SCARBOROUGH — Wex will get a $2.25 million property tax break on the $50 million operations center that it plans to have built at The Downs under an agreement endorsed Wednesday night by the Town Council.

The council voted 5-2 to approve a 15-year credit enhancement agreement that would return $150,000 per year in taxes to the international payment-processing technology firm based in Portland.

Named one of the fastest-growing, publicly traded companies in 2019 by Fortune Magazine, Wex had indicated that without the tax break, it might drop plans to move to Scarborough.

“Wex is going to be a great addition to the town,” Councilor John Cloutier said. “It’s going to have a positive impact on our tax base.”

Councilor Jean-Marie Caterina offered similar support, noting that while she’s “not one who believes in corporate welfare,” she does believe Wex will attract other development to town.

Councilors Don Hamill, Ken Johnson and Paul Johnson, chairman, shared similar reasons for voting in favor.

Councilors Peter Hayes and Betsy Gleysteen listed several reasons for voting against the agreement, including concerns that Wex might become a drain on town resources and not boost the tax base as hoped.

Hayes called it “double dipping” because the council previously granted a tax break for the entire redevelopment of the Scarborough Downs. He also questioned the fairness of giving a tax break to Wex, but not other businesses that come to Scarborough without tax incentives.

“I always thought we (had already) seeded the pot,” Hayes said. “How are we going to pick who gets a (tax break) and who doesn’t going forward?”

Wex’s operations center would be built near the grandstand and the racetrack of The Downs, at the heart of the village center that’s part of a planned $621 million mixed-use redevelopment of the harness-racing property.

The Downs is being redeveloped by Crossroads Holdings, a firm made up of the Risbara and Michaud families of Scarborough. The 500-acre property is in the center of town, stretching from Route 1 to Payne Road, near the Maine Turnpike.

In 2018, the council approved a credit enhancement agreement that will reimburse The Downs developers as much as $81 million in property taxes over three decades. In return, they must meet certain goals in building a mix of commercial, light-industrial, recreational and residential development that’s well underway, including 48 condominiums, 48 apartments and 30 single-family homes.

Under the agreement approved Wednesday night, Wex would pay an average of $838,171 in annual property taxes, which would add up to $12.57 million over 15 years. The town would return a total of $2.25 million, or 18 percent, to Wex.

“We’re pleased that the town is supporting Wex,” Rocco Risbara said after the council voted.

No Wex representatives attended Wednesday’s meeting.

A company official said previously that Scarborough’s tax incentive was among the lowest offered among 12 communities where developers pitched competitive proposals for Wex’s operations center. Still, the official said the tax break was “a potential deal-breaker” necessary to finalize a deal at The Downs.

While some in town supported the agreement, including the Scarborough Community Chamber of Commerce, others opposed it, including one blogger who called it a kickback or a signing bonus.

Founded in Maine, Wex has more than 1,000 employees in Greater Portland and a total of 4,900 associates in 11 countries worldwide.

Last week, Wex reported strong fourth-quarter growth that pushed the company to record revenue of $1.72 billion in 2019. That’s 15 percent higher than 2018, the result of double-digit growth in its vehicle fleet, corporate travel, and health and employee benefits payment businesses, company officials said.

Last March, Wex moved its headquarters from South Portland to a new $40 million, 100,000-square-foot building in downtown Portland that’s designed to hold 400 employees.

In January, Wex announced plans to consolidate six remaining South Portland offices at a new 200,000-square-foot operations center to be built at The Downs. It would eventually house as many as 1,200 workers in various call center, service center and other roles.

The building would be constructed and owned by the developers of The Downs and leased to Wex. The company also has secured the right of first refusal on two other parcels in The Downs where two additional buildings might be constructed, town officials said.

Risbara said Crossroads plans to start building the operations center this year and Wex wants to move workers there by spring 2022.


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