2014-06-06 / Community

Board OKs TIF district; ready for residents

Public hearing is set for Wednesday, June 11
By Alex Acquisto
Staff Writer

ARUNDEL — The Arundel Board of Selectmen approved the town’s application to establish the Arundel Kennebunkport Seasonal Cottages 25- year tax increment financing district last week.

The measure requires citizen approval; a public hearing will be held Wednesday, June 11.

The town has been working since last year to establish the seasonal cottage TIF district, which would reportedly benefit the town by “expanding the tax base of the town, (and) ... increasing employment opportunities, private investment, and further providing economic development activities that will facilitate additional commercial development,” according to the town’s application.

The proposed location of the TIF district is approximately 195 acres in the Business Industrial District Zone between Route 1 and Mountain Road in Arundel. REM Development, the Massachusetts-based development team headed by Joe Paolini, intends to construct 260 seasonal cottages during the next seven to 10 years, “to support the tourist industry,” reads the application.

The units will average 850 to 1,350 square feet.

The estimated value of each cottage is $220,000. The estimated cost of construction for the 260 units is $54,390,000.

A 9.2-acre parcel reserved for commercial business or retail space would front the seasonal cottages campus.

Paolini told the board in November that, in addition to the housing units, the commercial and retail space, and amenities around the units, a community center and a pool with a waterfall, the acreage would house multiple walking trails with direct access to the Eastern Trail, as well as an untouched bit of land that would remain preserved.

“We’re only developing about 100 acres of the parcel; the rest will stay green,” Paolini said in November.

In a recent letter to residents, Paolini wrote, “Approval of the TIF would result in major benefits to the town of Arundel by creating a new private investment, new tax base, and new employment that would otherwise not occur.

“An estimated $10 million in revenues will be generated to the town during a 25-year period: $5 million to the town’s general fund, and $5 million to the town for use in infrastructure and economic development.”

According to proponents of the plan, the TIF district would help Arundel because funds generated from the TIF and subsequently allocated into the municipality’s general fund would help the town address infrastructure issues, such as the installation of a sanitary sewer system along Route 1, or an economic development marketing program.

In March, Town Manager Todd Shea told the board, “In the 25-year TIF, rather than $10 million going to the business project account and $10 million going into our economic development account .... it would give $10 million to the developer, $5 million to our infrastructure projects, and it would give $5 million back to the general fund,” Shea said. “So it would actually be like we were receiving a quarter of the tax revenue and from that district would be going back to the general fund to reduce the mil rate.”

The application also states, “If within a certain period of time (approximately five years) the Developer’s project has not produced a substantial amount of increased assessed value, the credit enhancement agreement will terminate automatically.”

“What that says is, within approximately five years if they’re (REM Development) not on schedule as they’ve been indicating to us, this TIF will automatically dissolve, the credit enhancement portion of the TIF will dissolve,” Shea said at the May 27 meeting. “The town will still be able to use for economic development any revenues that we brought into the captured revenue account for the town; but the monies that go back to the developer will no longer go back to the developer.”

Selectmen Dan Dubois inquired about the word, “substantial,” and Shea assured that the board would, at a later date if approved by the town, determine what substantial means.

“The board of selectmen has the authority to negotiate that credit enhancement agreement, so if this passes to move forward, the Selectmen will come up with what’s acceptable in this TIF project ... I didn’t think it would be feasible to spend the $6,000 to $10,000 to negotiate a credit enhancement agreement if this was going to fail at town meeting,” Shea said.

In the closing paragraph of his letter, Paolini assured residents, “We are committed to making this a high-quality project the town can be proud of, creating new investment, jobs and revenues. We are also committed to local contracting for construction and related service and being a good business member of this community.”

Residents can vote at the open town meeting at 6 p.m. Wednesday, June 11.

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