Scarborough Downs developer defends proposal for tax break

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SCARBOROUGH — Developer Rocco Risbara III this week responded to criticism of his proposal to create a financial partnership with the town for redevelopment of Scarborough Downs.

Risbara is a principal of Crossroads Holdings, the limited liability corporation that includes developers William and Marc Risbara, also of Risbara Bros. Construction Co., and Peter and Richard Michaud. Crossroads purchased the property in January for $6.7 million.

In a written statement provided Wednesday, Risbara defended the pace of negotiations and said the project could deliver hundreds of jobs.

The developers have been negotiating for several months with town officials for a tax increment financing district and credit enhancement agreement to fulfill the vision of community space and a “modern, active, mixed-use” downtown area on about 40 acres at the core of the racetrack property.

Phased build-out of the project is expected to take about 30 years.

With a TIF, property taxes paid by the developers could be returned to them to pay for project amenities, such as a community center, that would benefit the town. The tax money, however, can also sometimes be returned to businesses to help their bottom line.

A public hearing was slated for Sept. 5 to discuss the project following an Aug.15  presentation, but it was postponed. A new date has not been set. An executive session was held instead with the Town Council, Town Manager Thomas Hall, Economic Development Director Karen Martin, and the town attorney to discuss bargaining principles, council Chairman William Donovan said in a Sept. 7 letter to The Forecaster.

Members of the advocacy group Scarborough Residents for Reasonable Taxes, or SMARTaxes, contend the TIF should be decided by a public vote due to the scale and cost of the proposal.

Councilor Peter Hayes also said he supports a referendum on the question, either binding or nonbinding.

“It has to be a community decision,” Hayes said Wednesday. “The decision will shape the town for 30 years.”

In his statement, meanwhile, Risbarra said his family has been actively involved in the development community for more than 50 years.

He said it should not surprise residents that a TIF is being proposed, since the 2006 update to the town’s Comprehensive Plan specifically identified the Scarborough Downs property as a growth area.

“It called for mixed-use development and named The Downs property as ‘the new heart of Scarborough’ where development would ’emerge as a result of cooperative planning between the landowners and the community,’” Risbara said.

“That 2006 plan called for expanded zoning and even then, in 2006, for the creation of a TIF District. For 12 years, we’ve known it was going to take a public/private partnership to develop this land to its highest and best use.

He said the property has been under contract to be sold 17 times in 20 years, without success.

Risbara said the town has worked for two decades to attract developers and, in  2013, the new Crossroads Planned Development District expanded zoning allowances.

“We have kept our end of the deal,” Risbara said. “The master plan we put forth is synced to the town’s current comprehensive plan which embodies the wishes of residents. Further, our plan delivers a balanced, planned community creating an economic hub in Scarborough – providing amenities and prosperity for decades to come.”

To answer the accusation by opponents who claim the process has been too fast, Risbara said the company has presented its vision for the project 10 times since January through the Planning Board, Town Council, and other agencies in public sessions.

The developers are advocating for a decision, he said, because they have commitments from seven companies that want their businesses in Scarborough.

“The early phase of this project is purposefully designed to be an economic kick-starter,” Risbara said. “These businesses will consume over 450,000 square feet of employment space and bring hundreds of jobs to Maine – and we’d like them to be in Scarborough.”

According to town documents, bargaining principles drafted at the Sept. 5 closed-door meeting included reimbursement based on elements of the project that have public benefit; potentially considering multiple credit enhancement agreements on different aspects; and an overall cap on reimbursement to be no greater than the projected net revenue to the town.

Martin, the economic development director, has also drafted expense and income analyses projecting the long-term performance of different development scenarios based on whether an agreement is reached or not.

In his letter, Donovan said an independent consultant will evaluate the analyses to assess their reliability.

He also thanked the community “for its patience and trust.”

“The Town Council certainly appreciates that residents are anxious to learn the particular details of a tax arrangement,” the council chairman said. “However, we believe it is important that proper due diligence is first done to ensure the integrity of the analysis and the appropriateness of the proposal. This will allow for meaningful input from residents.”

Juliette Laaka can be reached at 781-3661 ext. 106 or at jlaaka@theforecaster.net. Follow her on Twitter @JulietteLaaka.

The grandstand at Scarborough Downs.

My family and our extended team are second-generation Scarborough residents, developers and business owners who have been actively involved in the development of our community for over 50 years. During that time, we have closely followed the town’s ongoing comprehensive planning and zoning efforts. In 1994, the town adopted a Comprehensive Plan and in 2006, it was reviewed and updated. The 2006 update specifically identified the Scarborough Downs property as a growth area. It called for mixed-use development and named The Downs property as “the new heart of Scarborough” where development would “emerge as a result of cooperative planning between the landowners and the community.” That 2006 plan called for expanded zoning and even then, in 2006, for the creation of a TIF (KC1) District. For 12 years, we’ve known it was going to take a public/private partnership to develop this land to its highest and best use.

