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PORTLAND — Developers planning to build a mixed-use project on Thompson’s Point are on track to receive a nearly $31.5 million tax break over the next 30 years.
But some City Councilors raised concerns Monday, not about whether to give the company the break, but about their own commitment to investing in public transportation.
The Thompson’s Point Development Co., led by two owners of the Maine Red Claws basketball team and a Lewiston-based real estate investor, are seeking the tax break to help offset the costs of building a 700-space parking garage and improving the Amtrak Downeaster crossing on the property.
The City Council held a workshop and special meeting to discuss a tax increment financing agreement with the company. It conducted a first reading of the TIF on Monday, clearing the way for a vote on June 20.
Jon Jennings, a Thompson’s Point Development Co. managing partner who is also president and part owner of the Red Claws, said the project has an aggressive schedule and the city’s cooperation is needed to move the project forward.
“When you’re talking about a $100 million real estate development, the window opens and then it closes,” Jennings said. “The economy, construction costs, any member of our investment group – any number of things could impact if we extended this out for a long period of time.”
Jennings touted the public benefits of the project, which would include a new arena for the Red Claws, a medium-sized concert hall, a hotel, restaurants and office space.
He said an economic impact analysis predicts the project would result in $169 million in one-time economic activity during construction, including $49 million in wages for more than 1,200 people.
Once complete, potentially by winter 2013, the development could result in $31 million in annual sales and support $11 million a year in wages for about 450 employees, he said.
City Economic Development Director Greg Mitchell said the city would also receive financial benefits from the TIF, including drawing more visitors to the region for conventions, athletic events and concerts.
The city would still receive about $26.4 million in taxes over the next 30 years. Three percent of those funds, or $1.7 million, would be set aside for investments in public transit.
Creating the TIF would also protect state education funding and revenue sharing agreements, which decrease as property values increase. Michell said that benefit equates to about $12.2 million over the 30-year term.
Mitchell said some of the city’s portion of the TIF money would be used to plan for investments in public transit.
But several councilors wondered whether that set-aside was enough to make a dent in transit projects, including increasing bus schedules and making bicycle and pedestrian improvements along outer Congress Street.
“This dollar figure is fairly puny compared to the demand,” Councilor Edward Suslovic said.
Councilor David Marshall said he plans to amend the TIF to increase the transit set-aside. The proposed 3 percent funding level would not increase bus runs adequately to connect the point to other parts of the city, he said.
Councilor Kevin Donoghue, meanwhile, said he is concerned the council will not stick to the original intent of the TIF. He said similar accounts in the past have been tapped to supplement the general fund and reduce property taxes.
“I’m wary, because the city has a history of adopting purposeful TIF districts, but not funding the purpose,” Donoghue said. “I’m concerned this could easily tip down to zero, when it could – and probably should – tip up to a higher percentage.”
The council must also decide whether to set a firm cap on the tax benefit the developers receive. Mitchell estimated that two of the city’s 12 TIF districts currently have such caps.
Chris Thompson, who is also a Thompson’s Point Development Co. managing partner, said the group would rather stick to the percentages outlined in the current plan, than capping it at a specific dollar amount.
“To cap it at a number I think creates almost a disincentive to be able to work hard ourselves and work with our users to find ways to add value,” Thompson said.
A neighborhood meeting about development has been scheduled for Tuesday, June 21, at 6 p.m., in the Renaissance A meeting room at the Clarion Hotel, 1230 Congress St.