BATH
A former school in Bath will be converted into affordable housing. An affordable housing tax increment financing district request made by The Szanton Company for the Huse School project was unanimously approved by the Bath city Council Wednesday.
The project proposes the renovation of the historic school to create about 58 apartments.
At a July 15 public hearing, Nathan Szanton, the company’s president, said a TIF would significantly contribute to funding the $10 million project through the Maine State Housing Authority.
An affordable housing tax credit for the project in particular would be awarded through an annual competition that the company hopes to apply for in the fall, which could contribute to 54 percent of funding.
During that hearing, Szanton said the competition is judged based on a point system, and MaineHousing will award three crucial points to the project proposed by the Portland based company if the municipality approves of the TIF.
With TIF approval, 50 percent of the city’s property taxes is earmarked toward funding the project for the first 15 years, while the remainder would be retained by the city.
After 15 years, all property taxes would return to the city annually.
Shana Mueller, a Bernstein Shur attorney who specializes in TIFs, clarified that the reasoning for the 15-year-agreement was due to guidelines set by MaineHousing.
“The reason that we have come to 50 percent for 15 years is because Maine State Housing Authority, in their competitive tax credit process, provide additional points in that competition with projects that come forward with TIF arrangements with the municipalities of a minimum of 15 years at 50 percent following project completion. …” she said. “There wasn’t a whole lot of back and forth on that.”
Mueller added that while credit enhancement agreements under TIF districts can usually be negotiated between developers and municipalities, due to the terms of the compe- tition and requirements set by MaineHousing, it was not negotiable for this particular situation.
City Manager Bill Giroux said that councilors were in support of the TIF, but were not pleased with MaineHousing’s standards.
“What they’re not happy about is that this is a requirement from Maine State Housing Authority,” Giroux said, “in that municipalities who join as partners in these kind of projects are being held to this standard, which to our recollection we were never asked if this would be a good standard to have. It was something that was created.”
Councilor Tink Mitchell also expressed his disapproval with the non-negotiable terms of the TIF, because the city appears to be “held hostage” by MaineHousing’s guidelines.
Giroux said that Council Chairwoman Mari Eosco has already expressed an interest in pursuing a conversation with the Maine State Housing Authority regarding these concerns after the Huse School project has been processed.
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