PORTLAND — City Councilors on June 18 will vote on new agreements governing the downtown business improvement district.
In doing so, they will make Portland Downtown larger and more expensive for owners of property within the district.
The proposed expansion and tax-rate increase had a first reading at the June 4 City Council meeting, and was reviewed at Monday’s council workshop at City Hall.
Portland Downtown, which promotes business and tourism and sponsors events including the Old Port Festival, Light Up Your Holidays and Shop for a Cause Day, also pays for four police cadets in the summer and this year is joining with Amistad to provide outreach counselors for people in crisis.
The district has also hosted workshops for business owners on the causes and impacts of homelessness.
Executive Director Casey Gilbert on Monday said the proposed expansion incorporates areas of new development that can still be managed by existing Portland Downtown staff and Department of Public works crews.
The expansion adds areas near Park Street and down High Street to Commercial Street. It would include new housing at York and High streets and the planned hotel and housing at the former Rufus T. Deering Lumber Co. on Commercial.
On Commercial Street, Wright’s Wharf, the Maine Wharf, and the Maine State Pier would be added. Future expansion into Bayside and along India Street is possible, Gilbert said.
Portland Downtown, established in 1992, currently contains 700 properties, 43 of which are tax-exempt, according to assessing data from the city. The total valuation is about $1 billion. Expansion would add 260 more properties, 47 of them tax exempt, with a total valuation of $163.5 million, according to council documents.
While considering the expansion, councilors would also be looking at the first tax increase for Portland Downtown properties in nine years in terms of assessments above and beyond the city property tax rate.
Property owners in the district now pay an additional 92 cents per $1,000 of assessed value over the established property tax rate. Without expanding the district, the additional tax levy could increase to $1.11. If district expansion is approved, the levy would be $1.03 above the regular tax rate, which is expected to hit $22.48 when the new fiscal year begins July 1.
Without expanding the district, the tax rate increase from 92 cents to $1.11 would bring in $160,000 more in revenue for a total of $932,000. The district expansion and tax increase to $1.03 would result in $962,000 in revenue.
The tax rate surcharge was $1.33 in 2005, reduced to $1.11 a year later, then dropped to 92 cents in 2007.
According to its budget documents, the revenue derived from the property tax surcharge funds about 90 percent of the Portland Downtown fiscal year 2019 budget.
In March, Portland Downtown and city staff met to discuss the expansion and possible increase in tax rates. In the meeting, City Manager Jon Jennings said he was concerned the additional revenue coming to Portland Downtown still did not fully cover the cost of public works services provided.
On June 8, Jennings said the increase in tax revenue would not fully close a gap city Public Works Special Projects Manager Bill Patnaude said is almost $157,000.
The gap in cost led Mayor Ethan Strimling to propose a 25-cent tax increase to Portland Downtown. His recommendation was not adopted by the City Council Finance Committee.
Jennings and Gilbert said they will continue to talk about ways to eliminate the gap the city faces, but Gilbert said more study is needed on what the actual costs are for services provided by Public Works.
“We are now looking at data on how the time is spent for things like cleanup and snow removal,” she said. “It boils down to that we are long overdue to look at it.”
Proposed expansion of the Portland Downtown district is marked by the shaded areas beyond the red lines. The expansion faces a June 18 City Council vote.
Shoestring Theater performers parade down Exchange Street in Portland at the start of the 45th Old Port Festival Sunday, June 10. The annual festival, which drew thousands of people to enjoy more than 200 food and vendor booths, and live music and entertainment on four stages, is one of Portland Downtown’s signature events.