Damariscotta’s tax increment financing district, which voters approved in 2020 with a primary goal of funding sidewalk extensions downtown, brought in about $120,000 less than expected in its first four years, leading town officials to suggest expansion.
New property tax revenue from increased value following new development in a tax increment financing, or TIF, district is kept separate from contribution to education and revenue-sharing calculations along with county taxes. The funds are then used for investment in projects in or near the district.
“It essentially shelters the funds from going towards county or school and the town is able to keep those,” former town planner Isabelle Oechslie said to explain the program when proposing similar amendments last January. “So, your dollar goes farther when you shelter the funds. But it can only go towards the specific projects noted in the development program.”
Voters approved the Damariscotta district in 2020, 33.31 acres containing the Camden National Plaza development at 435 Main St. and two neighboring properties. Initial estimates suggested just over $1.1 million would come in throughout the district’s 30-year lifetime, about $40,000 annually.
So far, it has provided around $12,000 per year, largely due to stalled development at the Camden National Plaza. Town Planner Michael Martone said that without new development, he expects the fund will total $52,000 at the end of this fiscal year.
Original plans for the 435 Main St. development included three units – a 22,000-square-foot building for two retail spaces, a 5,525-square-foot building with three commercial spaces, and a 2,700-square-foot bank with a drive-thru. So far, only the bank has been built. Martone said the building permits for the site have expired and any potential project would need to come before the planning board again.
The developers custom build, meaning they will not construct without a tenant.
Dan Catlin, of Portland-based Commercial Properties Inc., which owns the parcel, said the causes of stalled development were “really easy to identify,” citing the COVID-19 pandemic, rising building costs, and rising interest rates.
He has been in talks with several tenants over the last 18 months and is still hoping to see development in the plaza.
“We’re very committed to the site and always have been,” he said. “We’ve got a lot of dollars tied up in the infrastructure there.”
The proposed expansion to other parcels not dependent on Catlin’s development includes parcels to the south on Piper Mill Road, including land owned by Midcoast Maine Community Action and Coastal Realty Capital. To the north, parcels would be filled in from the Camden National Plaza to Main Street’s intersection with Biscay Road, including Hannaford and McDonald’s.
The Piper Mill Road parcels include the proposed DC Ledgewood senior housing project and the site of a 102-bed nursing facility that developers pulled plans for last November. Martone said that Clippership Landing site has prime development potential for whoever may construct a future project there.
Martone said this expansion would fill in holes in the district with areas that have development potential and is similar to changes proposed by Oechslie in January 2023. Some of the expansion would be playing catch-up to development that has happened in the past four years, in his view.
“We’re trying to develop a vision to lead us, versus following what happens,” Martone said.
If expansions are approved, the planning department hopes to use them on long-discussed sidewalk extensions with the eventual goal of connecting the walkway from Hannaford to Rising Tide Co-op, the endpoint of the current sidewalk into downtown. Martone said future sidewalks might connect Piper Mill Road to the downtown as well.
Some progress has been made on Main Street. The town recently received a grant from the Maine Department of Transportation funding a “multimodal path” from Biscay Road to Great Salt Bay Community School, and about $12,000 in matching funds will come from TIF revenue.
Discussion continues about a section being built outside the Camden National Plaza, and developer Catlin said he would be willing to consider options for an extension toward Hannaford. Commercial Properties did lay a gravel pad for a sidewalk previously in the other direction, he said, but believed the construction of the sidewalk itself was the responsibility of another party.
Catlin and Martone said discussion has taken place about adding that sidewalk in exchange for a revision of its entrance permit from the DOT.
TIF districts were a “new shiny tool” when first introduced, according to Martone, but are not a guaranteed success. The town’s original vision for the district makes sense, he said, and making it work is an art.
“Someone who knows how it works can make it work really well,” he said. “If it’s not well-managed, then it won’t work out.”
Damariscotta voters will decide whether to expand the TIF district at a future town meeting, possibly a special meeting in March, though the timeline is not set yet.