Is economic development the answer?

By Nick Grabbe
Staff Writer

Published on March 02, 2007

Fiscal necessity is the mother of a new interest in attracting business to this town that has long been wary of economic development.

Facing a $3.7 million budget shortfall, a declining commercial base and uncertainty over whether voters will approve increased taxes, Amherst is looking for ways to be more business-friendly without diminishing its cherished "quality of life."

--Critic: Development hype is 'all horn and no engine'

"If we really focus on developing student and retirement housing, we would create significant revenue at a low cost of services," said Town Meeting member Baer Tierkel.

"If we focused on making commercially zoned land attractive to green-oriented, knowledge-based businesses, that could add another project or two. And pretty soon you are looking at $200 million in economic development."

What's happening now?

Here are some new developments on the development front:

• Town Manager Laurence Shaffer, who arrived at Town Hall last summer, has brought new energy to promoting business to broaden the tax base;

• He is recommending that Amherst hire an economic development director if voters approve an override on May 1;

• Shaffer has met with University of Massachusetts officials to seek their cooperation and to jointly plan an economic development "summit" this spring;

• Hampshire College's retirement housing plan, which could start construction this year, demonstrates how one big project can bring in $1 million in new tax revenue;

• As part of the ongoing comprehensive plan, a group has been meeting on strategies for eliminating impediments to expansion of the commercial sector.

Over the last 10 years, Amherst has had negative economic development. It has developed "a reputation as a closed community that's not terribly receptive to these ideas," Shaffer said.

Hadley has it

Commercial buildings worth more than $30 million have sprung up in Hadley because business owners didn't want to expand or build in Amherst. The developer of a $30 million student housing plan in North Amherst was scared off by neighborhood opposition. And Town Meeting has consistently resisted attempts to make development easier on land zoned for professional and research parks.

As a result of these decisions and the lagging increase in the value of business property, Amherst residents now pay more than 90 percent of the taxes. Hadley residents pay only 65 percent, and their tax rate is 42 percent lower than Amherst's.

Shaffer said he believes it's possible, over time, to eliminate Amherst's structural deficit through taxes on new commercial development. He cited the impact of railroads on the opening of the West and said perhaps the counterpart to railroads in this analogy is an infrastructure of wireless networks.

An economic chief

"We need a system in place to promote economic development or it's not going to happen," he said.

Shaffer's proposal for a new economic development director could be a tough sell when school budgets will have to be trimmed, even if an override passes. But he said that the position would pay off in the long run.

That view may be gaining some traction. Richard Hood, a parent who's been active in school budget discussions, recently endorsed it.

"If we had a town employee whose sole job was to find properties where development would not hurt Amherst's character but would be good places for certain developments to be done, and then try to hook developers and the owners of these properties together to make a deal happen, that person might pay for themselves 100 times over or more," Hood wrote recently in an Internet discussion group.

UMass is key

UMass is key to Amherst's economic development, because of the potential for faculty spin-off businesses and technology transfer, Shaffer said. He plans to meet with President Jack Wilson in coming months, and Chancellor John Lombardi has said UMass is "a willing and ready partner," he said.

"If we want them to be our best friend, we have to be their best friend," Shaffer said.

Veridian Village, Hampshire College's 120-home development aimed at residents 50 and older, is appealing to planners because it will add few students to the public schools.

"It's definitely a net benefit to the taxpayer," Shaffer said. "It takes us a third of the way to where we need to be."

Comprehensive plan

The comprehensive plan gives Amherst a once-in-a-generation opportunity to achieve consensus on policies to guide its future. Proposals such as increased density in village centers could emerge from the process.

There are many opinions on the type of economic development Amherst should focus on.

Alan Root, a member of the Comprehensive Planning Committee, is promoting "a higher-density downtown with retirement housing and trendy retail outlets open in the early evening, village centers with emphasis on retirement housing close to neighborhood shops and supportive facilities, and substantial office research and high-tech manufacturing facilities at the peripheries of Amherst."

Tierkel, a high-tech business consultant, favors working with Amherst College to invest in downtown and developments like Atkins Corner in South Amherst. He said there could be a "multiplier effect" to new development.

"If smart growth is coordinated in a strategy, then the value of surrounding businesses will also increase, yielding even more tax revenue as well as more environmentally friendly living spaces downtown, and then more services will move in to support those residents," he said.

Hidden-tech

Select Board member Rob Kusner thinks the biggest potential for growth is in the nontraditional "hidden-tech" area, and favors putting in place wireless service to foster "creativity-based industry." Also important is figuring out "how to equitably share the private profits made from such an industry with our local public sector," he said.

There are about 100 acres of buildable land in three sites that are zoned for professional research parks and that have tax incentive programs in place, said Planning Director Jonathan Tucker.

If neighbors' traffic concerns could be addressed in East Amherst and water and sewer extended to the area in North Amherst, these spots could be the focus of development, he said.

In addition to tax advantages, economic development could balance the town's cultural diversity, said Tucker, an Amherst native.

"If anybody gets left out in Amherst, it's people who are not academics, people who want to be machinists or grocers, kids who want to grow up and be electricians," he said. "It's not just a question of balanced taxes; it's social justice."

Mission impossible

Some residents believe that it's impossible to raise the money to stabilize Amherst's fiscal structure without ruining the distinctiveness of the town. Carol Sharick, a Town Meeting member, has little patience with this view.

"The reason the override is so infuriating to me is it allows the Select Board and the anti-development faction in Town Meeting to just keep putting off the tough reality that we are not sustaining our town the way we are running it now," she said.

Small changes could make a big difference, Sharick said.

"Ask a teacher who will lose their job this year what kind of difference $40,000 in new taxes would make to their life," she said.