In New Hampshire, the “live free, or die” state, Wal-Mart has found a way to live free off the taxpayers of the Granite State. Town officials in Derry, New Hampshire have created a tax incentive to subsidize the world’s largest retailer. The Union-Leader newspaper reports that officials in Derry are finalizing an agreement with Wal-Mart that would have the retail giant pay $1 million for road improvements as part of a tax increment financing district, and taxpayers would “eat” the remaining $5.5 million. Town officials created the Tax Increment Financing (TIF) district last August, ostensibly just for Wal-Mart. The TIF will literally help pave a road to Wal-Mart’s proposed superstore — which will shut down the company’s existing discount store on Ashleigh Drive. As part of the agreement, Wal-Mart will pay $1 million, the New Hampshire Department of Transportation (state taxpayers) will pay $700,000 towards the road improvements, estimated to cost about $6.5 million. Of the total needed, $4.8 million will be bonded. The town will borrow the money, and Wal-Mart will pay off the bonds through their property taxes. Town officials want the bond proceeds by the summer, and plans for the new Wal-Mart will come before the town this spring. The town council discussed the agreement this week. The Councilors delayed entering into the agreement with Wal-Mart because one councilor objected to a clause in the agreement allowing Wal-Mart to pull out of the project at any time and for any reason. It also gives Wal-Mart the right to tell the town when to start the project but sets no deadline for doing so. The TIF district bonds will be paid off from the increased property values within the district. The TIF district covers Route 28 at Folsom Road to the Londonderry line. Wal-Mart is the first anchor store for the TIF district.
The town will use the increasing property tax payments to pay off the road work, but the prime beneficiary of that roadwork is Wal-Mart — because without the road improvements, their 225,000 s.f. superstore would not be built. Because of this TIF arrangement, Wal-Mart’s application before the Planning Board is a foregone conclusion — even before any hearings are held. This tax agreement, in effect, trumps the zoning process completely, because if the town were to reject the store in zoning hearings, the TIF deal would be dead. So the TIF is driving the rest of the process. Derry will wind up using Wal-Mart’s tax payments to build a road, instead of seeing those property taxes help their schools or other town costs. The towns says the road widening is a capital improvement they just had not got around to doing — but now they are using public borrowing to give Wal-Mart corporate welfare to get the job done.
These kinds of “developer’s agreements” are nothing more than an advance lock on a land deal for the developer. In this case, Wal-Mart needs road work done in order to build its store. Route 28 does not need to be widened to accommodate Derry’s residents. The widening is to open up the area to more large scale retail development. The end result is more low wage jobs, an empty Wal-Mart discount store, and more market share in the hands of the international corporation. Is this a cause worth investing state tax dollars into? If Wal-Mart proposes a project that cannot financially stand on its own, town officials should reject the plan. Wal-Mart needs the widened road, so let them pay for it themselves up-front, or find a more suitable location. The incremental value of its land would have gone into the Derry town coffers — to help pay for the extra cops that will be needed to cover the increased police calls from the Wal-Mart supercenter.
