AUBURN – Redevelopment at the Auburn Mall will get a tax incentive boost, councilors voted Monday.

Supporters defended a new Tax Increment Finance deal that would return $3.3 million to developer George Schott to renovate the existing mall, pay for road improvements and a sewer connect nearby and break open retail developments on surrounding lots.

It was enough to convince a narrow majority of councilors. Kelly Matzen, Eric Samson, Robert Hayes and Bethel Shields all voted for the new tax incentive plan.

Councilors Belinda Gerry, Donna Lyons Rowell and Bob Mennealy all voted against the plan.

“My constituents have told me they don’t want this,” said Ward 4’s Rowell, who is up for re-election next week. Constituents have told her they want more retail development in the area, but expect the developer to pay.

Ward 3 Councilor Eric Samson, also up for election next week, said his voters have told him the exact opposite.

“I’ve knocked on a lot of doors, and this is one of the things people are actually excited about,” Samson said.

According to the plan, Schott plans to renovate the aging 300,000-square-foot mall as well as build 130,000 square feet of new retail space around the mall. The TIF incentive plan that would refund Schott $3.3 million of property taxes paid over the next 15 years.

Another $9.1 million in property taxes would be set aside to fix roads in the area, bring in utilities and market Auburn retail.

It would be the third TIF district dedicated to Auburn’s booming retail district. Councilors created the first in 2002, but changed it in September. It redirects the tax money paid from Lowe’s, Burger King, Lamey Wellehan and future developments along Turner Street through 2021 to pay for road improvements in the area. That amounts to $7.5 million in TIF revenue.

Councilors created the second TIF in the area in 2005 on Kohl’s and the Mt. Auburn Plaza development that includes Ruby Tuesday and the Longhorn Steakhouse. That returns roughly $1.75 million in property tax revenue to Schott.

Precedent setting

It’s one incentive too many for many attending Monday’s meeting. Jim Wellehan, of owner of Lamey Wellehan, said his problem is with the philosophy behind the deal.

“Every type of retail developer will require something like this from now on,” he said.

Ron Potvin, running for one of the two at-large seats on City Council on next week’s ballot, said the incentives at the mall shouldn’t be necessary.

“They’re tripping over themselves to develop there now,” Potvin said. He also argued the city was using tax incentives to bring in low-paying retail jobs.

Auburn Economic Development Director Roland Miller disputed both claims.

“If there is no risk in developing the mall, if we have people knocking down our door to get in there, where have they been for the last 25 years?” Miller said. Auburn’s economy does need retail jobs as well as high paying industrial jobs.

He insisted the new deal works for Auburn.

“The single aspect of this that’s most misunderstood is that this does not mean any new debt for the city,” Miller said. Rather than having to borrow to pay for road and sewer improvements, Schott will do the work out of his pocket. He’ll be repaid once new retail begins coming into the mall and starts paying taxes.

“If he brings in nothing, he gets nothing,” Miller said. “We all get nothing.”