GILFORD — The state may consider providing a tax credit to encourage Lowe's home improvement stores to set up shop in the former Lakes Region plaza, now Winnipesaukee Crossing, according to public records.

Lowe's has asked Gilford to request from the state the creation of a CROP zone, or community reinvestment and opportunity program zone. Under state law, businesses within such a reinvestment zone are eligible for tax credits from the state. The amount of those tax credits is spelled out in a written agreement, although they would generally be based upon the amount of compensation given to the company's employees.

The business is held to certain standards under that agreement, as well. It must clearly define the quality and quantity of jobs it will create and the duration of the taxpayers' commitments to the zone.

The tax credits would expire after five tax cycles.

"It's really a state program, they just need the local jurisdiction to make the request (to the state)," said John Ayer, Gilford's director of planning.

Under state law, a number of different locations are eligible for the creation of a reinvestment zone. Environmentally damaged areas, poor communities and underused industrial parks are eligible. Previously used commercial centers, such as Winnipesaukee Crossing, are eligible, as well.

Lowe's cannot apply to the state for the reinvestment program's tax credits directly. In fact, the local jurisdiction — in this case, Gilford — must actually file the application. If approved, Lowe's may file a separate application to be considered for the tax credits.

"It's ... a two-phased thing," said Roy Duddy, director of the New Hampshire Business Resource Center.

First, he said, a community must apply to establish the zone. Then, any business recently located or planning to locate within that zone can apply for the tax credits. The town does not stand to lose any tax money, he went on. All tax credits come from the state.

"(The program) does not come attached to any company," said Henry Goode, the chief of administrative support for the Division of Economic Development.

Goode explained that, since the July 2004 establishment of the program, only six zones have been created. Only one business has so far been able to establish itself as eligible for the tax credit program. Several other businesses are waiting in the wings, however.

Goode expects the program to expand as more businesses and communities become aware of it.

Local jurisdictions do not stand to lose by the program, he said. Although, he went on, it is possible that the creation of a reinvestment zone for one business or group of businesses may cause resentment among others.

One first step in establishing a reinvestment zone is a memorandum of understanding. A draft of that memorandum has been forwarded to the Board of Selectmen. Ayer, Gilford's planning director, has created a revised draft that may be more suitable for the town.

Ayer explained that the memorandum sent by Lowe's contained several vague passages. Although, he said, it seemed to him that the first memorandum was not meant to create liability for the town. Rather, he explained, it seemed to be a standard form.

In the Lowe's version of the memorandum, Gilford is asked to expedite the store's permitting process, and hurry the store through that process in no more than four weeks. The memorandum also asks Gilford to "expedite passage of this MOU (memorandum of understanding) prior to Oct. 1, 2005."

Ayer struck both of those requirements in his version.

Lowe's also included a passage requiring Gilford to enter into an economic agreement with the store. Ayer changed that passage to read that Gilford "may" enter into such an agreement.

Under the Lowe's version of the memorandum, the store had no "responsibilities."

Ayer's version of the memorandum requires that Lowe's enter into an economic development agreement within 90 days. The terms of that agreement must be "acceptable to Municipality's (Gilford's) Board of Selectmen."

Neither memorandum has been signed. Both will be presented to the Gilford selectmen at their meeting Wednesday. It is unclear if the selectmen will be interested in applying for the creation of a reinvestment zone.

Read the original story at The Citizen Online website.