SCARBOROUGH — The Town Council on Wednesday set a November public hearing on a proposed tax break for developers of the proposed Scarborough Downs project.
The town and the developers hoping to overhaul the racetrack have tentatively agreed on a tax increment financing package that could produce benefits of up to $81 million.
A workshop on the proposal was held prior to the Oct. 3 council meeting and included information about timeliness, financial figures, the development mix, and job creation. Councilors, town staff and Crossroads Holdings LLC partners were there, along with about 20 people from the public.
Crossroads Holdings, the partnership that includes developers Rocco, William and Marc Risbara, of Risbara Bros. Construction Co., and Peter and Richard Michaud, purchased the property in January for $6.7 million.
The public hearing is set for Nov. 7, pushed back from a previously scheduled date of Oct. 24. Council Chairman William Donovan said Thursday morning the council changed the hearing date to allow more time for an outside cost analysis and to hold another council workshop on how revenue from the project would be spent by the town.
Risbara said last week he hoped the agreement would be confirmed by the end of October.
Informational sessions are scheduled at 6 p.m. Tuesday, Oct. 9, at the Dunstan Fire Station, and 1-3 p.m. Monday, Oct. 15, at the Town Office.
The TIF district designates the property for growth over a maximum 30-year lifespan. The parties agreed on a credit enhancement agreement where 40 percent of new tax revenue generated incrementally from the property could be returned to the developers for additional investment. If performance standards are not met only 25 percent of taxes would be reimbursed to the project in years 11 to 20.
The non-bonus cap to be returned to the Downs if the development meets town standards of scale and mixed use is $55 million over 20 years, according to the town.
If the project outperforms standards set, such as faster development, and the cap of $55 million is reached, the project will be eligible for a 10 percent bonus for the next 10 years, capped at $2 million per year, or a total possible value kicked back to Crossroads of $81 million.
The development will only receive payments on new revenue it generates. Developers will foot the initial $265 million cost of an infrastructure buildout for roads and sewers.
According to documents on the town’s website, the Downs is expected to include nearly 2,000 housing units; 1.1 million square feet of office space, retail and lodging, and 775,000 square feet of industrial space.
The project, over the span of 20 years, is expected to generate net tax revenue for the town of $266 million. Without the public-private partnership for development, Assistant Town Manager Larissa Crockett said at a meeting Monday night at the Scarborough Public Library, the Downs would generate $117 million in net revenue.
Crockett said the town sees the potential for job growth and a mixed development that would be beneficial for the town, and emphasized the developers would only be getting money back they already paid in. The partnership fosters faster development and a mix of development, she said.
As part of the agreement, the developers will only build 750 single-family homes, not including affordable housing. The area is zoned to allow 4,000 homes, said Risbara at an informational session held last week.
Rocco Risbara III said the plan for the 500-acre Downs property is a responsible mix, including 80 percent nonresidential in terms of acreage.
The town wants the project to include 1.2 million square feet of nonresidential development, with the option for a community center. The town would have to agree in four years that such a building is desired, and form a committee to formulate plans.
The developers have been negotiating for several months with town officials for the TIF district and credit enhancement agreement.
The grandstand at Scarborough Downs.