PORTLAND – A City Council committee endorsed a $31 million tax break Wednesday for the developers of The Forefront at Thompson’s Point, but not without a ripple of controversy.

Councilor John Anton went along with a unanimous vote to approve the tax increment financing district, the framework of which would allow the developers to recapture more than half of the money they would pay in property taxes in the next three decades. But he voted against a separate document, known as a credit enhancement agreement, that is essentially the formula used to determine how the city and developer divvy up annual property taxes on the proposed $100 million project.

The CEA still passed on a 2-1 vote, supported by councilors Cheryl Leeman and Dory Waxman.

The tax break would allow the developers to get back $31.4 million of the nearly $58 million in property taxes they’re expected to pay in the next 30 years. Of the $26.4 million that the city would keep, the committee voted to set aside 3 percent for unspecified transportation projects because the TIF is set up as a “transit-oriented development.”

Thompson’s Point is adjacent to Interstate 295 and the Portland Transportation Center rail and bus station. It is about three-quarters of a mile across the Fore River from the main runway at the Portland International Jetport.

Anton said he voted against the credit enhancement agreement because he objected to a lawyer for the developers telling the committee that the city needs to act on the TIF and CEA by the end of June to keep the momentum for the project going.

Anton also said Portland lacks a strategy for marketing developable property that it owns as The Forefront moves ahead with a proposed 180,000 square feet of new office space, a hotel, convention center/arena, music hall and 700-car parking garage.

With office vacancies in Portland at about 12 percent, Anton said, adding new space to the market would make it harder for the city to interest developers in its land, including property on the eastern waterfront.

Joan Fortin, the developers’ lawyer, said approving the TIF and CEA by the end of the month signals to investors and potential tenants of the buildings that the project is moving forward. Either or both could get cold feet, she said, if there are signs The Forefront isn’t on track to get permits by late fall and begin construction early next year.

Because the tax break measures have to be read before the council on two dates, the council is expected to schedule a special meeting for Monday and then hold a second reading, public hearing and final vote at the council’s next regular meeting June 20.

Anton said after the committee meeting that he likely will support the tax break before the full council, after signaling his unhappiness with the need to move so quickly at the committee level.

Jon Jennings, a managing partner of the project, told the committee that the development won’t proceed without the tax break. He said the composition of the soil at Thompson’s Point — marine clay, which he said is known as “blue goo” — will require contractors to drive piles as deep as 100 feet to hit bedrock for a solid footing for the buildings, adding significantly to construction costs.

He also said developers will have to pay for a number of other upgrades and infrastructure improvements at the site, such as a new crossing over railroad tracks that is likely to cost $1 million.

The city’s economic development director, Greg Mitchell, said the tax break is justified because of those improvements and other public benefits, such as job creation — about 1,230 jobs during construction and more than 400 when the development is operating — plus the addition of the convention center, walking trails and road improvements.

He also said the city can “shelter” some of the increase in property valuation to avoid cuts in state aid. That’s because the TIF allows the city to stretch out the timetable for adding the full value of the project to the city’s tax base.

Since state education aid and revenue sharing, along with county taxes, are based on a municipality’s valuation, Mitchell said Portland would avoid losing about $11.6 million.

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:

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