Wex, a Portland-based payment-processing technology firm, is the only company in Maine to make Fortune magazine’s list of the 100 fastest-growing publicly traded companies. On Feb. 19, the Scarborough Town Council approved a $2.25 million tax break for the company to build an office in their town.Gregory Rec/Staff Photographer
SCARBOROUGH — The town will be entering a credit enhancement agreement of $2.25 million with WEX, a company that is expected to open in the Downs District by 2022.
The council voted 5-2 to approve the plan on Feb. 19, with Councilors Peter Hayes and Betsy Gleysteen opposing. They said that while they are in support of WEX coming to Scarborough, they are against the CEA.
The 15-year agreement provides Wex with a tax break of $150,000 per year. WEX would pay an average of $838,171 in annual property taxes, which would add up to $12.57 million over 15 years, according to the Portland Press Herald, and the town would return a total of $2.25 million, or 18 percent, to WEX.
Councilor Jean-Marie Caterina and Chair Paul Johnson said that the office building could be an anchor or catalyst for the Downs District, encouraging more businesses to move in and economic growth.
“I think it makes sense for many reasons,” said Caterina. “I’m not one who believes in corporate welfare, per say. However, when we’ve got a return on the investment we’re making then it’s crazy to not do what we’re planning to do here.”
Councilor Don Hamill said that it would be “ridiculous” for the town not to support the agreement under the assumption that WEX would come to Scarborough, credit enhancement or not.
However Hayes said, “I’m not going to support the CEA with WEX. That has nothing to do with them coming to our town. It really has to do more with where I thought we were going and what I thought CEAs were for.”
These kinds of agreements and negotiations should be with the tenants and developers, he said.
“I do have a problem with us picking winners and losers, that WEX is the first to come to the Downs,” said Hayes. “What’s going to happen when the next marquee name comes, a L.L. Bean — or we’ve talked about hotels and grocery stores. How are we going to pick going forward who gets a CEA and who doesn’t?”
In addition, he said it was double dipping as the council previously approved a CEA reimbursing property taxes of as much as $81 million over 30 years for the entire Downs development, according to the Portland Press Herald.
“WEX is a proud Maine company, but as a Maine company, they are no doubt aware of the burden that ordinary Mainers carry in taxes, especially property taxes,” Gleysteen said. “Despite what people think of Scarborough, we have an economically diverse community and many people struggle to pay bills for their homes.”
“We wouldn’t be here tonight talking about WEX if they weren’t asking for a credit enhancement,” said Gleysteen. “I think that’s been a little confusing in the public record — people will say, ‘Well, you’re against Wex.’ I’m definitely not against WEX. I’m for WEX, and they seem to be a great company.” However, Scarborough presents a competitive enough business environment without offering any additional rebates, she said.
Councilor Ken Johnson said that he had been “on the fence” regarding the matter but ultimately believes that the agreement and business will be a net plus for the town.
After speaking to Board of Education Chair Leanne Kazilionis, who is also a WEX employee, Councilor John Cloutier said that he believes that WEX would provide educational support and programming to Scarborough schools, supporting STEM students and providing opportunities outside of the classroom.
“With a particular focus on STEM, WEX supports educational initiatives and organizations that will help Maine to build a strong pipeline of talent,” Kazilionis said in an email to the Leader. “Through our many non-profit partners, we offer funding for educational enrichment in the STEM space as well as programming such as CODEX, where middle schoolers are invited to WEX to learn the basics of coding. This programming is offered in partnership with the Boys & Girls Clubs of Southern Maine.”
“For me, WEX is going to be a great addition to the town, and I tend to base my decisions on numbers and I support this,” said Cloutier. “To me, it’s going to have a positive impact on our tax base. It’s something that’s kind of difficult. It’s a tax incentive, but we are surrounded by tax incentives — it’s kind of the American way.”
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