SCARBOROUGH — Town councilors reacted positively to an initial request for tax increment financing from a developer who wants to rework a vacant Route 1 building and turn it into office space.
A representative of the seller of the Konica Minolta building on Route 1 presented the TIF request to the Town Council on Wednesday.
Andrew Gilmore, project manager of Monks O’Neil Development, the company that owns the building, proposed a 15-year TIF that would help the buyer make required improvements that include extending the length of the northbound Route 1 left-turn lane, moving the entrance to Science Park Road and removing the existing entrance to the property.
The requirement for the improvements had been a surprise to buyer Roberts Gaudreau, who is best known in Scarborough for his redevelopment of the old Humpty Dumpty factory nearby on Route 1 into the Nonesuch River Plaza. After he realized the work would add an estimated $350,000 to his cost to turn the 67,000-square-foot building into offices, he considered backing out of the deal, but decided to first explore the potential for a TIF.
In documentation provided by Gilmore, the town currently receives $28,000 in taxes from the building, based on the original assessed value of $2.3 million. A TIF would allow the town to shelter new tax revenues generated by Gaudreau’s investment. The parties are asking for a TIF of $325,000, less than the estimated total to make the improvements. Under the 15-year plan, the gross projected new taxes would total nearly $796,000, with nearly $593,000 in projected total TIF revenues for Scarborough.
Benefits to the town could be significant, according to Gilmore and to Scarborough Economic Development Corp. President Harvey Rosenfeld. As many as 300 new jobs are anticipated by the redevelopment – “good jobs,” Rosenfeld said in a phone interview Thursday morning.
“(Gaudreau) is going to take a white elephant and turn it into good-quality space and hopefully attract the kind of jobs we need in Scarborough,” he said.
Gaudreau will not obligate the town to pay the bill, but is only guaranteed his money back if he creates the value in the redevelopment, Rosenfeld said. Calling it a “win-win-win situation,” he added that the TIF benefits the current owners, even though they are actually losing money on the sale of the property, because it allows them to be free of a difficult property in a tough market; it benefits the buyer because he is able to go forward with his plan, and it benefits the town because it creates jobs and develops another gateway into Scarborough.
The redevelopment of the building, which Gaudreau will call the Foundation Center, may also spur other new growth in the area, Rosenfeld said. Maine Medical Center owns property across the street and the Foundation for Blood Research, on Science Park Road, owns land that could be developed.
Another advantage of the TIF to the town, according to Gilmore, is the ability to shelter the new tax valuation and prevent the loss of state subsidies. With $3.3 million-plus in estimated new investment, his calculations show that aggregate shift to be almost $25,000 per year.
And, with little “good office space” available in Scarborough, Gilmore predicted the redeveloped building would fill up very quickly.
“As presented tonight, I think this is a pretty attractive opportunity for Scarborough,” Council Chairman Mike Wood said.
Councilor Judy Roy said it was a “good opportunity” that was “certainly not a tax burden to the community.”
Calling it “a well thought-out plan,” Councilor Ron Ahlquist said “it will be nice to have that road fixed; this seems like a good way to do it.”
Town Manager Tom Hall, who was initially wary of a TIF agreement, also approved of the idea.
“If (Gaudreau) can’t find a way to make it work … frankly I’m not aware anyone can make it work,” he said. “That building could sit there for a long time.”
Gaudreau and Gilmore will most likely return to the council at its first meeting in October.
Peggy Roberts can be reached at 781-3661 ext. 125 or email@example.com.