In a special meeting July 30 the Wiscasset Board of Selectmen agreed to consider a new or revised Tax Increment Financing district that could support an expansion proposed by Molnlyoke Health Care.
Molnlyoke is the owner of Rynel Manufacturing in Wiscasset. The company is considering a $6 to $7 million construction project to build an addition on the Rynel production facility located in the Wiscasset Industrial Park.
Rynel has been in Wiscasset since 2005, and is the leading manufacturer of hydrophobic polyurethane forms that are used for wound care and medical products. Molnlyoke, a Sweden-based global manufacturer of medical devices purchased Rynel in 2010. This past year Molnlyoke acquired Brennen Medical LLC, a St. Paul, Minn. company that specializes in the treatment of severe burns.
The reason for the expansion is that Molnlyoke is moving the Brennen operation from Minnesota next year to a new location. Wiscasset and Brunswick are high on the list for the new location, according to Molnlyoke Business Development Director James Detert.
The Wiscasset option involves building a 32,000 square foot addition onto their present building, which would give them additional space for their research and development program. The second option would be to build another stand-alone building across from their new building in Brunswick. Detert said there would not be little difference in the cost.
Detert said Molnlyoke will request a TIF for their expansion project.
According to Wiscasset Town Planner Misty Parker, a TIF has many benefits for the town. It allows the town to shelter new value resulting from certain development projects from being included in the state subsidies and county taxes.
It allows the town to retain all or a portion of those new tax revenues that would otherwise be passed on to the county or state. The increased value is not reflected in the town’s valuation through the term of the TIF, which is usually 20 years.
Without a TIF, the total assessed value of new development is included in the town’s valuation. As a town’s total value increases, it will see a decrease in education and revenue sharing, and an increase in county taxes.
Any new tax revenues resulting from development projects are reduced through loss of subsides and increase in taxes, according to Parker. For every new tax dollar 50 percent is lost in revenue, 9 percent in state revenue, 26 percent in school aid, and 15 percent in county taxes.
Parker said a Molnlyoke expansion project for the town of Wiscasset would create new jobs, new tax dollars, new opportunities for current businesses, and it would be an investment in the community, and there would be no new demands for services.
“Its a wonderful opportunity for the town,” said Selectman Jeff Slack. “Their expansion is our expansion.”
“It is a win win situation for them and the town,” said Selectman Tim Merry.
Board chair Ed Polewarczyk asked about the Ferry Road Development LLC, and the current Tax Increment Financing (TIF) districts, indicating the town is not on the best of terms with the owner of Ferry Road Development LLC.
Detert pointed out although there is a problem on other property owned by Ferry Road Development LLC, the TIF districts have never been a problem. “The owner of Ferry Road Development has done everything right by us,” he said. “That is because we pay our taxes, and he in return pays the town.”
Detert said Molnlyoke could buy the property or seek another developer to buy the property in the future.
According to Town Manager Laurie Smith the town received $38,000 in taxes from Rynel, and $21,000 from the state business equipment reimbursement program.
The town has two options in proceeding with a TIF agreement for the expansion: a modification of the current TIF, or create a new TIF. The selectmen authorized the Smith to develop a TIF proposal for their review at the next selectmen’s meeting, scheduled for Aug. 13, at 7 p.m. The board also authorized Smith to draft a letter to Molnlyoke indicating their support for the project.
A TIF agreement will need the support of the voters, as well as the state’s approval. Therefore a special town meeting will be required. At their next meeting, the selectmen will determine it will be an open town meeting, or a ballot vote.
