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Council approves waterfront tax breaks

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Council approves waterfront tax breaks

PORTLAND — The City Council narrowly voted Monday night to authorize $1.3 million in tax breaks for mixed-use development projects on the city's eastern waterfront.

In a 6-2 vote, the council approved tax increment financing assistance for Fore India Middle LLC, which is beginning the second phase of redevelopment of the former Jordan's Meats plant. Councilors John Anton and David Marshall voted against the proposal.

The council also voted 5-3 to approve TIF assistance for the Village at Oceangate LLC, developer of the planned Bay House project, located off India Street on the site of the former Village Cafe restaurant. Anton, Marshall, and Councilor Kevin Donoghue dissented in the vote.

Both proposals drew criticism from members of the public, who claimed the TIF assistance amounted to corporate giveaways.

"This is not good policy," said Matthews Street resident John Newton. "We're basically subsidizing condos, grocery stores, and parking lots. Who of us wouldn't like to have a TIF?"

The Fore India Middle project calls for a five-story, 180,000-square-foot development that would include retail space on Fore Street, three levels of office space on Middle Street, parking garages, and 18 condominium units along Fore and India streets.

The TIF assistance will provide up to $650,000 to help reimburse the developer's cost of sinking utility lines underground, as required by city regulations. In addition, up to $144,000 in TIF funding will be used to pay for consultant services for future development planning in the India Street neighborhood.

The Bay Shore project includes the construction of 94 market-rate apartments, a parking garage, and 5,700 square feet of retail space. The Bay Shore TIF will provide $648,000 to install sidewalks and utilities as part of the project.

Each of the two infrastructure improvements was estimated to cost more than $1 million, according to their developers.

Tax increment financing is commonly used by Maine municipalities to foster economic development, especially in depressed areas. Under a TIF agreement, the developer of a new project receives a portion of future revenue from property taxes associated with the project – provided that it benefits the public, according to state law.

The council has previously approved much larger TIF agreements, including a $31 million deal last year for the developers of a hotel, office, and performance-space complex on Thompson's Point.

But at Monday's meeting, some councilors were wary of continuing to grant the tax breaks.

"I have mixed feelings (about the Fore India Middle TIF)," said Donoghue. "This is not the straightest way to achieve the goal, but I can support it."

Donoghue said he would prefer to see TIF agreements that were granted under a systematic policy, "not on a project-by-project basis."

"The council would be better served by a comprehensive policy on TIFs," said Councilor Edward Suslovic.

"But do we really want to miss an opportunity to gain new tax revenue? This is a small investment for a much larger return, and we can't wait for a more comprehensive policy."

In other business, the council deadlocked, 4-4, in a vote to define exceptions to the city's snow-removal requirements.

A proposed amendment to the city code would have resulted in rules spelling out exceptions to the requirement for property owners to clear abutting sidewalks.

Janet Daigle, a resident of Outer Congress Street, said it was time for the city to "articulate the exceptions" to the snow-removal ordinance, pointing to a photograph of a huge snow drift that had built up in her neighborhood.

"It's time for some sort of legal relief," she said.

But councilors said that the city's public works department uses discretion in enforcing the rule, and can extend the time allowed for clearing sidewalks in the case of snow that is unusually heavy or difficult to remove.

"(The amendment) is a solution in search of a problem," Suslovic said. "My concern is that the new language could gut the snow ordinance, which has worked pretty well, in order to meet a perceived need."

The amendment will be heard again at the council's Sept. 5 meeting.

William Hall can be reached at 781-3661 ext. 106 or whall@theforecaster.net. Follow him on Twitter: @hallwilliam4.