Bill aims to help towns attract business; Legislature OKs plan to expand special tax incentive areas
BOSTON - The Legislature has given municipalities some extra help in attracting businesses by approving a bill that could double the number of economic development zones where towns would be allowed to offer certain tax incentives.
The Senate on Thursday enacted the bill, sending it to Gov. Mitt Romney’s desk. The legislation raises the cap, from 20 to 40, on the number of the state’s Economic Target Areas, which allow cities and towns with sluggish economies to offer tax incentives for business development.
Industry officials say municipalities in the state often have competed with one another for new businesses.
‘‘Increasing the number of target areas should help to keep this from happening,’’ said David Begelfer, the CEO of the Massachusetts chapter of the National Association of Industrial and Office Properties. ‘‘It’s a more rational approach. Communities should focus on competition from other states and overseas.’’
To be designated an ETA, communities need permission from the state Executive Office of Economic Development, and need to meet one of several criteria that show some sort of financial hardship.
But with the number of ETAs at a state-imposed cap, cities and towns have had to pursue two other alternatives - either petitioning an abutting community that already has the designation to join that area, or to request special legislation to gain that status.
Supporters say both of those options can be long and cumbersome for a community. The bill that was passed Thursday would make it much easier for cities and towns to apply for an ETA designation.
Sen. Harriette Chandler, a Democrat from Worcester, co-sponsored the legislation after the town of West Springfield petitioned the city of Holyoke to join its ETA, but Holyoke’s city council denied the petition. Chandler got involved in the issue at the request of Sen. Stephen Buoniconti, a Democrat from West Springfield.
Buoniconti said other communities have had a hard time negotiating with neighboring municipalities as well.
‘‘ETAs help spur economic development and create jobs in communities most in need,’’ Chandler said in a prepared statement. ‘‘By increasing the current limit, we allow the state to designate additional areas that qualify for this benefit.’’
The benefits to businesses include a 10 percent property tax deduction for developing an abandoned building, as well as the opportunity to seek property tax exemptions for new construction.
Within the existing 20 target areas, there are nearly 200 participating municipalities, including many on the South Shore, such as: Abington, Braintree, Canton, Carver, Hingham, Hull, Lakeville, Middleboro, Plymouth, Quincy, Randolph, Raynham, Rochester, Rockland, Taunton, Wareham, West Bridgewater and Weymouth.
Although an ETA designation can help spur economic development, some communities have been reluctant.
Christopher Cooney, president of the Metro South Chamber of Commerce, cited Cirelli Foods’ choice of Middleboro for its new plant. According to Cooney, Cirelli had considered opening a warehouse in West Bridgewater, but leaders there were not able to reach an agreement with neighboring Brockton, a target zone municipality, in time for the move.
That left the company no choice but to go for target-area benefits available in Middleboro.
‘‘I see the benefits to the South Shore taking place over time, as the region grows and there will be more interest in attracting and welcoming businesses,’’ Cooney said.
Robert Foley, spokesman for the state Executive Office of Economic Development, said local autonomy is one of the strengths of the program.
‘‘It really is locally driven,’’ Foley said. ‘‘The entire community does not have to become an ETA. It could be just three contiguous census tracts.’’
The environment also could benefit from the legislation, as projects in economic target zones are eligible for brownfield restoration funds that help pay for the cleanup of industrial pollution.