EUSTIS – About 40 people packed the Eustis Community Center on Monday night to learn more about a tax increment financing proposal presented by Stratton Lumber Inc.

The lumber company, which opened its doors in the early 1980s, employs 52 full-time workers. They produce softwood, dimension framing lumber for houses in a 50,000-square-foot manufacturing plant on a 65-acre site on Fontaine Road in Stratton.

Originally assessed at $7.2 million, the plant recently underwent a $3 million modernization project that increased its net worth by nearly half.

As a result, Stratton Lumber has proposed a TIF agreement that would return 69.2 percent of the new property taxes it would pay for the modernization back to the company.

In return, the company would continue to pay full property taxes on the originally assessed $7.2 million and says it would be able to maintain existing employment levels and to stay competitive in the softwood lumber market by lowering its overall costs, according to the agreement.

Maine’s TIF law allows all or a portion of the new, local property taxes generated by business developments or expansion to be set aside as an economic development incentive. The assessed value, on which the new taxes are based, is then not counted against the town in calculating county taxes, state revenue sharing or education aid.

Last month, two Eustis selectmen voted in favor of sending Stratton Lumber’s TIF proposal to a special town meeting. Selectman John Caldwell, who was out of town for the meeting, was unable to vote but sent fellow board members a letter before the meeting expressing his opposition to the TIF.

“I do support the Stratton Lumber Mill,” he wrote. “As a selectman, I recognize the importance of industrial and commercial endeavors as a necessity to stabilize the Eustis tax base. They are a very good asset to the town of Eustis.”

But, Caldwell wrote, “I just want to go on record as being opposed to this project at this time. As a selectman, I am not comfortable supporting a project that will pass the burden of taxes from the business sector on to the individual homeowner.”

Now, he says, “It’s up to the town.”

The town’s assessor, Sandra Scribner, is also on record as opposing to the TIF. She says she is “tickled to death” that Stratton Lumber is in town, but says, “I am in favor of what is fair for everybody. I don’t think everyone’s taxes should go up to benefit one group.”

In an information sheet that Scribner passed out to residents, she listed why the proposal shouldn’t pass. She calculates that the taxes on a home valued at $80,000 would be $1,280 if the TIF passes, but $40 less, or $1,240, if it were defeated.

If the TIF passes, the tax rate will be $16 for each $1,000 of valuation. That’s 50 cents more than the $15.50 it would cost per $1,000 if the proposal fails, said Scribner.

“The last thing I want to see is taxes go up, especially for people on fixed incomes,” said Luke Brochu, general manager of Stratton Lumber. “Our intent is that it won’t cost taxpayers any more money. We are asking the town to lend us a hand.”

Brochu says the request for the TIF is for two purposes, one is to stay competitive in a market where many other Maine lumber companies are being granted TIF deals by their communities, and secondly “for the pat on the back aspect,” to let the company know the town appreciates it doing business in town.

He says he is “disheartened” that some people are not in support of the proposal, but hopes the majority will be supportive at the polls. If the TIF doesn’t pass he said, the company would be “disappointed” and may “have to stop and think about future investments.”

Brochu said, “The spirit of the this law is that it will be beneficial both to the town, and the company.”

Kathy Frazier, town clerk for Eustis, attended Monday night’s meeting, which she said was very informative. “It was hard to tell either way how people really felt, though,” she added.

The will of the people will be made known Tuesday, May 27, at the Eustis Community Center, when voters will attend a public hearing at 6 p.m., followed by a town vote on the proposed TIF.

In the meantime, Brochu said, he is available to answer questions and urges residents to stop by the mill and take a plant tour.

For more information, people can phone him at 246-4500, extension 224.

sdepoy@sunjournal.com