WEX, Inc.’s Portland facility. A 200,000 square foot WEX Inc. facility was approved to move into the Scarborough Downs, but a lease still has not yet been signed. Town Manager Tom Hall said that Ben Divine, the developer, believes that next step is imminent. Gregory Rec/Staff Photographer
SCARBOROUGH — The Town Council discussed the WEX, Inc. project, approved for a tax break earlier this year, and how it may or may not be affected by the Covid-19 pandemic.
On April 28, Town Planner Jay Chace told town councilors during an economic indicators workshop that the Planning Board has been pushing through busy meeting schedules. Projects, like the Scarborough Downs development, are staying on target for the year.
Some Town Council members expressed concern about the WEX, Inc. project, a $45 million building for the Scarborough Downs that the Town Council had approved a $2.25 million credit enhancement agreement for. Councilors had questions about whether the project would still take shape in Scarborough for 2022, especially as a lease has not yet been signed.
Town Manager Tom Hall said that he has spoken with Downs partner Peter Michaud and project developer Ben Divine, who both confirmed that plans for WEX, Inc. to come to Scarborough are still on.
“I had a lengthy conversation with Ben Divine, the developer, in this case,” Hall said. “As of last week, there is not a signed lease, but he believed it was imminent. And he spent a long time explaining to me the fundamentals that caused WEX to be interested in an office space this size. Those fundamentals don’t change … The fact is they have staff in very temporary spaces and even if the staff is reduced somewhat, there’s still the need to house hundreds of folks in a space.”
He added, “The final lease numbers they arrived at are very competitive with existing market lease rates. He’s still spending money and is confident this will proceed.”
Councilor Peter Hayes said that he was frustrated that a lease has still not been signed, especially after the Council had been pressed to make a decision.
“We were under tremendous pressure to make a decision because the lease was going to be signed momentarily and they needed to have an answer,” he said. “Here we are almost six weeks, eight weeks, out, so I really hope we take this as a learning (moment), that we need to follow our normal processes of things and not be leveraged and pressured into doing things quickly. I am a little frustrated that it’s still not signed. We had to have emergency meetings and everything else to get it done. It’s a pressure tactic to get us to make decisions.”
No one could have expected the Covid-19 pandemic, Councilor Jean-Marie Caterina said in response to Hayes.
With respects to the credit enhancement agreement, Councilor Don Hamill said that people in town have not yet “let go” of the project’s approval and in light of the current Covid-19 situation, that portion will receive much more focus.
Councilor Betsy Gleysteen said that she wanted to know if the town could go back and rework the agreement if WEX, Inc. ended up with a smaller building than originally expected. The facility is expected to be 200,000 square feet.
Hall said that money cannot be reimbursed until taxes are paid and requirements are met.
“It doesn’t start until they take occupancy, so there needs to be a physical building built,” he said. “The CEA does a fair job of describing what our expectation is, a building of a certain size, a certain value. If that’s different, then I think we have the opportunity to reapproach and reassess. But no money is reimbursed until taxes are paid. We could characterize these as commitments, but they’re commitments that require a fair amount of effort. They need to perform first.”
Councilor John Cloutier said he believes the CEA is a reason Wex will follow through with the building. Without it, he said, “It would’ve been my expectation that (they) would have pulled out. The fact there’s a CEA, that may have actually made it make more economic sense to build the new building and locate their staff in one place instead of trying to reapply on existing leases. Whether people agree with the CEA or not, I think there’s a real incentive that may be taking place, should they follow through and actually build the building.”
Even though the current situation is not clear, the Council should keep working to keep building up what it can of the economy, Councilor Don Hamill said.
“We’ve talked about ambiguity, and we couldn’t get more ambiguous than stuff we’ve talked about tonight,” he said. “We have new guidance from the governor, trying to bring the economy back, had contracts that we committed to that are still going, and we’re not sure if they are or not, whether we want them to or not. It does seem to me whatever embers in our economy we have, we want to blow on them and keep them going somehow in a reasonable way. At the same time we’re not going to let go of the concerns we have around growth.”
Many businesses have had to stop operating or slow down during this time, but construction has not been affected, said Hall.
“In almost all respects, they have not missed a beat,” he said. “I think there’s been some interruption but in large part it’s been remarkable through these last five weeks. Those are the folks you see on the roads and going to the stores when the rest of us are home.”
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