TOPSHAM

The Board of Selectmen unanimously supported the idea of creating a municipal tax increment financing district for downtown.

By a 5-0 vote Thursday, it authorized town staff to select a consultant at a cost not to exceed $20,000.

John Shattuck, the town’s economic and community development director, said the municipal downtown tax increment financing district would include most of Main Street.

Selectmen were supportive of the two-phase process he proposed. First, the town will assess the boundaries of the proposed district. Then it will assess whether funds generated by the TIF would meet the town’s needs prior to creating a TIF agreement.

A five- or six-month process is envisioned, with an extensive public input process culminating in a public hearing. The proposal would go to a vote at a special town meeting in October or be placed on the ballot in November.

A tax-increment financing district is a locally approved plan that allows municipalities to earmark property taxes for economic development or other specific municipal uses. When new commercial development happens, a town can set aside the new taxes generated by the increase in valuation on the property and shelter it from county taxes and from the valuation formula for state aid to education.

Shattuck noted the town has seven TIFs that converted approximately $12 million in original assessed value to about $200 million, “so they work very well for the town’s benefit.”

The town has been discussing for perhaps 20 years the development of a Lower Village park. The property owner recently indicated an interest in working with the town to create such a park, Shattuck said.

Simultaneously, in September 2012, the “triangle” portion of the former Navy Annex was conveyed to the Midcoast Regional Redevelopment Authority, Shattuck told selectmen.

Shattuck said the MRRA board recently endorsed negotiating a contract with J. Hilary Rockett Jr., the developer who built Brunswick Station, to develop the commissary within the triangle with perhaps an option to purchase the property.

MRRA is now in a 90-day exclusive negotiation period with Rockett, Shattuck said.

Shattuck said it’s become difficult to fund various projects, such as traffic improvements in the Lower Village, “so what we looked at was the potential capturing value of places like the annex triangle and other parcels along the corridor” with a TIF.

Such improvements could include paving on Main, Green and portions of Elm streets, a Lower Village waterfront park, bike path and trails, sidewalks and street lighting, as well as funding economic development reserves.

Selectman Don Russell said the municipal TIF is the best kind of TIF, “because we get the tax dollars — 100 percent of those. Those tax dollars can go into a specialized fund that is designated for economic development from which we can pay some of the regular operating bills in the town, as long as it contributes to that TIF.

“That’s basically why that type of TIF is great for up Main Street and the areas they are talking about.

“Not that we’ve got anything coming in down there,” Russell said. “That’s probably the best part, is that you can have the discussion of TIFs without focusing on an individual or a company.”

Selectman David Douglass said it seems the TIF proposal has “come out of the blue.”

Russell countered by saying, “It’s something that’s going to happen as we go along, when we start getting projects out there at the annex taking place based on MRRA, we’re going to be looking at TIFs and different types of TIFs; I know that’s going to happen.

“It’s just common sense that it’s going to happen and if this district is put in place prior to that, then we’ve got a little firmer ground and better understanding of what’s going on.”

Selectman James Trusiani said the town should take a first step to evaluate the feasibility of the TIF, then conduct a public process. “Then we can make a definite (decision of) yes or no, to go forward,” he said.

Russell said, “I think it is imperative that we start concentrating on economic development in this town, because it’s quite evident that the state is not going to be our partner much longer, and we just can’t ask the residents of this town to be paying 70 percent of the tax base.”

Shattuck said the TIF consultant will be paid with money in the current budget from the professional contracting account; his department’s business retention, expansion and attraction account; and existing municipal TIF economic development reserves.

dmoore@timesrecord.com