SCARBOROUGH — Scarborough taxpayers should be aware that the impending development of Scarborough Downs may have a significant negative impact on future tax rates, not to mention on the town’s character and quality of life. That’s because the town and developers appear to be on the verge of entering into a tax increment financing agreement or TIF. A TIF is just intimidating jargon meaning a potentially massive tax break for the developers.

Despite its complicated-sounding name, a TIF is basically a simple concept: Some percentage of additional tax revenues from new construction is paid back to the developers of a project. In other words, a portion of future tax receipts that would normally be available to support school and municipal expense budgets will instead be diverted to the developers.

While there may be specific situations where a TIF can be a useful economic development tool, the only benefit of the Scarborough Downs TIF demonstrated so far is to accommodate the developers’ plans. Indeed, the town and developers have been so secretive about the project and the TIF that one has to be suspicious of the likely deal.

Here are three important pieces of information we do know:

• The development of Scarborough Downs for residential and commercial purposes is the largest development project the town has ever faced, with estimated new construction valued between $600 million and $900 million. That’s about a 15 percent to 23 percent increase in the town’s total assessed value.

• Likewise, the 30-year TIF agreement will be the largest financial commitment the town has ever made. The TIF could divert $150 million or more of future tax dollars to the developers.

• The current proposed approval process by the Town Council allows four weeks between the date of the workshop at which details of the TIF are expected to be released (Sept. 19) and the Town Council vote on the TIF (Oct. 17). That’s just four weeks to inform and educate the public about a massive 30-year financial commitment.

And here are two critical unanswered questions:

What does the overall project look like? There is a preliminary master plan, but little in the way of details, such as the number and types of housing units, the estimated additional population, the estimated additional school enrollment and the types and square footages of office, retail and other commercial buildings. Without this information it is impossible to judge the impact of the proposed development on school resources, municipal services, traffic and other quality-of-life issues.

What is the financial impact of the TIF? Absolutely no financial projections have been shared with the public. The projected impact on real estate taxes is unknown. Instead, town officials have presented the TIF as a “public-private partnership,” as if that nostrum will allay all concerns residents may have.

It’s also extremely troubling that until very recently, town leaders have relied almost exclusively on information provided by the developers during the negotiations of the TIF, rather than engaging a consultant to represent the town’s interests. Again, a generation of taxpayers will have to live with this agreement that is scheduled to be approved in a four-week period.

But the lack of information isn’t even the most troubling aspect of the current concerns about the Scarborough Downs TIF. This is Scarborough, so the real concern is process.

The cavalier attitude of town leaders to the commitment of $150 million or more in future taxpayer funds has been astounding. Their we-know-better attitude is deeply troubling. They refuse to consider a referendum on the TIF decision. This dismissive attitude is best exemplified by a recent statement by Town Manager Tom Hall that he “cannot fathom” that town residents could be informed enough to cast a vote on the TIF.

It is as if most of the Scarborough Town Council slept through the town’s Board of Education recall debacle of earlier this year. In that case, the lack of transparency and an unwillingness to consider citizen concerns by the school board led to the recall of three of its members by overwhelming margins.

Scarborough is fortunate to have concerned, motivated and well-informed citizens who are completely capable of deciding what is in their best long-term interests. Town leaders should recognize that and put the TIF decision out to a vote. To ignore the voice of the residents in this extraordinary decision would be a grave mistake.

 

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