Damariscotta is expanding its proposal for a tax increment financing district from the Camden National Plaza development at 435 Main St. to two contiguous properties.
The properties are an 18.02-acre lot home to The Garage, an auto repair shop, and a meadow behind it that abuts the Lincoln County Rifle Club; and a 3.99-acre lot at the southeast corner of Main Street and School Street, across School Street from Supplies Unlimited.
Damariscotta Midtown LLC owns the properties. Mason Sears, property manager for Damariscotta Midtown LLC, contacted Damariscotta Town Manager Matt Lutkus to request their addition to the TIF district.
The Damariscotta Board of Selectmen voted to include the two parcels in the TIF proposal Wednesday, Dec. 4.
Under state law, a TIF district allows a municipality to take property tax revenue from new development in a certain geographic area and place it in a special fund for investment in infrastructure and economic development to serve that area.
The rise of total property value in a town as the result of a major development causes towns to pay more in county taxes and receive less in state revenue in the form of education subsidies and state-municipal revenue-sharing.
A TIF district shelters new tax revenue from educational subsidy and revenue-sharing calculations, as well as county taxes, for up to 30 years. Therefore, the town can use the new tax revenue without a corresponding loss of state funds or increase in county taxes.
Damariscotta intends to use the TIF funds for the construction of a sidewalk and possible bike path on Main Street.
Lutkus said Sears requested the inclusion of the Damariscotta Midtown LLC properties because he would like to see the sidewalk on Main Street completed sooner and because inclusion in the TIF district may help him market the properties to developers.
The inclusion of more properties in the TIF district will allow Damariscotta to raise revenue for the sidewalk project faster, so long as the valuation of those properties rises.
Sears, in a phone interview, said he is not actively seeking developers to invest in the properties, but the land is in the town’s development district.
“If the right development proposal came along that would be beneficial for the town, we would consider it,” Sears said.
The proposed TIF district would include a total of 33.31 acres, which would be 0.35% of the town’s total land area. State law dictates that the maximum size of a TIF district is 2% of a municipality’s total land area.
The deadline for formal designation as a TIF district is March 1, 2020. Voters must approve the creation of the district, so a special town meeting has been tentatively scheduled for Feb. 19. A public hearing will take place prior to the special town meeting.
The town will then submit a plan to the Maine Department of Economic Development for final approval. Lutkus said the town is working closely with officials from the Department of Economic Development and will receive the state’s blessing before the special town meeting.