SCARBOROUGH — A special Town Council meeting has been called next week to discuss a request for financial assistance from the company behind much of the development boom on Haigis Parkway.
New England Expedition, which developed the Gateway Shops, Gateway Square and Cabela’s, was expected to make the request at a meeting Thursday morning, Jan. 8, with the town manager and town attorneys. The meeting was held after The Forecaster’s deadline.
Town Manager Tom Hall, who said he would not call this a bailout, disclosed the request at Wednesday’s council meeting. He said he had no specifics, but the request would involve modifying the developer’s credit enhancement agreement and making a change in sewer assessment fees.
“They’re working to get construction financing put in place for the
next phase and these are pieces that are standing in the way,” Hall
said. “It’s in the town’s best interest to assist as much as is
appropriate to get the financing in place.”
The original credit enhancement agreement with the town, which covers the Gateway Shops and Gateway Square, provides for some taxes to be reimbursed to the developer after its assessment reached $55 million. Under the plan, the developer would recoup $8.25 million over 10 years. At the request of New England Expedition’s Gene Beaudoin and Barry Feldman, the agreement was modified last summer to begin the reimbursement with only $35 million assessed value.
The financing source for the Gateway Square development will be different from the funding source for the Gateway Shops, New England Expedition attorney Rick Shinay said.
Beaudoin on Thursday said he and Feldman would like to restructure the credit enhancement
agreement to separate the allocation of the monies to the two separate
properties, which would help them obtain financing needed to complete Gateway Square,
“All of the decision makers, be it banks or retailers, are being more cautious,” Beaudoin said. “Everything that used to take a week takes a month; everything has slowed down. Lenders are still lending, but all at a slower pace.”
A much-publicized 90,000-square-foot Fairchild Semiconductor Corp. building is slated to be the centerpiece of Gateway Square, but construction has not yet begun on the project. Part of New England Expedition’s agreement with the company was to have the building completed by the fall of 2009, when Fairchild’s lease runs out at its current headquarters on Running Hill Road in South Portland.
When asked Thursday about the status of the Fairchild project, Beaudoin said only that he would be “meeting with them later today.” Calls to Fairchild were not returned before The Forecaster’s deadline.
Councilor Shawn Babine cautioned his fellow councilors Wednesday not to give the developer too much, because it could set a precedent for other businesses looking for financial help.
“I hope the town takes a look at what they’ll get in return,” he said. “Business is business and we all take risks.”
But Hall said Thursday that he thinks it’s important to work with the developers to reach a solution.
“This is not a bailout; we’re all in this together,” he said. “Fairchild is the gold standard; exactly what we want to encourage there. It’s vitally important to long-term success to the (Haigis) Parkway. Whatever we can do to keep that deal alive – that’s in our best interest.”
The special council meeting is scheduled for Wednesday, Jan. 14, at 7:30 p.m.