SCARBOROUGH — Five years in, the developers of the former Scarborough Downs racetrack have completed $178.5 million in residential and commercial projects that already have generated enough new property taxes to significantly reduce the tax burden on the town’s homeowners.

Redevelopment of the 524-acre property stretching from Route 1 to Payne Road is at least two years ahead of schedule, with a Costco set to open soon and construction of a long-awaited town center expected to start this fall, the developers told town councilors this week. The project calls for hundreds of units of housing, plus retailers, commercial tenants, and recreational facilities.

And while the town has reimbursed the developers for $2.6 million in taxes paid so far under a 30-year credit enhancement agreement, the $3.9 million in property taxes retained by the town has reduced tax bills by 1.7% in the same period, town officials said.

As a result, the owner of a home with an assessed value of $400,000 has saved $528 in property taxes over the last five years, Town Council Chairman Jonathan Anderson said. Those savings accrued for homeowners even after the town completed a $21.5 million public safety complex in 2020, he said and would help pay for a $160 million primary school project that’s on the November ballot.

“That’s pretty remarkable,” Anderson said. “People often view tax breaks for developers as bad. But the reality is, we’re getting a lot of commercial development that’s reducing taxes for homeowners.”

SHIFTING THE TAX BASE

Anderson and other councilors also praised The Downs because it finally pushed Scarborough’s nonresidential tax base above 25% – a goal town officials set years ago, according to Town Assessor Nicholas Cloutier.

The town’s valuation is now $3.8 billion in residential properties (74.8%) and $1.3 billion nonresidential (25.2%), Cloutier said. Without The Downs, nonresidential properties would represent 23.9 percent of the town’s tax base.

Normally, that kind of development would increase state valuations and result in less state revenue directed to the town. However, the increased property values within The Downs redevelopment district are sheltered from state revenue officials, so they don’t count toward Scarborough’s overall property valuation and won’t further reduce the town’s share of state revenue for schools and other services, he said.

The Downs accounts for $112 million, or 50%, of $223 million in new nonresidential construction that has occurred in Scarborough since the Risbara and Michaud brothers paid $6.7 million for the former horse-racing facility in 2018, town officials said. The Downs is now valued at $185.8 million for tax purposes.

The developers credit careful planning, overwhelming public interest, and their investment for the project’s success so far.

“(We) have invested $65 million in private capital to create or improve the infrastructure needed to attract and deliver a successful development,” they said in a written statement. “(The last year) at The Downs was overwhelmingly positive and has far exceeded the municipally set performance standards.”

The Downs includes nearly 1 million square feet of nonresidential construction for occupants such as Idexx, Allagash Brewing Co., InterMed, and Costco, which is going up just off Payne Road. The so-called Innovation District, which was fully sold out in 2 ½ years, includes about 60 businesses.

In addition, the school project, if approved, would be built on 22 acres that the developers have agreed to sell to the town for $7.2 million. Currently, 47 school-age children are living in The Downs, which is about half the number forecasted by school officials, the developers said.

The Downs also includes 537 housing units that were built or under construction as of April 1, including 8o single-family homes, 166 condominiums, 279 apartments, and The Mooring at The Downs, a 12-unit memory care facility. In June, the planning board approved a 51-unit subsidized apartment building designed for people with mobility issues or other disabilities that will be built in the town center.

The developers plan to keep 35% of The Downs undeveloped and have donated 25 acres to the Scarborough Land Trust, which will create two new public trailheads at Warren Woods.

The developers also privately funded the majority of a five-year traffic improvement project to address safety and congestion problems at 37 intersections throughout the town. Two years in, it has expanded capacity at Payne Road and Haigis Parkway, redirected traffic flow in critical arteries, and installed adaptive traffic lights on Route 1 that are expected to improve vehicle movement by as much as 25%.

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