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CUMBERLAND — The Town Council is scheduled to decide Monday whether to expand one of the town’s five tax increment financing districts to pave the way for a biotechnology company that could bring up to 100 jobs to town.
TIF district No. 3, on the northwest side of Route 1, would be expanded north to include another eight lots.
Expansion of the district would facilitate the move to Cumberland of Maine Standards Co., now based in Windham. The company would build a 30,000- to 40,000-square-foot building on a 7.5-acre property between Powell Road and Tuttle Road.
“We’re very hopeful that Maine Standards lands here,” Town Manager Bill Shane said last week, adding that the company would be “a great partner in our community.”
Maine Standards employs 50 people and expects to grow to 100 employees in the next five years, according to a Jan. 6 memo Shane sent to Route 1 area residents.
Shane noted that expanding the TIF district does not change zoning or allowable uses, but rather “is strictly for the ability to offer desirable businesses tax incentives to locate to Cumberland,” and also allows for infrastructure expansion in the corridor.
Maine Standards signed a credit enhancement agreement with the town last March for a property further south on Route 1 in the existing third TIF district. The company ultimately opted to look elsewhere, Shane said. With expansion of the district, the Town Council would authorize Shane to sign a new agreement with the company for the northern location.
The Maine Department of Economic and Community Development must also approve the expanded TIF district.
TIF district No. 3 will expire in about 24 years, Shane said last week. New property tax value – or tax increment – would be created on a property within the district’s boundaries after a site there has been developed.
If Maine Standards moves in, new value created after the company builds its facility would be sheltered by Cumberland, as opposed to adding to the town’s valuation.
This sheltering would avoid an increase, in this case, in Cumberland County’s tax assessment to the town. It would also avoid a decrease in state subsidy to the Cumberland-North Yarmouth school district, which could otherwise be triggered by an increase in Cumberland’s valuation.
The county tax assessment and school revenue appropriation are based on total valuation minus the increment in TIF districts. Tax revenue sheltered through the TIF district, about 50 cents on the dollar, must go toward economic development projects.
A TIF district allows a town to offer tax incentives, called credit enhancement agreements, to businesses, Shane said. Through this agreement, Maine Standards would receive up to a 50 percent tax rebate each year until it has reached a cumulative rebated tax amount of up to $500,000.
Shane noted that “it usually is somewhere between 11 and 15 years that (the agreements) basically max out. … If we didn’t have the credit enhancement agreement, or if we didn’t have the TIF district, we’d be netting out the same.”
The town does not have to offer such agreements, Shane said. But if doing so can bring a business to the community that creates jobs and brings people to the town and school system, he added, “I think that’s a very positive thing for the community.”
The value of the land where Maine Standards would move is a little more than $500,000, Shane said. The building – the increment the town would capture – could be about $2.5 million or $3.5 million, depending on whether the project is phased in or done all at once, he explained.
“The bigger issue obviously is if we can successfully land these type of companies,” Shane said. “This gives us the instruments we need as staff … to recruit businesses and to try to get people here. Because it’s tough right now, and this would be a huge boost to our tax base eventually.”