Could High State Taxes Keep Dollar Tree From Building in Windsor?

Representatives from Dollar Tree delivered a presentation to the Windsor Town Council, Monday night, detailing a number of pluses and and minuses associated with the potential construction of a one million square-foot distribution center in town.

Dollar Tree has narrowed down possible locations for its new center to two towns: Windsor and Albany, NY.

At the crux of their decision is the benefit of state and local tax incentives, and, representatives told Town Council members, tax incentive deals proposed in New York are far greater than those presented in Windsor.

Unlike Windsor, the $17 million of personal property investment to be made by Dollar Tree in the daily operation of its new facility would not be taxable in Albany, a Dollar Tree representative said Monday.

Unlike Connecticut, State highways in New York are privately owned, the representative said, and are not subject to Federal law, allowing them "double-tandem" trailers and increase shipping efficiency.

The representative also added that they have been offered a 15-year tax-abatement deal with savings of more than $10 million, which is in contrast to the deal Windsor has offered: a 4-year deal at an abatement average of 75-percent.

The cost of building permits and fees are also greater in the Nutmeg State, he said.

While Dollar Tree's presentation painted a picture of a far-more lucrative financial picture should they choose to build in New York, when pushed, they revealed that Windsor is still their best option, despite paying higher taxes.

"I'm not interested in giving you a better deal just so you can get a better offer from New York," said Deputy Mayor Al Simon, who continued by asking the representatives, "Why are you here if it's going to be more expensive to do business here?"

The bottom line, Dollar Tree told Simon, is that operational costs would end up being cheaper in Windsor given its location.

With the bulk of their plans to increase distribution taking place in New England and into Canada, Windsor's location off of I-91, and proximity to I-90, I-84 and international ports (Dollar Tree imports roughly 40 percent of its goods) would enable the company to keep transportaion costs down, and would eventually be more financially beneficial than having their distribution center in Albany.

Windsor is their preferred location, representatives told the council.

Considering the pressure placed upon towns like Windsor to intice companies with large tax breaks, Councilor Aaron Jubrey questioned whether or not the State of Connecticut's policy's have created an unwelcoming environment for new businesses.

Why should Windsor have to give Dollar Tree such a large tax break in order for them to want to come to town?, he asked.

In the coming weeks, what will likely determine whether or not they choose to build in Windsor is now the "fast track" of approval they have requested.

Getting through the Town Planning and Zoning Commission and building regulations will be key to their decision, because opening their center before the holiday season in 2013 will be critical to the success of their retail outlets throughout the region.

Council members will take action on March 19.