The town has worked diligently over two decades to attract developers. In 2013, the new “Crossroads Planned Development District” expanded zoning allowances. Our team has watched the property go under (and fall out of) contract 17 times over two decades. Of those failed attempts, all but two deals were centered around bringing a casino to Scarborough. When we had an opportunity to purchase the property, we studied the 2006 Comp Plan and the zoning and made an offer. Upon successful completion of a deal there was celebration over the fact that we are local developers that wish to follow the desires of residents and municipal leaders. We have kept our end of the deal. The master plan we put forth is synced to the town’s current Comprehensive Plan, which embodies the wishes of residents. Further, our plan delivers a balanced, planned community creating an economic hub in Scarborough – providing amenities and prosperity for decades to come.

To those who say this process has moved “too fast,” consider this – since January 2018, we have presented our vision for The Downs at least 10 times to the public, including to the Town Council, the Planning Board, the Long Range Planning Committee, the Scarborough Economic Development Corporation and the Transportation Committee in a variety of public sessions. In April, the town hosted a public discussion about TIF districts so residents could begin to understand the topic. The town has contemplated creating a TIF district on this property since 2006. It has been diligently reviewing our specific request for a Credit Enhancement Agreement for the past six months. This has not happened overnight. This deal is 12 years in the making.

Our development team is advocating for a decision in the near term with purpose. We have commitments from seven end-users that want to home their businesses in Scarborough. The early phase of this project is purposefully designed to be an economic kick-starter. These businesses will consume over 450,000 square feet of employment space and bring hundreds of jobs to Maine – and we’d like them to be in Scarborough (KC2).

Town leaders continue to carefully weigh the value of our proposed master plan against the prudence of creating a Downtown TIF District and the needed Credit Enhancement Agreement to make this project feasible. Our team will invest hundreds of millions into public infrastructure and amenities because we, like the town, see incredible potential. The project will diversify Scarborough’s tax base, create thousands of jobs, generate millions in tax revenue and attract new businesses to town – all without burdening the taxpayers. This plan was not hatched in a few weeks, or even a few months. It is the result of long-term planning and a substantial public process, and we hope that the town of Scarborough views this as an opportunity to realize a vision shaped over a decade ago.

Rocco Risbara III, principal
Crossroads Holdings LLC and Risbara Bros. Construction

As the Scarborough Downs issues continue to be analyzed by the Town Council I would like to keep Scarborough residents up to date on events. Let me say at the outset that a tax-sharing agreement with Scarborough Downs is of enormous significance to the community. While we have been steadily working on this issue since our first workshop in February, I expect that we have no intention to alter the deliberative approach we are taking. That process, including further community education and input, will continue as long as necessary. For those residents that wish to learn more about these matters, we have created a web page on the town’s website (www.scarboroughmaine.org), for easy access.

On Wednesday, Sept. 5 the Town Council held a lengthy executive session with the Town Manager, Scarborough Economic Development Director Karen Martin, and Town Attorney. While much of the executive session is confidential, involving legal advice and bargaining strategy, there is information that I can provide everyone.

We had before us a recital of bargaining principles that reflect the consensus of the Town Council from the prior executive session. No vote was taken, but by councilors voicing opinions the Town Manager was able to identify principles that would guide our further evaluation of our options. This document is not deemed to be confidential and is now posted on the town’s website.

We also had before us a series of income and expense analyses projecting the long-term financial performance of different development scenarios predicated on either making an agreement with Scarborough Downs or no agreement being reached. These analyses were prepared by Karen Martin, the town’s economic development expert, who has considerable experience in development modeling and financial projections. It took her the better part of July and August to prepare and proof them. They are complex and involve both projecting patterns of development of Scarborough Downs, the income derived from increased taxes and the costs resulting from increased services. We are in the process of having an independent consultant with expertise in marketing projections evaluate these pro formas to assess their reliability. That work will be completed in the coming weeks and will be promptly reported out to the Town Council.

Based upon the preliminary profit projections that have been done, the consensus within the Town Council is that further analysis and validation is worth pursuing. The Town Manager also reviewed with the Town Council a framework for a proposal to be made to Scarborough Downs. It was recognized by the Town Council that further work on the specific details of the proposal was necessary but it was acknowledged that the framework was true to the Bargaining Principles.

Throughout this process, the Town Council also acknowledged that a Tax Incentive Financing (TIF) District may be appropriate for the Scarborough Downs property as well as the area around Oak Hill regardless of whether a tax agreement is reached with The Downs. It is expected that the Town Council will soon conduct further public workshops to advance the discussion around that topic and also deliberate further in executive session concerning a specific tax agreement proposal. There is no certainty that an agreement can be successfully negotiated, but in no case will it be finalized without a full explanation of its effect being given to the community. The potential opportunity is tremendous and we owe it to ourselves to make certain that we have properly explored all options for partnership.

The Town Council certainly appreciates that residents are anxious to learn the particular details of a tax arrangement. However, we believe it is important that proper due diligence is first done to ensure the integrity of the analysis and the appropriateness of the proposal. This will allow for meaningful input from residents.

I want to especially thank the community for its patience and trust.

Bill Donovan, chairman
Scarborough Town Council

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