CONWAY — The town’s Selectboard chairman says he is baffled as to why his colleagues cut in half the percentage of community impact fees marijuana establishments are required to pay.
John O’Rourke spoke up at Monday’s meeting in Conway Town Hall to ask Robert Armstrong and Philip Kantor why at the previous week’s meeting the fee was changed to 1.5 percent of gross wholesale receipts, even though 3 percent had been agreed upon two weeks ago. O’Rourke attended the March 11 meeting but was absent from the one March 18.
O’Rourke said he could not “think of one good business rationale” for lowering the fee, especially so suddenly.
“We’ve given up control and we’ve set a precedent,” O’Rourke told Armstrong and Kantor on Monday.
The five-year host community agreements with Roaring Glen Farm at 40 Whately Glen Road and Tornado Mountain at 1230 Main Poland Road call for annual 1.5 percent community impact fees, which are reduced by a quarter of a percent each year. One-time payments of $2,500 – paid months ago to cover the town’s legal expenses in preparing the host community agreement – will be returned to the businesses, Armstrong said Tuesday.
Kantor explained marijuana cultivation’s costs to Conway are currently unknown, and they could be well below 3 percent of an establishment’s gross receipts.
“That’s precisely my point,” O’Rourke said. “We don’t know what the expenses are going to be.”
O’Rourke said the town could accommodate a business by eventually lowering a community impact fee, but it will be extremely difficult to increase it if necessary. He said it is in the cultivator’s best interest to haggle down a fee percentage, no matter what it is.
“They’re going to fight that (1.5 percent) fee. You watch,” O’Rourke told Kantor.
State law allows for impact fees of up to 3 percent.
Kantor also said town counsel John H. Fitz-Gibbon recommended an immediate negotiation of an impact fee. A letter from Fitz-Gibbon to the town states it is in everyone’s best interest to “grapple with the appropriate number now, rather than having this issue arise potentially every year in the future.”
Armstrong said Tuesday the impact fee cannot be levied like a tax – it must reflect expenses the town is required to undertake as a result of marijuana cultivation within its town lines. He said he and Kantor believed lowering the impact fee was the best way to get the host agreements signed so the farms could proceed with their state licensing.
Armstrong explained the impact fee’s percentage is set to decrease each year in order to be fair to the farms, as their net incomes will likely increase as time goes on. He said some of the money from the impact fees might go toward a D.A.R.E.-like program at Conway Grammar School.
Town Administrator Tom Hutcheson explained that money from the impact fees are used to offset the costs of anything from extra police patrols to traffic studies.
Kantor said he can’t imagine 3 percent of gross wholesale receipts being necessary to cover costs to the town.
“We already got the tornado,” he said. “We’re unlikely to have another one of them.”
John Moore and Lisa Gustavsen, husband and wife, are working to get Roaring Glen Farm off the ground, while Philip E. Bowden and Sean Leah Bowden are the husband and wife behind Tornado Mountain, expected to be a cultivation and manufacturing establishment. Both couples are supporting the other in their endeavors.
Gustavsen and attorney Tom Lesser attended the March 11 meeting, where 3 percent community impact fees were discussed. O’Rourke said he did not want to place a heavy burden onto new businesses, but there are “a lot of unknowns” at this point. He asked his Selectboard colleagues if the proposed figures were fair and Kantor nodded and responded, “Yeah.”
Reach Domenic Poli at: dpoli@recorder.com or 413-772-0261, ext. 262