AUBURN — Councilors had no interest Monday in expanding a tax incentive program for a southern Auburn industrial park.
Councilors will vote Dec. 15 on plans to create a Tax Increment Finance District for Hartt Transportation System’s $5.3 million facility with office space, a maintenance facility and an automated commercial truck wash and the surrounding park off Kittyhawk Avenue.
The tax incentive will return 40 percent of the new property taxes Hartt pays to help finance road and utility work on the site.
Councilors had the option of expanding that TIF, setting aside more property tax revenue to pay for improvements to Kittyhawk Avenue, fund Auburn’s economic development program, create a revolving loan program for other businesses, purchase equipment for transit services and create a skills training program.
But they said no.
“One of our long-term goals has been to grow our tax base,” Councilor Tizz Crowley said. “We are looking for revenue in our general fund today to help protect taxpayers and to provide some stabilizing forces so we can forecast the next 10 years. So I’m not interested in one penny beyond our commitment to Hartt.”
TIF districts allow cities to hide new developments from the state’s property valuations. State valuations determine how much aid to the schools and revenue sharing a community can get: Higher property values mean a city gets less help from the state.
When a city creates a TIF district, it sets a baseline value on all property within the district’s borders. Property owners continue to pay property taxes on that baseline value.
Taxes based on the new, or incremental, construction can be given back to the developer as an incentive or can be put into a special city account and earmarked for certain purposes, such as economic development. Councilors decide how much of that incremental tax revenue is set aside and how it can be used when they first create the TIF district.
Hartt Transportation System’s project includes $1.2 million in new roads in the Kitty Hawk Business Park, including work extending utilities, high speed fiber-optic Internet service and the paved portion of First Flight Drive. Work on that development began in August.
According to the TIF agreement, Hartt would continue to pay all taxes on the current $1.2 million value of the land. The first 40 percent of new taxes paid would go back to Hartt to pay for extending the utilities and other site work.
Councilors agreed to create that tax incentive when they signed the development agreement with Hartt earlier this year, and councilors said they were willing to fulfill that part of the agreement.
Expanding the TIF to rebate all of the taxes Hartt pays was out of the question.
“I have some concerns about the 100 percent capture,” Councilor Mary LaFontaine said. “It’s more than I am willing to support. But I do believe we should move this forward, and I think the discussion tonight should be about what percent we can support.”
But councilors turned down a similar tax incentive package for the the 99-acre Auburn Enterprise Industrial Park, the Auburn Business Development Corporation’s development along Lewiston Junction Road, Foster Road and Cascades Drive.
Mayor Jonathan LaBonte urged councilors to delay discussions on that industrial park until John Holden, the new director of the Lewiston-Auburn Economic Growth Council, assumes the position. The Auburn Business Development Corporation is part of the growth council.
“I think it’s time to have a very open discussion with the (Auburn Business Development Corporation) about their relationship with the city and what our partnership will be going forward,” LaBonte said. “The city has already committed $5 million with the understanding that the taxes paid with the general fund would be enough to pay the debt on that. So the thought that we would provide a credit enhancement goes back on that promise to taxpayers.”
Holden is scheduled to take over the job full time after Jan. 1.
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