SCARBOROUGH — The company responsible for the bulk of recent development along Haigis Parkway is requesting financial help from the town.
The principals of New England Expedition LLC, which built Cabela’s and the Gateway Shops, met recently with town officials to seek restructuring of a tax increment financing agreement.
The agreement allows the developers to receive a reimbursement of real estate taxes up to $825,000 per year for 10 years, up to a maximum of $8.25 million.
But because of the downturn in the economy, coupled with what the developers believe is a low assessment of the property’s value, the company is realizing only $400,000 this fiscal year and will be unable to earn back the maximum within the 10-year window.
It is asking the Town Council to extend the window to 2028, which would increase the amount of time available to recover taxes, without increasing the total amount.
“We’re not here before you this evening to ask your consideration for a bailout in any form or manner in terms of money,” Barry Feldman, of New England Expedition, told the council.
The promise of the full payback is even more important in this economic climate, Feldman said, because it allows the company to obtain bank financing necessary to finish what it has started.
While 93 percent of the Gateway Shops development has been completed, only the infrastructure has been completed for the 215,000-square-feet of office space planned for the Scarborough Professional Gateway. That project suffered a major setback when Fairchild Semiconductor backed out of an agreement to build a 90,000-square-foot headquarters.
Town Manager Tom Hall said Wednesday that the town and developer are partners in the development and extending the TIF time frame should not be perceived as a “bailout.”
“They’ve made that investment; if they walk away today, they’ve already spent the money,” he said.
With the company’s construction loans for an undisclosed amount through Sovereign Bank scheduled to come due next month, Feldman and his business partner, Gene Beaudoin, may have trouble getting an extension without the security of the full TIF amount, Hall said.
But, he said, the decision to extend the time must be made because it is in the best interest of the town.
“My view is we have a very reputable developer; the sort of factors confronting them could not have been foreseen, (and are not) of their doing and if they are to falter here … I’m not aware of anyone who has the wherewithal to step in their shoes,” Hall said. “If they falter anyway, we’re no worse off.”
And according to Feldman, he and Beaudoin have no intention of walking away.
“We are undaunted and fully committed to completing this project and to having it realize the full economic potential and benefits for the town and ourselves,” he said during the workshop.
Most councilors at the workshop appeared to be comfortable with extending the terms. But Councilor Karen D’Andrea struggled with the idea.
“At this point, it’s fairly easy for me to say I’m conflicted and I’m working hard to get all the information I need to make the right decision for the town,” she said Wednesday.
D’Andrea has suggested that the company provide the council with a letter from a lender that reflects its willingness to grant a loan if the terms of the contract are extended.
Councilors will be discuss an extension at their next meeting on Wednesday, March 18.