HANCOCK COUNTY — Officials have approved agreements with a developer over three large buildings, the first in a new program that changes the county’s approach to development incentives.

The agreements are estimated to result in the same amount of money coming to the county as under the traditional tax break process carried out in the past. However, the contracts single out half of those allotments to be used for public safety and schools.

The Hancock County Board of Commissioners unanimously approved the economic development agreements with Exeter Property Group over the three large buildings the developer is planning for the western part of the county. Each building has its own agreement.

The Hancock County Council approved 10-year tax abatements for the developments earlier this month pending approval of the economic development agreements.

Traditionally, the county has granted tax abatements that start at 100% and decrease by 10 percentage points over the years that follow. Under the economic development agreements with Exeter, the abatements start at 100% and gradually reduce to 55% by the final year, after which property taxes are fully phased in.

One of Exeter’s buildings is planned to be over 520,000 square feet at the northeast corner of County Roads 300N and 400W. Without a tax break, it’s estimated to have resulted in over $6.3 million in property taxes over the 10-year period. If it were under the traditional tax abatement schedule, it’s estimated to have resulted in over $2.8 million.

Under the terms of the economic development agreement, it’s estimated to pay over $1.4 million in property taxes over the 10-year abatement period. However, the agreement also calls for that same amount in economic development payments, resulting in ultimately the same estimated total of payments to the county as under a traditional abatement.

The agreements state that the economic development payments are to be used for capital or operating costs for emergency management, 911, fire, police, public safety and educational services, or “any other lawful purposes.”

Agreements covering the other two buildings also estimate less in property taxes than the traditional abatement schedule, but with economic development payments making up the difference. Both buildings are planned for the northwest corner of County Roads 500N and 500W.

One, planned at over 1 million square feet, is estimated to result in over $2.7 million in property taxes and that same amount in economic development payments over the 10-year abatement period. The other, planned at over 677,000 square feet, is estimated to bring in over $1.8 million in property taxes and that same amount in economic development payments. John Jessup, president of the board of commissioners, said the new practice of economic development agreements is a way to weather challenges to local government financing brought on by state regulations. The county’s growth in assessed value greatly outpaces the limit at which the state allows budgets to grow, pushing down tax rates and putting pressure on taxing districts to increase services. On top of that are the funds taxing districts lose out on from the state’s property tax caps.

Although the three Exeter developments aren’t in any tax increment financing districts, many of the large buildings going up in the western part of the county are. In the county’s TIF districts, taxes from new development go to the county redevelopment commission, which uses the funds to improve the districts. Those improvements often consist of infrastructure like roads and utilities, but state law also allows them to be used for schools and public safety — as long as the expenses are for capital needs, not operational ones. For instance, TIF funds can go toward the purchase of a fire truck, but not paying or hiring firefighters.

Payments outlined in economic development agreements, however, can be used for operations.

The Exeter contracts are the first three of nearly 30 economic development agreements Jessup has in the works for large buildings proposed in the western part of the county. The county has been working on the program for about a year.

“It was the fruition of a lot of hard work that I know is transformational for the county,” Jessup said.

“This is going to change things; this is going to solve problems, and it’s going to make our county better.”

Bill Spalding, a county commissioner, agreed.

“I think this is going to help us in the future help pay for operating expenses for public safety and other needs, and I think it’s going to be a good plan to carry out in the future,” he said. Matt Price, a lawyer with Denton’s law firm representing Exeter, said his client was glad to take part in the process.

“We were, I think, an early adopter of this approach, which is a creative one and one I think provides a predictable stream of revenue for the county to meet some of its obligations arising in part from this development, but also things that are arising just from other economic conditions across the county,” Price said.

The agreements still need the signature of the Hancock County Redevelopment Commission’s president before they’re finalized.
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