South Portland officials suspected since spring that Portland was working to recruit Wright Express to move across the Fore River, despite a formal agreement discouraging the cities from trying to steal each other’s businesses.
Portland officials said the city has not been actively recruiting the credit-card processing company, which employs more than 600 people in South Portland. Nevertheless, South Portland officials have been looking for ways to keep the company in their city. One idea being discussed is amending the tax break that benefits Wright Express.
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Wright Express confirmed last month that it is considering moving its headquarters. It hired a Realtor from Boston to assist with the search and said it was optimistic that existing and new facilities in the Portland area would enable the growing company to stay in Maine.
According to government and real estate officials, one possible destination is The Forefront at Thompson’s Point, a $105 million mixed-use development off Interstate 295 in Portland. Construction is expected to start next year on offices, restaurants and an event center that would be the new home of the Maine Red Claws basketball team.
A review of a year’s worth of emails obtained through a Freedom of Access Act request by the Portland Press Herald reveals that South Portland officials were surprised by Wright Express’ decision to look for alternative locations and suspected that Portland was recruiting the company.
A formal agreement among Portland, South Portland, Westbrook, Falmouth, Cape Elizabeth and Scarborough — a group known as the Greater Portland Economic Development Corp. — seeks to market the region to out-of-state businesses and discourages each community from recruiting any business that is established in one of the others.
South Portland City Councilor Gerald “Jerry” Jalbert said in an email Sept. 27 that Wright Express was looking at Thompson’s Point and a location in Scarborough.
“It’s no secret the folks over at Thompson’s Point have been trying to get Wright Express to move,” Jalbert said the morning before the Press Herald published a story about the company exploring options for a new headquarters.
In May, South Portland City Manager James Gailey asked Economic Development Director Erik Carson to draft a letter to Wright Express to open negotiations. Gailey speculated on May 1 that the “Mayor of Portland is running wild with this one,” and South Portland was looking to “turn up the heat.”
“I suspect you’re right,” replied Carson, who resigned in August. “But that doesn’t excuse the attempted grab.”
When asked about Wright Express two weeks ago, Portland Mayor Michael Brennan said he was not involved in any “direct” discussions to bring the company to Thompson’s Point and declined to say whether he had heard the company was looking to move.
Brennan said Monday that South Portland’s suspicions weren’t based in fact. He said he has not held any discussions about Wright Express moving to Portland — not with the company, the Thompson’s Point developers or anyone connected to the two.
“It was just speculation,” Brennan said.
Gailey sent letters May 3 to Wright Express Chief Operating Officer Michael Dubyak, who is an investor in the Maine Red Claws, and the company’s North America President Melissa D. Smith. Gailey touted amenities in South Portland — its growing network of trails, its proximity to the Portland International Jetport and the Maine Mall area — and sought a meeting to discuss the company’s needs.
Gailey suggested in an email that the city could give Wright Express employees free access to the city-owned Redbank gym and locker room during their lunch breaks.
Discussions in South Portland pivoted in late August to the tax increment financing district that reimburses a portion of the property taxes to the company that owns the Wright Express building.
Wright Express — a company with a stock market value of $2.7 billion and 900 employees, 622 of them in Maine — has benefited from the 15-year TIF package approved in 2001 and scheduled to end June 30, 2016.
Through June 30 of this year, South Portland had collected $1.8 million in taxes from Wright Express and returned $862,872 to the company.
Wright Express leases its offices in the Long Creek Office Park in South Portland from the Bramlie Corp. Bramlie Corp. Manager Brian Goldberg could not be reached Monday.
Ten emails were sent over three days in late August among South Portland Mayor Patti Smith, city officials, their outside TIF attorney and Bramlie Corp. about the tax break. The city withheld those emails from the Press Herald’s Freedom of Access request, citing confidentiality for economic development and attorney-client privilege.
Mayor Smith said last week that she hadn’t heard that Wright Express was considering a move before she read it in the newspaper on Sept. 28. Smith did not return a call seeking clarification Monday.
Frank O’Connor, a commercial real estate agent with The Dunham Group who is marketing an office building to be built at the Long Creek Office Park, was included in those emails that were withheld. The Dunham Group has produced a real estate brochure for the building that promotes the TIF as a way of lowering operating costs by reducing the tenant’s taxes.
“There is potential for (the) TIF to be expanded,” the brochure says.
The emails that were provided show that South Portland explored the idea of expanding the tax break.
In August, Bernstein Shur, the Portland law firm that handles South Portland’s TIF program and represents Bramlie, informed the city of that potential conflict of interest.
According to its letter, the firm said Gailey had requested its assistance with a potential amendment to the Long Creek TIF agreement, which encompasses the Wright Express property.
South Portland officials were not available Monday, because it was a holiday, but they have previously declined to say whether there were discussions about renewing or expanding the TIF agreement. State law allows for a maximum tax break of 30 years.
The Portland City Council has already approved a 30-year TIF agreement for Thompson’s Point that is expected to return roughly $30 million in property taxes to the developers while setting aside $14.5 million for the city to invest in public transportation.
Staff Writer Randy Billings can be contacted at 791-6346 or at:
rbillings@mainetoday.com
Twitter: @randybillings
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