PORTLAND – The developer of a planned $100 million mixed-use development on Thompson’s Point says it has finalized an agreement to relocate a propane facility occupying valuable rail-side real estate.

The deal will allow for a 3,500-seat arena and event center and a parking garage to be built next to the train tracks, making it easier for passengers entering Portland via the Amtrak Downeaster to disembark and directly enter the facility, said Chris Thompson of the Forefront Partners I.

Thompson said the Forefront Partners I has reached an agreement to acquire 2.5 acres of land owned by Suburban Propane.

“It’s far superior to have the event center right next to the tracks,” Thompson said.

The developer also is seeking to increase the maximum height and residential density on the property so it can build a tall residential building — and a taller office building and hotel — near the rail line on the northern panhandle, Thompson said.

In exchange for the land, Thompson said the Forefront Partners will buy three acres of city-owned land on Riverside Street for about $300,000 and build Suburban Propane a new facility there.

The goal is to relocate Suburban within 18 months of the city making a final decision, Thompson said, noting that construction of the event center would begin shortly after.

Neither Greg Mitchell, the city’s economic development director, nor a representatives for Suburban Propane could be reached Tuesday afternoon for comment.

The City Council’s Housing and Community Development Committee has met in executive session periodically to discuss a possible sale of city-owned land on Riverside Street. The committee will discuss the issue again in closed session Wednesday.

In addition, the committee will discuss changing a tax break plan — or Tax Increment Financing District — that is expected to return roughly $32 million to developers over the next 30 years.

The TIF plan approved by the council in 2011 outlines a specific development plan and geographical area.

The committee will consider expanding the geographical area to include the Suburban Propane site and an additional acre of land being acquired from the New England Passenger Rail Authority. Changes to the tax deal also eliminate a proposed concert hall from the development plan, while adding the preservation of two brick buildings. The housing would not be added to the TIF, Thompson said.

Developers have also submitted a request to increase the maximum building height allowed in the B-5 zone from 65 feet to 120 feet. And increase residential density from 60 units per acre to 120 units per acre.

The height and residential density allowance would only apply to developments that use the city’s master planning process, according to Senior Planner Bill Needelman.

A development would also need to be in a transit-oriented TIF district — which Thompson’s Point is currently designated — to get the increased residential density, he said.

There are only a few B-5 zones in the city. In addition to Thompson’s Point, Marginal Way east of Franklin Street is a B-5 zone, as are the corner lots at Marginal Way and Forest Avenue and a strip of land on Anderson Street from Fox to Gould streets.

Needelman said staff is still analyzing the impact of the proposed changes. Its analysis will be presented to the Planning Board on Oct. 8, he said.

Since the project was unveiled in 2011, the actual development plan has been constantly evolving, including the preservation of two brick buildings that were originally slated for demolition.

One of those building is a 33,000-square-foot facility that is expected to become the home of the Circus Conservatory of America, which intends to offer bachelors of fine arts degrees in circus arts. The other is a 24,000-square-foot building that could become a “creative cluster” of uses, Thompson said.

A hotel, restaurant, office building and a sports medicine lab are still envisioned for the property, Thompson said. The Maine Red Claws, the D-league affiliate of the Boston Celtics, have announced that they will make Thompson’s Point their home.

Thompson said the relocation of the event center to the rail-side location will give the rail passengers coming to Portland a comparable experience with riders entering North Station in Boston, which is right on the doorstep of TD Garden, where the Celtics play their home games.

“We’re now able to get the Red Claws on one side and the Celtics on the other,” Thompson said.

Randy Billings can be contacted at 791-6346 or at:

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Twitter: @randybillings