PORTLAND — The developers of The Forefront, a proposed office-arena-convention center at Thompson’s Point, are seeking a property tax break from the city that could be worth more than $31 million over three decades.

The proposed tax increment financing district would return more than half the property taxes generated by the new project to the developers to cover what one principal called “extraordinary costs” due to the marine clay on the small peninsula.

“They call it blue goo,” said Jon Jennings, one of the managing partners of the $100 million development, describing the soil that would require developers to drive pilings to support buildings, pushing up the cost of construction.

Jennings said the developers aren’t seeking any city-backed bonds or direct investment of public money. The TIF returns to owners a portion of the property taxes they’d pay in excess of taxes that would be generated if the project wasn’t going on Thompson’s Point.

Without development, the city estimates the property would generate less than $3 million in taxes over 30 years. With The Forefront increasing the property’s value, the city projects it would generate more than $57.8 million in taxes in that time.

The developer’s share would follow a sliding scale that starts at 75 percent of the property tax revenue during the first 10 years and drops to 40 percent by the final decade, averaging out to 54 percent over the life of the deal. The city would get an estimated $26.4 million in property taxes over the period under the proposal, which is being reviewed by a city committee today.

The Forefront plan includes a hotel, office buildings, a music hall, a 700-car parking garage and a convention center/arena for the Maine Red Claws pro basketball team. Many of the team’s owners are investors in the project.

Thompson’s Point is dotted with small buildings, but the developers say it’s a prime spot because it’s a gateway to Portland, with I-295 next to it and the Portland Transportation Center rail and bus station on adjacent land.

Jennings said that in addition to the pilings, the developers will have to upgrade a rail crossing at a cost estimated at more than $1 million. He also said the parking garage will provide overflow parking for people taking the train or buses and the developers envision a public walking and biking trail on the perimeter of the peninsula.

“We will turn what’s currently an eyesore into a jewel,” Jennings said.

Greg Mitchell, Portland’s economic development director, said the TIF has to be justified by public benefits, and The Forefront fulfills that requirement.

Benefits include the parking garage, infrastructure improvements and possible upgrades in public transit connections paid for by the city’s share of the property tax increase. Construction would generate an estimated 1,230 jobs and The Forefront would support about 400 jobs once it opens, he said.

“It makes total sense for us to have a public-private partnership because of the significance of the project,” said Councilor Cheryl Leeman, who chairs the Community Development Committee. The panel is expected to vote on the TIF proposal Wednesday afternoon and forward it to the City Council.

Leeman said it’s premature to talk about how much of the city’s tax revenue might go to transit, but she noted the city might want to upgrade the transportation center at some point.

She also said she hasn’t heard opposition to the TIF from other councilors.

Jennings said developers expect to take their proposal to the city Planning Board in the next month or so and are on track to get the approvals they need before the end of the year, with construction expected to start next spring.

 

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at: [email protected]