The Portland, Maine City Council is considering proposed changes to its TIF Policy because of concerns over the number and size of two recent TIF Agreements – a $31 Million incentive for a sports complex and a $2.9 Million incentive to renovate a cold storage building for use by a law firm.
Maine law provides that a maximum of 75% of property tax increment can be pledged to a Developer for up to 30 years for eligible redevelopment costs including land acquisition, demolition, site work, equipment acquisition, professional services, infrastructure improvements, public safety improvements and job training. In addition to the State statutory requirements, current Portland TIF policy requires a TIF project to include a minimum $2 Million investment, to retain existing jobs, and to create long term employment opportunities in the long term.
The proposed changes to Portland’s TIF Policy include:
- Reducing the percentage of real estate taxes pledged to TIF projects from 75% to 50% except for certain projects that provide extraordinary public benefits;
- Shortening the term of TIF Agreements to 10-15 years from 30 years;
- Prioritizing certain industries such as manufacturing, life sciences and information technology when determining incentives;
- Prioritizing transit oriented development; and
- Focusing on affordable housing projects where at least one-third (1/3) of the housing units in a residential project are affordable to residents at or below 120% of area median income.
Portland’s first TIF District was created in 1994. Since then, the City has paid more than $18 Million in tax increment to various projects. Portland currently has 13 active TIF Districts. Based on current obligations set forth in existing TIF Agreements, the City anticipates that it will pay approximately $65 Million in additional tax increment to the projects in those TIF Districts.
The suggested TIF policy changes were introduced during a Portland City Council Meeting on August 22nd, 2012. They will be debated over a series of City Council meetings before being put to a vote.