Merrimack Council OKs $7.22 million payment to settle Premium Outlets tax case

MERRIMACK, N.H. — The Merrimack Town Council authorized the town manager to pay $7,217,594.85 to Merrimack Premium Outlets to satisfy a stipulated judgment resolving a multi-year lawsuit over the outlet center’s property assessment. The council voted 6-0 to approve the payment and to authorize the town manager to sign all necessary documents.

The decision follows a New Hampshire Supreme Court ruling on Feb. 28, 2025, that the town lacked authority to alter the outlet center’s assessment mid‑cycle. That ruling left open a remaining dispute over interest on the refunded assessment; council and the outlet center negotiated interest of $750,000 as part of the settlement.

Why it matters: The payment will draw down the town’s unreserved fund balance (the “rainy day” fund). Town staff told the council the fund began fiscal year 2025 at about $10 million, and after previously planned uses would have been just over $8.3 million. After the judgment payment, staff estimated the unreserved fund balance would be about $1.1 million, well below the town’s 4–8 percent guideline for unreserved fund balance.

Council and staff framed the vote as a legal and fiscal necessity. Town staff summarized the court history for the council and said the Supreme Court determined the case to be one of equity: the town could not arbitrarily increase a single property’s assessed value shortly after a revaluation.

Councilor comments emphasized closing the chapter. Councilor Tom said, “I’m glad it’s over,” reflecting the desire among councilors to resolve the litigation and move forward.

What the town will do next: Town staff said there is money available in the unreserved fund balance to make the payment, but rebuilding that balance will require several years of conservative budgeting, revenue performance above estimates, or appropriation savings. Staff told the council they do not plan to rebuild the fund balance via a single budget action this year; instead the town will rely on future revenue and expenditure management.

No oral amendments or alternate payment plans were adopted. The motion authorized the manager to make the full payment and execute settlement documents.

Context: The dispute originated in 2017 after a revaluation and subsequent change to the outlet center’s assessed value. The Superior Court initially ruled for the town; the Supreme Court later reversed on the authority question and remanded, setting the stage for the settlement. The negotiated interest amount was presented to the Superior Court and entered as part of the stipulated judgment.

For readers tracking municipal finances, the result is both a legal resolution and a notable near‑term reduction in the town’s unreserved fund balance, a figure the council reviews regularly against its 4–8 percent guidance.