The Saco City Council approved sections along Route 1 and in Camp Ellis for a new tax increment finance district that would benefit transit related projects. Courtesy image/City of Saco
SACO — The City Council in Saco has approved a plan to shelter new tax revenue derived from increased growth in a new trnsit-related Tax Increment Financing District for the next 30 years.
The vote was 6 to 1, with Councilor Nathan Johnston, who had expressed concern about the size of the new district, dissenting. He said while there are benefits to TIF districts — Saco has several — there could come a point where the city is challenged with meeting demands on the city’s general fund.
Called the Transit Oriented Omnibus TIF District, revenue from the sheltered district, which includes an area along the southern portion of Route 1 as well as part of Camp Ellis, will go towards an array of transit-related projects, including operating project costs, a downtown circulator service that is not operational today as well as expansion of an existing service down North Street to a proposed park and ride lot, and more.
According to the TIF document, the land at the Route 1 portion of the of the new TIF district is characterized by mixed use commercial areas with growth and development potential. The TIF district also includes part of Camp Ellis where transit service is currently offered.
Under the program, Saco will capture 100 percent of the taxes paid on increased assessed value. By creating the district, the city will “shelter” the increase in municipal valuation development would bring. The tax shift will mitigate the effect that increased assessed property value would have on the city’s share of state aid to education, municipal revenue sharing and the county tax assessment, according to the documents. The existing value of property in the district is $91.4 million. Total projected revenue from the TIF is $4.4 million over 30 years, based on the current $19.67 mil rate.
The new TIF district now moves to the state for approval.
Noting the concern about size, Saco Planning and Economic Development Director Denise Clavette said if there are parcels the city would want to remove at some point, it could do so.
“If we got 10 years out and if the TIF was full of cash, we could also turn off collecting it,” said Councilor Alan Minthorn, in part. “By capturing it early, we give ourselves maximum flexibility as these areas grow, and we do have the ability to turn it off.”
If the city were to decide at some point if it wants to abandon the TIF, it can do so, Clavette said.
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