In a handwritten letter delivered to the Edgecomb Town Office, June 4, developer Roger Bintliff of Dresden asked the town to send payments from a tax increment finance (TIF) development district fund, currently being paid to Bank of Maine (formerly The Savings Bank of Maine) directly to Edgecomb Development Corp.
Selectman Stuart Smith said the TIF zone was originally designed to create a way for the municipality to take ownership of water and sewer lines that were built, seven years ago, under the Sheepscot River between Edgecomb and Wiscasset.
“It was about a $2.5 million project,” Smith said.
He said the TIF was unusual, in that the work was done before the TIF district was created. Town documents state that the captured assessed value of the TIF district was $2,888,000 as of April 1, 2008.
“That’s the value of the property before the TIF was set in place,” Smith said.
He said property taxes from that value go into the General Fund. Any value over that amount, approximately the difference between that amount and $14 million, at the current time, is set aside for development in the TIF zone.
In this case the development was already complete and 55 percent of the TIF funds are used to pay the developer back with 45 percent being used by the town for infrastructure projects in the TIF zone.
“It was started by a group headed by Tom Toye and then Edgecomb Development took it over,” Smith said. He said Bintliff’s company bought out Edgecomb Development after purchasing the property from another group that had purchased it from Toye’s group.
“Edgecomb Development brought the water and sewer lines over and paid for it and the TIF was created to pay them back,” Smith said.
Smith said making the water and sewer lines town-owned infrastructure made the development eligible for a density bonus that allowed the developer to build more units.
“They built it and the TIF was put in place to pay them back,” he said. “I’m not sure what happened between Edgecomb Development and the bank, but they went to court on this.”
“Most of it is housing,” Smith said. He said the property includes a restaurant, inn and cottages, as well as 16 acres on the east side of Eddy Road that contain 27 low-income housing units and the town’s fire station.
Smith said Edgecomb Development had not been paying property taxes on the property and the town was getting ready to foreclose, when “the bank stepped in and foreclosed before the town did. Somewhere in that process, I think it was before the bank stepped in, they signed over the right to TIF payment to the banks. Those TIF payments are assets.”
“Roger came recently to the town hall and said he thinks those payments should go back to him,” Smith said. “We haven’t seen any legal documentation.”
Smith said a two-year-old agreement between the town and the bank calls for payments to be sent to the bank.
He said the original amount to be paid back to the developer was $1,225,000 and that somewhere between $300,000 and $400,000 has been paid. Of that, approximately $140,000 was sent to the bank, in two equal annual payments.
“We haven’t seen anything to change that,” he said. Smith said all the town had received to indicate a change was the handwritten letter from Bintliff.
This year’s payment has been made and Smith said no further payment is to be made before the beginning of 2013. He said an agreement calls for the TIF payment to be made 30 days after taxes in the TIF district have been collected.
According to town documents, this particular TIF was formed “to allow Mr. Bintliff a chance to recover his financing costs for laying a sewer pipe under the river from Wiscasset to his property on Davis Island.” The terms of the contract call for annual payments over a period of 30 years.
Selectman Jack Sarmanian said the selectmen were looking into the situation. He said the property has been in receivership for more than two years, and was sold at auction several weeks ago.
“There has been nothing officially defined by the bank to us,” Sarmanian said. He said the town is exploring the situation with the bank.
“We did not talk to Mr. Bintliff,” Sarmanian said. “He left us a note.” Sarmanian said the issue was on the agenda for the next Edgecomb Board of Selectmen’s meeting on Mon., June 18.