Developer seeks TIF from Scarborough to redevelop Konica building on Route 1

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SCARBOROUGH — A developer who is trying to renovate the former Konica Minolta building plans to request tax increment financing for the project.

On Monday, Robert Gaudreau received conditional site plan approval from the Planning Board on his design for redeveloping the 60,000-square-foot building at 71 Route 1. But he said the plan will work only if he gets financial assistance from the town to meet requirements of moving the entrance to Science Park Road and creating a longer left-turn lane on the northbound side of Route 1 – improvements he estimates would cost upwards of $350,000.

Because of the Town Council’s summer schedule, and expectations that next Wednesday’s council meeting will be lengthy because of another agenda item, Gaudreau will have to wait until September to present his TIF proposal to councilors.

But the time delay is costing the developer money. He said if some kind of agreement isn’t reached by the end of September, “it could be all over.”

“My ability to keep the balls in the air is being diminished day by day,” Gaudreau said Wednesday. “Why do I want to own a building if I can’t do anything through the winter?”

Gaudreau said he must have warm weather  to put a new facade on the building without incurring additional expense. If temperatures drop to less than 40 degrees, he would have to heat the exterior to do the work, which he said could add $30,000 to the cost.

The Konica building has been an eyesore for the town for several years, since the photo-processing business was shut down in early 2006. Its redevelopment would be a welcomed improvement to the town’s northern gateway, Scarborough Economic Development Corp. President Harvey Rosenfeld said. But the town must consider whether it’s willing to gamble on the improved building’s benefit to Scarborough.

“One option is whether the town would create a TIF district where he would have to up-front the money to do the improvements, but he would be paid back as new taxes are generated,” Rosenfeld said. “I don’t know if the town will do it because the potential for generating more funds isn’t necessarily there; it would be very speculative and that’s what the town has to weigh.”

If Gaudreau, whose track record includes the redevelopment of the nearby former Humpty Dumpty potato chip factory into Nonesuch River Plaza, is unable to secure a TIF agreement with the town, it is likely he will back out of the deal.

“Even though I’ve spent money it’s better right now to walk away,” he said. “It’s a given that I’ve lost that much; it doesn’t make sense to lose any more.”

Gaudreau said the sellers have been “very cooperative” in trying to make the deal work because “they see it as a last gasp,” too.

Seller’s representative Andrew Gilmore said Wednesday that his client’s selling price has been reduced significantly from the original asking price and is priced considerably below the town’s assessed value of $2.3 million. His client purchased the property in December 2005 for $4 million.

“We’re not talking about the town returning the existing taxes – every year they would be paid on the existing value,” Gilmore said. “But after the new investment is made, capture a portion of the new taxes to help pay the financing costs.”

Gilmore said his client has received interest from other potential buyers, but the deals have always fallen through because of the property’s financial and physical challenges

Town manager Tom Hall said he has told Gaudreau the size of his project may not warrant a TIF because it is small in comparison to others in the town that have set the precedent. But he said he advised Gaudreau to make the request “specific to the unique costs to that site that show the numbers don’t work.” Hall said he thought the TIF discussion would be placed on the Sept. 2 council agenda and could result in “a classic public/private partnership.”

Gaudreau’s improvements and rework to the building and parking lot are planned in three phases. The resulting space will be geared to offices, with some as medical offices. He said at Monday’s Planning Board meeting that he already has a possible tenant for the first phase.

The construction phase would provide jobs for about 120 people, Gaudreau said.

“People are hungry and I would like to do my part to keep them fed,” he said.

Peggy Roberts can be reached at 781-3661 ext. 125 or