Stable Ridge Apartments at 555 Court St. in Auburn will be discussed this month by the City Council. City staff prepared an application for a tax increment financing district, which must be approved by the City Council before going to the state Department of Economic and Community Development for final approval. Andree Kehn/Sun Journal
AUBURN — The City Council will decide later this month whether to approve a tax increment financing district for the Stable Ridge property at 555 Court St.
City staff prepared the application, which must be approved by the City Council before going to the state Department of Economic and Community Development for final approval. The state department oversees all municipal TIF districts.
Auburn’s director of business and community development, Glen Holmes, said Tuesday that it “made sense to create this tax increment financing district” for the Stable Ridge property.
“What that allows us to do is capture the difference,” in the assessed property value, he said.
That means that if over the course of the next 20 years — the period the TIF, also called a development district, would be in place — the assessed value of the taxable property of Stable Ridge increases, the city will be able to designate the tax revenues generated from that increase for specific development funds.
American Development Group is wrapping up the first phase of construction on the apartment complex, which includes a mix of 60, one- and two-bedroom units in five buildings. The apartments are expected to be fully occupied by April 1.
Last month, the Planning Board rejected a proposal from the developer to add a second phase of construction that would have doubled the number of apartments to 120.
City assessor Karen Scammon determined late last month that Stable Ridge’s current assessed property value is $235,500. If, for example, the assessed property value increases to $1 million at some point in the next 20 years, the tax revenues collected on the original $235,500 would go toward the general fund. But 100% of tax revenues generated on the difference of the new assessed value and the original — which in this case would be $764,500 — would go to specific development funds identified in the approved development district plan.
Holmes said that because the application writing process was in the works before the Planning Board decision, the second phase is included in the application. He said it makes no difference to the final application because projected future value of the property is an estimate and nonbinding.
The application includes that, at most, 15% of the funds generated from the development district would go toward the construction or operation of a public safety facility, according to the application. Another significant amount would go toward road improvements for areas in or around the Stable Ridge property. The remainder of the money would go toward administrative costs associated with the district and costs related to economic development programs.
“All that work would need to be done at some point in the future, which all of the taxpayers across the entire city would pay,” Holmes said.
“We’re simply saying, ‘let’s capture this value, to do this in this area, because that’s where that value is being created.’”
Another benefit is that a development district is “a shelter of the (increased) value to protect the city’s coffers,” Mayor Jason Levesque said Monday night.
“Because the increased assessed value of the property would not be reflected in the city’s valuation or general fund, the development district will mitigate the adverse effect that the district’s increased assessed property value would have on the city’s share of state aid to education, municipal revenue sharing and its county tax assessment,” according to the application.
Holmes said Tuesday that there is a proposed credit enhancement agreement included in the application, which returns some of the tax revenues to the developer but the City Council will not consider or vote on that particular provision.
Holmes said he included it because there were “some extraordinary expenses that the developer incurred that could be considered above and beyond what would be normal” that would qualify for this type of agreement. And because the state does not allow municipalities to change what is included in a development district after it has been approved, that information had to be in the application if the council wants to consider an agreement in the future.
The next public hearing on the development district will be held during the City Council meeting March 20. The council is expected to vote on whether to approve the application immediately following.
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