Most eligible businesses receive at least some credit, said Rob Barry, a finance officer at the Department of Resources and Economic Development who helps administer the program’s funds, about $825,000 per year. The most any business can receive is $200,000, though that amount is prorated based on how many businesses are approved and how much funding is subsequently available. Last year, the largest credit issued was $130,000, Barry said.
The credits are good for five years, Barry said, meaning businesses can cash them in any year during that period – though they can withdraw a total of only $40,000 annually. For example, a $200,000 credit would be distributed in five $40,000 installments; in contrast, a $5,000 credit could be used all at once and either immediately or in the fifth year.
The program was created in 2008 and there are now at least 137 revitalization zones across the state, including two in Concord and one in Franklin, according to the state. Last year, about 15 businesses received credits through the program, Barry said.
Hickey suggested that businesses in Bow have yet to tap the program’s resources because the zones are relatively new. Though they’re important, he noted that the biggest commercial incentive so far has been the expanded water and sewage access along Route 3A, which proved critical in luring Exel, the developer of the new state liquor warehouse, and Coastal Forest Products, which has proposed building a similar facility on Johnson Road.
Hickey and others insist there is still more to do. For one, the new town website needs to include information about available commercial properties, Hickey said.
Art Cunningham, chairman of the planning board, said his group needs to clarify development procedures and help ensure that developers who bring water lines or other services to their business are reimbursed if other businesses eventually tap into that infrastructure.
Between 1990 and 2010, Bow’s population grew from 5,510 to 7,519, a jump that, according to Hickey and Cunningham, far outpaced economic growth. More people resulted in the need for more services, and over time, with commercial development relatively stagnant, the business community’s tax contributions dropped proportionately.
Cunningham said he recalled the years a decade or two ago when taxes on Merrimack Station accounted for about 50 percent of the town’s tax base. That’s declined to about 20 percent today, he said. There are 143 registered businesses in Bow, according to the town’s website.
But residential growth has ebbed in recent years, Cunningham noted, and commercial growth is beginning to catch up.
(Jeremy Blackman can be reached at 369-3319,
firstname.lastname@example.org or on Twitter @JBlackmanCM.)