AUGUSTA – Some city officials like the idea of granting a tax break to help a proposed natural gas pipeline come through Augusta on its way from Richmond to Madison.

Officials believe the project could boost economic development in the area by providing companies and other users with a cheaper fuel alternative.

“It could reduce the fuel costs of residents by 30 percent, and businesses by 30 to 40 percent,” said Augusta City Councilor Michael Byron, representative of a city subcommittee that reviews all tax increment financing, or TIF, proposals requested of the city. “Man, oh man, if they can pull that off, with our help, it will be a big boon.”

The TIF subcommittee is recommending the city grant the project a TIF tax break, Byron said.

The company is seeking 15-year TIF deals from each municipality it would pass through. In the first 10 years of the agreement, 80 percent of property taxes on the project would be returned to the company. In years 11 through 15, 60 percent would be returned.

In Augusta, the seven miles of mainline pipe would be installed west of Interstate 95 and 12 miles of distribution lines would be installed within the city, likely including Western Avenue, Hannaford, state property, The Marketplace at Augusta, the University of Maine at Augusta and the new MaineGeneral Medical Center being built in north Augusta.

Over the 15-year agreement, the proposed TIF would return about $1.2 million in property taxes to the pipeline developer — a company led by principals Richard Silkman, Mark Isaacson and Anthony Buxton.

Isaacson was vice president of Edwards Manufacturing, which owned the Edwards Dam across the Kennebec River in Augusta until its removal in 1999.

“I’ve been doing energy work, one way or another, in this area for the last 30 years, so I’m somewhat of a student of energy in this valley,” Isaacson said. “The common element, in the 19th century, was the mills and people of the Kennebec valley had a significant economic advantage over the rest of the world — water power … now, this area operates at a significant economic disadvantage. This (gas line) is something that needs to happen in this valley.”

Portland-based Kennebec Valley Gas won conditional approval from the Public Utilities Commission Aug. 16 for the $70 million to $80 million project.

But the company still needs to secure major clients. And it must wrap up TIF deals that require approval in each community.

Augusta Mayor William Stokes said the TIF proposal would likely come back to councilors for a vote at their Oct. 20 meeting.

Councilors reacted positively to the proposal this week by agreeing to sponsor the council order.

Byron said there is no question the project would not take place without TIF deals. Silkman said if the project were taxed at 100 percent by all communities, it would leave the new gas company with a $1.5 million annual tax bill.

He said building and starting a gas pipeline is very expensive. After the initial 15-year TIF period, Silkman said the firm should have enough clients on the line, and enough debt paid off, to pay its full property tax bill for the pipeline.

He said the pipeline will generally follow rights of way in state, county and local roads, and be buried about 3 feet underground in a strip of land about 3 feet wide.

Kennebec Journal Staff Writer Keith Edwards can be contacted at 621-5647 or at:

[email protected]