Local
Developers for TIF extension
By Elizabeth Prata
Gray-Local developers Walter Hebold and Ron Marcotte
of M36 Associates approached the Community Economic
Development Committee (CEDC) a few months ago to request
that their Tax Increment Financing District be amended.
A TIF is a defined geographic area within the town
which, when development occurs and property values
increase as a result, the extra value is sheltered
from the school funding formula and stays local. The
money, though, must be funneled back into the defined
area of the TIF District.
There were two reasons that M36 made the request.
CEDC Chair Mike Alt said at the Monday council workshop
meeting that the TIF laws had changed. There was now
an opportunity for the developer to recapture development
costs inside the TIF over the life of the TIF, instead
of the first five years.
They also asked to extend the life of the TIF by ten
years, to 30 years total. The TIF would expire in
2027 if the request was approved.
There are two kinds of TIFs. One type is funded through
a development sinking fund, (a municipal bond) and
the other is funded through credit enhancement. The
M36 TIF is the second type, credit enhancement.
The developer pays taxes to the town and a portion
of the taxes go back to the developer to continue
further development, such as infrastructure improvements
inside the TIF District. The portion that goes back
to the developer are weighted toward the developer
the first few years of the life of the TIF plan, and
then slides gradually toward a weighted scale that
favors the Town over the course of time.
This is the seventh year of the Northbrook TIF, and
the company currently receives 65% of the revenues.
The scale decreases by 5% each year.
The TIF District is loosely defined as the 86 acre
NorthBrook Business Campus, accessed on Rt. 202 in
Gray.
When the Bypass project design was unveiled, it confirmed
what the developers had suspected for about four years,
that one of their front lots would be lost to the
Bypass construction and they would have to move about
a thousand feet of road to provide a new entrance
to the park. The ratio of costs is about eight to
one, said Mr. Marcotte. The DOT is paying only a small
portion of what it would cost the company to recover
the losses they incur due to the impacts of the Bypass
design.
Ralph Wink of the CEDC said that "The tax shift
is the major portion of the benefit to the town. It
is good for the developer, and good for the town.
The town can use the infrastructure with improvements
and the dollars stay local. It is win/win."
The Council took in the information and placed the
item on the agenda for the next regular Council meeting,
on Tuesday, April 19. The item must be placed on a
warrant for town meeting, since TIFs are voted upon
by the town as a whole.
Note:
The Monument Newspaper is a tenant of the two developers
mentioned in the article.
