Democrats urge change to new tax incentive

DANBURY — Democrats on the City Council are demanding the city revise its plan for a new tax incentive designed to benefit multimillion dollar data centers.

The council has spent the past two months debating the new incentive, originally pitched by Praxair, that would offer any company investing more than $15 million in a data center a 50 percent discount on the personal property taxes to be paid on the high-tech computer equipment inside the facility.

But Democratic council members argued this week the city should modify the proposal to make clear the council would have final approval before incentives are awarded or tailor the incentive to Praxair.

The suggestion failed, however, with the Republican majority of the council leading a 13-5 vote to advance the existing proposal to a final vote next month.

Councilman Paul Rotello has been the most vocal opponent of the incentive. Although he wants to provide an incentive to Praxair, he said he fears opening it to other companies could allow some to build large “server farms” that would qualify for the discount but not create many new jobs.

“It’s ill-advised, it’s anti-job and it’s unnecessary,” Rotello said Monday. “We can give Praxair exactly what it wants. The executive from Praxair can go back to his board tomorrow and say, ‘The city of Danbury gave us everything we wanted (with) a different ordinance’ ... We can do that and protect ourselves and the city of Danbury taxpayers going forward.”

Tax Assessor Brian Lastra told the council it would have the final approval of any incentives under the city’s tax abatement policies.

Republican council members argue the measure is necessary for Danbury to compete with incentives offered by other cities across the country.

“The risk is not the 50 percent we’d be losing, the risk is the resulting amount of money because people would not locate a data center here in Danbury,” Councilman Vinny DiGillio said. “That’s the real risk because you realize none of the money if nobody comes here, but you realize half of it if they do. I’ll take half a loaf every day.”

Praxair officials have not detailed a proposal for a data center in Danbury but have hinted the company is considering it near its Riverview Road campus. They helped the city craft the new incentive, suggesting the company would apply and would meet the minimum $15 million investment to qualify.

The tax discount on a $15 million investment would save a company about $130,000, Lastra told the council.