GORHAM —The Town Council unanimously approved a Tax Increment Financing District for the Harvey Performance Company project at the Aug. 6 meeting.

The company is building a new precision tool-making plant on a 13-acre site off Narragansett Street, (Route 202), on property that formally contained the Gorham Raceway. The project was approved by the Planning Board June 3 and site work now is underway.

The project will be built in two phases. Phase 1 will include a 76,887-square-foot, single-story 25-foot-high building and 172 parking spaces. Phase 2 will be a 36,000-square foot addition with 115 parking spaces.

Tom Ellsworth, the town’s economic development director, said the TIF for the Harvey project was being filed with the state Wednesday.

The first phase of the two-phase project is projected to cost $11 million. Under terms of the 20-year TIF, 55% of the tax revenue from incremental value would be returned to the property owner, 49 Raceway Drive, LLC, to develop the site for Harvey, and 45% of taxes would be retained by the town for various public improvements.

The timeline for the phased project and details about the total cost were not available by the American Journal’s deadline Wednesday.

“The advantage of placing a new large value property into a TIF is that the new value is not held against the municipality for calculation of county taxes, school funding and state revenue sharing and rather sheltered from these formulas,” Town Manager Ephrem Paraschak said in an email.

“For the Harvey TIF, the program is expected to save the taxpayers over $2.1 million over the first 20 years, while at the same time dedicating the new property tax the town will receive for future economic growth.”

Harvey, which manufactures precision tools, is based in Rowley,Massachusetts, and owns Helical Solutions in the Gorham Industrial Park. Helical Solutions has run out of space in its plant, according to company representatives. It has 80 employees and company officials have said 150 jobs would be added in the next few years at the new plant.

“Needless to say the town is very excited to have Harvey Performance commit to staying in Gorham with a new facility,” Paraschak said.