SACO — The city is going to try to work with the developer of a proposed office building on Saco Island to pay the developer’s tax debt rather than foreclose.

In November, Saco Island East LLC, under the umbrella of Dirigo Capital Advisors, announced plans to build a four-story, 50,000-squarefoot commercial office building on the nearly 6-acre vacant lot on the east side of Main Street on Saco Island.

Saco Island East had a lien from the city for back taxes owed for fiscal year 2014. To avoid foreclosure, the back taxes and fees had to be paid to the city by Jan. 11.

TD Bank sent the city a check for more than $7,000 for back-owed taxes and associated fees on Jan. 6. The check was about $112 short of the money needed to pay the total needed to get out of foreclosure. The bank was notified and mailed a check for the remaining amount, which the city received Jan. 12, the day after the foreclosure date.

The city has not cashed the check, and Finance Director Cheryl Fournier is holding onto it until the City Council makes a decision on whether to claim the property or work with the developer so it can keep it.

The island is in the Saco River at the edge of downtown Saco, and overlooks downtown Biddeford. The west end houses several former mill buildings, some of which have been restored or are in the process of being restored for residential and commercial development.

The November announcement was the first news of a proposed development on the east side since a 2006 plan to build luxury townhouses and a private marina was abandoned during the recession.

Mayor Ron Michaud said at a City Council workshop Monday night that he had spoken with Severin Beliveau of Dirigo Capital Advisors, who said the company would pay the city $15,000 in taxes owed for last year and the current year .

Michaud said the issue is unfortunate, but it provides a good opportunity to start a better working relationship and “re-energize discussions” with Saco Island East.

Councilor William Doyle said he wanted to make sure the developer would be held accountable for its actions.

“What’s to stop this from happening again?” he asked. “If we look at history…”

Michaud said it’s been a difficult period for real estate development, and he believed in giving people a second chance.

“I believe in the long run, we’ll all be winners,” he said.

City Administrator Kevin Sutherland said in an interview Monday that in the past four years, Saco Island East has typically paid its tax bills 30 months late, in time to avoid foreclosure.

Sutherland said the city typically works with property owners and goes “above and beyond” to help them keep their properties, and he would like to see the proposed development on Saco Island move forward.

“I look at that island as the heart of these two cities,” he said.

Sutherland also said he would like to continue with recently begun monthly meetings with representatives from Saco Island East, and is hoping for a better partnership with the developers. In the past, Dirigo Capital Advisors worked with the city for an easement on the west side of the island for the RiverWalk project, he said.

“I’m willing to commit more of my time for building these relationships,” he said.

In an interview after Monday’s meeting, Saco Island East Director of Development Sam Zaitlin said the company plans to pay the city $15,000 next week. He said he appreciated the reaction of city officials, and he believes Saco Island East and the city can maintain a good working relationship.

“There’s no question there’s some history here,” said Zaitlin. “We will get past that.”

No vote on going through with a foreclosure of the Saco Island property has been scheduled, Councilor Kevin Roche said this morning.

— Staff Writer Liz Gotthelf can be contacted at 282-1535, ext. 325 or egotthelf@journaltribune.com.