SACO — A company with plans for a large scale development on Saco Island has avoided foreclosure by paying its tax bill to the city.

Operating under the umbrella of Dirigo Capital Advisors, Saco Island East LLC announced in November plans to develop the nearly 6-acre vacant parcel of Saco Island that lies east of Main Street and build a 50,000-square foot commercial office building on the site.

The company had a lien from the city for back taxes owed for fiscal year 2014. To avoid foreclosure, those taxes had to be paid to the city by Jan. 11.

TD Bank sent the city a check for more than $7,000 for back taxes and associated fees on Jan. 6, which was about $112 short of the total needed for Saco Island East to avoid foreclosure. The bank was notified and mailed a check for the remaining $112, which the city received on Jan. 12, a day after the foreclosure deadline.

Since then, city officials have met with representatives from Dirigo Capital Advisors, and the matter was discussed at a Feb. 8 City Council workshop.

The city has received an additional check for $32,000, said City Administrator Kevin Sutherland in a phone interview Wednesday. This means that Dirigo Capital Advisors has not only paid the $112 needed to get the Saco Island East property out of foreclosure, it has also paid taxes owed for the last fiscal year and the current year on Saco Island East as well as for properties it owns on the west side.

Saco Island East has also agreed to meet with city officials on a regular basis to resolve any concerns. On Tuesday, the City Council voted unanimously to accept the payment of taxes.

“We’re pleased with the city’s decision,” said Sam Zaitlin, spokesman for Saco Island East, on Wednesday.

Sutherland said the matter brought “all parties to the table” for more open communication.

“Sometimes it takes these little things to get us talking together again,” said Mayor Ron Michaud at Tuesday night’s City Council meeting. “We’re back on an even keel. Let’s move forward together.”

The parties also came to agreement regarding the payment of a new sewer pump station, which Dirigo Capital Advisors agreed to replace in 2007. Since then, it has sold part of the island property, and development plans have changed.

Sutherland said Dirgo Capital Advisors has agreed to pay $40,000 of the $60,000 cost to replace the sewer pump.

Saco Island is situated in the Saco River, and overlooks downtown Biddeford. The west side of the island is home to a former mill complex, some of which has been restored for commercial and residential use, and some of which is in the process of restoration.

The November announcement was the first news of any planned construction on the east side of the island since a 2006 plan to build upscale townhouses and a private marina was abandoned after a decline in the economy and real estate market.

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