About 14 Damariscotta voters approved the creation of a tax increment financing district in a near-unanimous vote at a special town meeting Wednesday, Feb. 19.
The district will encompass the Camden National Plaza development at 435 Main St. and two contiguous properties, a total of 33.31 acres.
Town Manager Matt Lutkus said the town proposed the district with the intent to raise funds for the construction of a sidewalk along much of Main Street, as well as a possible bike path.
Lutkus said the TIF proposal does not include any incentives for the businesses or developers, like a credit enhancement agreement, as some TIF agreements do.
“So there is no financial payment back to the developer, either in the form of direct payments or utility work within the development,” Lutkus said.
Under Maine 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 the district.
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.
The new tax revenue from the TIF district is sheltered for up to 30 years from educational subsidy and revenue-sharing calculations, as well as county taxes.
Therefore, the town can use the new tax revenue without being penalized for its increase in property valuation through the loss of state funds or an increase in county taxes.
According to Lutkus, the construction of a sidewalk on Main Street is considered a public infrastructure investment related to the TIF district at 435 Main St., therefore, the funds can be used for that purpose.
The town intends to use the TIF funds as leverage to obtain matching grants for the sidewalk and possible bike path.
According to Lutkus, the plan is to connect the new sidewalk to the one that ends at Rising Tide Co-op, a sidewalk the developer will build in front of 435 Main St., a sidewalk that has been funded but not yet built at the corner of Biscay Road and Main Street, and the sidewalk and crosswalk built by Coastal Rivers Conservation Trust next to Great Salt Bay Community School.
Lutkus said estimates for this sidewalk work stand at approximately $2.3 million.
Members of the Damariscotta Region Public Safety and Accessibility Collaborative, a volunteer organization that is seeking to improve sidewalks, trails, and bikeways in Damariscotta, spoke in support of the TIF district during a public hearing prior to the special town meeting.
Anton Lahnston, co-founder of the group, said the TIF district presents a “huge opportunity” to fund a large part of a sidewalk on Main Street.
Derek Webber, another member of the volunteer group, said he walks a lot around town and the reconstruction of the Elm Street sidewalk was a benefit to him.
“Regarding the current proposal, I believe it could form the beginnings of a sidewalk backbone right through this town of Damariscotta, linking all the parts together, and encouraging more walking instead of driving,” Webber said.
He said he currently finds it too dangerous to walk any further through Damariscotta than Coastal Car Wash, at 369 Main St.
The deadline for formal designation as a TIF district is March 1, 2020. The Damariscotta selectmen held a special meeting at 1 p.m., Wednesday, Feb. 26 to approve the minutes of the public hearing so they could be submitted with the TIF application.