ARUNDEL — Voters will have a lot to ponder when they convene at the Mildred L. Day School on Wednesday, June 11 for Arundel’s annual Town Meeting.
The usual budget considerations will be before them: In all, voters will decide on close to $3 million in expenditures, a slight increase over the current fiscal year, and $1.6 million in revenues ”“ again, a small increase over fiscal year 2014.
But perhaps the main issue facing residents will be the creation of what’s become known as the “Arundel Seasonal Cottages Tax Increment Financing District,” which would place the town among many other York County communities that have established multiple TIF funds. Arundel voters approved the town’s first TIF during a special Town Meeting in March, encompassing the Central Maine Power corridor, with those funds slated for fire department purchases.
A TIF, essentially, captures the increase in valuation on a certain property or designated zone when development or renovations take place, and sets aside those funds for a specific use, usually pertaining to improvements or tax incentives within that zone. TIF funds can be set aside for up to 30 years.
Earlier this year, Town Planner Tad Redway described a TIF as a “tax shelter,” with the monies essentially sequestered from state taxes. In neighboring Kennebunk, a TIF encompassing the Route 1 corridor through town has been used to fund various projects, including construction work in the downtown area, as well as the outdoor public-use pavilion, which will likely be completed sometime during the summer.
In Arundel, developer Arundel Cottage Preserve is seeking to develop portions of about 195 acres of land on Route 1 in Arundel into a seasonal cottage resort, as well as a small commercial/office retail site.
In recent weeks, selectmen supported sending the issue to residents for a vote. The plan has been reviewed by the planning board, economic development committee, Redway and Town Manager Todd Shea.
“The TIF is a win-win for the town and our development team,” said Joe Paolini, the project manager for Arundel Cottage Preserve, in a written statement. “It would provide a portion of new taxes from the new development to leverage additional private investment, and provide numerous fiscal and economic benefits to the town that would otherwise not occur.”
A press release issued by the town estimates that the TIF would result in about $5 million in revenue to the town’s general fund, as well as $5 million for use in infrastructure investment and economic development, which may include sewer construction along Route 1; a sidewalk in the development area; a revolving business loan or grant program to support other businesses; and marketing and support for the town’s economic development program.
Officials claim that about 23 full-time jobs related to construction will be created. Additionally, because the cottages are seasonal, no new students will be added to Regional School District 21 as a result of the project, and the town expects a diversification of the town’s tax base, providing new revenues to support services.
“The town is able to financially benefit through a TIF arrangement because through TIF, the state allows the town to ”˜shelter’ new value within the TIF from calculation of state certified property valuation,” according to the town’s official statement. “In doing so, the school district avoids reductions in state aid to education, and the town avoids reductions to the State Municipal Revenue Sharing Program, and avoids increases in the county tax.”
A public hearing on the issue will be held at the school at 6 p.m. next Wednesday, with the Town Meeting vote to follow at 7 p.m.
“We are committed to making this a high-quality project the town can be proud of,” said Paolini, “creating new investment, jobs and revenues.”
— Staff Writer Jeff Lagasse can be contacted at 282-1535, ext. 319 or jlagasse@journaltribune.com.
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