L.L. Bean’s corporate headquarters in Freeport in January. Ben McCanna/Portland Press Herald

FREEPORT— A new agreement between the town of Freeport and L.L. Bean will give the company a nearly $10 million tax break as it moves forward with a $110 million expansion of its Freeport headquarters. The project would generate roughly $25 million in new tax revenue for the town over the next 30 years and launch plans to help clean up a polluted stream in town. 

Tuesday, the town council established a new tax increment financing agreement to help offset L.L. Bean’s future property tax costs over the next 30 years.

The agreement is “in every sense, a mutually beneficial partnership,” Keith McBride, head of the Freeport Economic Development Corporation told the council. 

Tax increment financing (TIF) is a funding tool used by municipalities to pay for public projects. The new revenue generated by increased taxable value is set aside for specific purposes that will help spur economic development or is given back to the developer as a property tax break. 

In this case, the project is expected to increase the property’s assessed value by more than $31 million, generating more than $25 million in property tax revenue.  Of that, roughly $8.4 million will go toward town projects, and $7.3 million to the general fund. About $9.6 million will be available for L.L. Bean. 

In exchange for the tax incentive, L.L. Bean officials will help clean up Concord Gully Brook, which the Maine Department of Environmental Protection has categorized as an “urban impaired stream.” Cleaning up the stream has been a town priority for years, McBride said. It does not meet water quality standards for aquatic life or dissolved oxygen and has elevated bacteria levels, as well as “sever embankment erosion” caused by extensive runoff, according to the town.

According to McBride, the retailer’s plans for stream rehabilitation go “above and beyond” the DEP minimum requirements. 

Among other proposed benefits, L.L. Bean officials also granted the town an easement for the construction of a multi-use trail from West Street to Pine Street, something the captured tax revenue can help pay for and is, according to McBride, one of the pieces the community has been the most excited about. 

Most town councilors agreed with councilor Doug Reighley that approving the tax district was “an easy decision to make,” but others still had reservations. 

Councilor Eric Horne, who voted against the motion, said he supported the concept but struggled with the amount of money that L.L. Bean got back through the credit enhancement agreement, the $9.6 million. He would have liked to see something smaller, he said. 

Councilor Dan Piltch agreed. 

The scale, he said, is “a lot to swallow for a town this small.” 

He also said he was concerned that the project did not fully take care of the problems at Concord Gully Brook, despite essentially spending 10 times more on its restoration than they have been. 

“If it were a few months ago or a year from now it would be a lot easier to talk about,” he said, adding that the coming months are likely going to be difficult for everyone with the expected economic downturn from the coronavirus pandemic. He worries about “having to face constituents who are seeing their taxes go up,” he said.

Councilor Tawni Whitney said she was a fan of the project from the get-go, and given the financial situation and the fact that L.L. Bean’s stores have been closed for more than a month, she was “thankful there’s even a deal to consider.” 

“I don’t want to stare a gift horse in the mouth right now,” she said. 

Councilor Sarah Tracy supported the move, calling it a “no brainer” for the town, especially given the project’s symbolism as L.L. Bean’s long term commitment to Freeport, but said she wanted more flexibility on how to spend some of the captured revenue. The council is scheduled to discuss the issue next week. 

Overall, it is a “smart and strategic move for our town,” she said. 

L.L. Bean is the town’s biggest taxpayer, paying roughly $2.8 million per year in property taxes, according to the Portland Press Herald. The company’s headquarters, warehouse and delivery center, retail stores and other facilities are worth almost $193 million. 

The town values the company’s current headquarters at about $32.7 million. 

The company initially considered relocating out of Freeport but decided last year to stay in town and renovate the 50-year-old offices, which according to town documents, were designed and built as a shoe factory and warehouse. 

“As our current facilities are nearing the end of their useful lives, L.L. Bean will need state-of-the-art facilities to support the business, including the 2,000 talented and dedicated people employed in Freeport,” spokesperson Carolyn Beem said in an email. 

“We have been working closely on this project with the Town of Freeport for many months and are thankful for their partnership and the successful conclusion.  Despite the current economic challenges, we remain firmly committed to renovating our corporate headquarters in Freeport, home to L.L.Bean since 1912. “

The retailer’s plans include the development of a 400,000-square-foot office complex on the site of the company’s existing headquarters and the construction of a roughly 900-seat conference and events center that the town will also have access to for community events.

The three-phase plan is scheduled to be completed by 2024, and work on the conference center and a rebuild of the interior workspaces is already underway, Beem said.