BERLIN — A local business owner had his request for a tax abetment denied by the Berlin Mayor and Council last week after they decided it would set a precedent they don’t want to follow. The council did, however, offer to attempt to come up with more creative solutions to the applicant’s problem.
John Derrickson, owner of Derrickson Enterprises, came before the council hoping to have taxes he agreed on earlier, when his economic outlook wasn’t as bleak, loosened.
“Things have changed,” he said.
A few months ago, Derrickson asked Berlin to annex in nearly eight acres of land he owned into the town. At the time, his plan was to have businesses, including a laundromat, utilize the land. However, with the economy still lagging, especially in the real estate sector, Derrickson revealed that he’s having trouble attracting, and keeping, businesses.
“People are scared,” he said. “They don’t want to spend the money.”
According to Derrickson, his monthly income from collecting rent on businesses using land he owns is down by a third, or about $20,000, from only a few years ago.
“I’m paying my bills but I’m struggling,” he admitted to the council.
To help lighten the burden until things improve and business picks up, Derrickson asked to have $5,000 worth of taxes on the annexed land abated over two years, $2,500 each year. But the number was one he pulled off of the top of his head, Derrickson said.
“I don’t know what you guys can offer,” he said. “I’m here hat in hand.”
While everyone on the council expressed sympathy for Derrickson’s situation, all of them agreed that it was far from unique.
“It’s a hard time right now for everybody,” said Councilman Elroy Brittingham.
Both Council members Troy Purnell and Paula Lynch pointed out that Derrickson was fully aware of the dicey economy when he asked for his land to be annexed into the town.
“You’re a risk taker,” said Lynch, “and you took the risk and I don’t think it’s up to us to bail you out in this situation.”
Purnell wasn’t as critical, but maintained that Derrickson shouldn’t be surprised by the difficulty of attracting new business.
“You definitely knew what you were getting yourself into,” Purnell said. “I think you’ve got to honor your commitment [to the town].”
Purnell also reminded Derrickson that he could have negotiated a lower tax arrangement while in discussion with Berlin to annex his land. By this point, it’s a case of too little, too late, according to Purnell.
However, Purnell explained that it was because granting an abatement due to slow business would set a dangerous precedent for the town that Derrickson’s request couldn’t be approved.
“If it wasn’t precedent setting, I’d be all for it,” said Purnell.
Councilman Dean Burrell agreed.
“I’d really be afraid to start this for Berlin,” he said.
He also noted that if Berlin granted Derrickson’s request it would be obligated to abate taxes for every business that asked and possibly even homeowners.
Town Administer Tony Carson suggested an alternative. Instead of abating Derrickson’s taxes, the town could help find businesses that might be interested in locating onto Derrickson’s land.
Though it wasn’t the solution he was hoping for, Derrickson said that he would be happy for any help the town can offer.