Selectmen Grant 5 Years of Tax Relief for New Hampton Beach Condos

The in-construction Sea Spray Condominiums will pay roughly 16 percent less in taxes for each of the next five years after receiving approval Monday for a special tax relief incentive designed to spur growth on Ocean Boulevard.

Hampton selectmen voted Monday to grant the tax relief for the property, a located at 83-91 Ocean Blvd. on the burned-down former site of the Old Salt.

Selectman Dick Nichols said the site, which had been a parking lot since a massive 1999, is a perfect choice for the first application of a tax policy passed overwhelmingly at the 2011 town meeting.

"I think if we were to turn the first one down… I think future developers would look at that and [be discouraged from even trying to build in Hampton]," said Nichols. "I think [the tax incentive] played a role in the developer’s decision to go forward.

"We had all of these lots sitting there with nothing on them. I think the incentive was a reasonable thing to do."

The article, which passed in 2011 by a vote of 2,080 to 786, gives selectmen the ability to grant buildings destroyed by fire and other natural causes a tax break for up to five years as they revitalize their structures.

The savings are generated by the fact that during those five years, or whatever term selectmen authorize, the property will be taxed based on its total valuation before it was damaged or destroyed. After the term is up, any property receiving the incentive would be taxed at the new, post-construction valuation.

Nichols estimated the relief for the Sea Spray Condominiums, which includes 36 residential units and eight street-level retail units, relief will generate about $35,000 in savings for the developer for each of the next five years.

That savings are small compared to the amount of tax revenue the property will generate for Hampton, though. Nichols said the lot has been taxed for the past decade at about $2 million, while the condos will likely be valued at about $10 million once construction is completed by June 1.

Town officials see the incentive as a win-win, as it encourages growth and renovations in an area they're trying to make into a year-round destination, in addition to helping out the local business owners and developers.

"It'll allow them time to recover the money for the work before they have to start paying taxes on the work," Town Manager Fred Welch told Hampton-North Hampton Patch in 2011. "Without this incentive, it's like they're paying for it twice because they're paying the higher taxes at the same time they're paying for the improvements."

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