Brunswick, Maine Street Station developer close to financing plan for inn
BRUNSWICK — Two weeks after scrutinizing a proposal that would return a portion of property taxes to the developer of the Maine Street Station project, the Town Council on Monday said it is close to finalizing the deal.
The funding mechanism – known as credit enhancement financing – would rebate a percentage of property taxes to JHR Development so the firm can build a 54-room inn near the corner of Noble and Maine streets.
During its Jan. 25 meeting, the council expressed frustration over the lack of details and a compressed schedule for completing the deal.
Since then, the council and JHR have met several times in executive sessions to hash out an agreement, which will ultimately determine how much property tax revenue will be rebated and, presumably, the terms of a performance clause.
If approved, the deal will be included in a proposed downtown tax increment financing district.
The TIF will allow the town to shelter land values to fund downtown projects and repay close to $3 million in outlays it has made for Maine Street Station. The expenses include brownfield remediation, street construction, traffic improvements and renovating an old school on Union Street for People Plus, a retirement services provider displaced by the project.
On Monday, the council was originally set to ratify the new TIF district without the credit enhancement component. However, the council voted 8-1 to suspend its vote because negotiations with JHR had advanced so quickly.
The council's vote was based largely on the recommendation of Finance Director John Eldridge, who said submitting the two elements as one could reduce confusion at the state Department of Economic and Community Development. DECD must approve the TIF.
"Things have come together better than anticipated," Eldridge said.
In January, councilors showed a willingness to accommodate JHR's credit enhancement request, which would effectively rebate a portion of the $338,000 the developer would pay in annual property taxes to finance further work on the project.
However, several councilors wondered why such an important proposal was being discussed a little more than month before the March 1 deadline to submit the TIF district for DECD review.
Councilors were further puzzled about why the provision was just being brought to them, particularly since a 2007 Joint Development Agreement says the town would consider a TIF for the project.
Although the credit enhancement provision isn't specifically mentioned in the JDA, the mechanism is the only one that could benefit the developer.
Such issues appeared to be resolved on Monday. However, Eldridge's recommendation to submit a single document did take some councilors by surprise.
Councilor Margo Knight wondered if meeting the March 1 deadline was enough time for the public to review the agreement.
Councilor John Perreault took those concerns a step further, saying not scheduling a separate public hearing on the credit enhancement deal would look "as if we're trying to push it down the citizens' throats."
Perreault voted against suspending the TIF vote.
The council held an closed-door session Monday to further discuss the credit enhancement plan. A follow-up session was scheduled for Thursday.
Steve Mistler can be reached at 373-9060 ext. 123 or firstname.lastname@example.org