Strimling renews effort to tighten Portland TIF rules

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PORTLAND — Mayor Ethan Strimling has renewed his effort to change the city’s tax increment financing policies with a list of amendments presented Tuesday to city councilors.

“If we are going to provide tax breaks for corporations, we ought to ensure that the projects provide more of a benefit to our community,” Strimling said in an April 14 press release that preceded Tuesday’s public hearing by the council Economic Development Committee.

Under his proposals, companies or nonprofits with credit enhancement agreements that return a portion of the increased tax valuation would be required to pay prevailing wages as measured by the state Department of Labor; fill 25 percent of working hours with city residents, veterans, minorities or women, and offer apprenticeship programs.

The new regulations would apply to the construction phase of TIF-funded projects. Strimling also proposes to have the city terminate agreements where the requirements are not met, or to reward companies that exceed the requirements with up to 2.5 percent of the TIF total.

Under a tax increment finance agreement, money is set aside from increased property valuations either for municipal projects, such as sidewalk or street improvements, or are partially returned as financial assistance for construction or operations.

Strimling first introduced the amendments in August 2016, when councilors deliberated a TIF and credit enhancement agreement that would return $374,000 to Immucell over 12 years.

The biotech company sought the TIF and credit agreement to help finance a $17.5 million expansion near Riverside Street. Immucell will recapture 65 percent of the increased tax valuations in the credit enhancement agreement, while the city will see new tax revenues of $231,000.

Strimling announced the amendments following the first reading of the Immucell TIF, but they were not part of the Economic Development Committee deliberations before the committee recommended councilors OK the agreements.

Councilor David Brenerman, chairman of the committee, objected to the amendments coming late in the process, although Strimling said he first mentioned changes to TIF policy in January 2016.

The council vote on the TIF and credit agreement was postponed, and the amendments were never introduced by Strimling. Instead, he and Brenerman agreed the committee would consider the amendments at a future date without tying them to any potential agreement.

The Economic Development Committee is now staffed by Councilors Pious Ali and Spencer Thibodeau. In the April 14 press release, Ali said he supports amending TIF rules, which have not been changed since 2013.

“I am particularly interested in the provision that requires a company that receives a tax break to hire local people, in particular women, minorities, and veterans,” Ali said. “These are underserved populations in Portland and this will be an invaluable tool in helping alleviate the poverty that has held these populations back for decades.”

The Immucell TIF was the only one granted by the City Council in 2016. Company President and CEO Michael Brigham said in August 2016 that the 12,600-square-foot building to be built on Caddie Lane would create 13 new jobs with pay ranging from $63,000 to $105,000.

Prior to the Immucell TIF, the last one approved by councilors went to Avesta Housing in August 2015 for development at 17 Carleton St. The 22-year TIF and credit enhancement agreement will return $700,000 to the nonprofit to help operate the 37 units of affordable housing now under construction in the city’s West End.

In 2014, the City Council approved a TIF and credit enhancement agreement with Avesta that returned more than $200,000 to help operate Thomas Heights, an 18-unit affordable housing project for veterans at 134 Washington Ave.

David Harry can be reached at 781-3661 ext. 110 or dharry@theforecaster.net. Follow him on Twitter: @DavidHarry8.

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Portland City Hall reporter for The Forecaster. Baltimore native, lived in Maine since 1989. A journalist since 2005, covering much of Cumberland and York counties. I joined The Forecaster in 2012.