OXFORD — Selectmen have authorized the town manager to sign a new credit enhancement agreement with hotel developers. 

At their meeting Thursday evening, selectmen approved a preliminary tax increment financing application for GIRI Oxford I LLC, once again paving the way for Hampton Inn developers to retain some of the taxes generated through property development.

The move keeps a $15 million, 93-room hotel project — deemed a catalyst for economic development in the region — trudging along despite delays.

The preliminary deal is not a final contract. Town Manager Michael Chammings said after the meeting that an official agreement is expected in a few weeks.

The hotel project initially was expected to be completed by the end of 2014, though uncertainty about the prospects of the Legislature approving another casino in southern Maine is believed to have made developers wary of the risk. 

Ash Sangani, president of GIRI Hotel Management, said by phone Thursday evening that he could no longer commit to an initial estimate the hotel would be running by the end of 2015. GIRI purchased several acres from Thurlow Family LLC in 2013, and is developing the hotel. Permitting was completed by Casalinova Development Group of Oxford. 

Sangani said the harsh winter has delayed the project, which he expects to begin as soon as the weather breaks. 

“This is a project that’s going to go,” Sangani said.

Though the terms of the agreement are not yet known, they appear to be modeled upon the previous agreement, calling for tax revenue to be sheltered from state and local taxes for the next 15 years.

During that time, 20 percent of the taxes generated through development would be returned to GIRI, with the town using the remaining funds for infrastructure and economic development projects, such as sewer and landscaping. 

In an application dated Jan. 28, GIRI wrote that the funding was justified because there is no municipal water or sewer supply, utilities, sidewalks or roadways at the site.

In addition to 50 to 90 temporary jobs created through construction, the application indicates the hotel could create 23 part- and full-time jobs, from executive, administrative and clerical positions to maintenance and transportation. The salary level for those jobs varies between $25,000 and $80,000. 

In December 2013, the town signed its first credit enhancement agreement with Thurlow Family LLC, enabling them to retain some of the property taxes generated as a result of the development. 

That deal was contingent upon the value of the land increasing to $10 million by April 1. However, since announcing earthwork last spring, no groundbreaking or construction has occurred.

If town officials choose to mold the new agreement upon the old, taxes generated through development would be set aside in a special account under town control. 

The town intends to use the tax revenue from the deal to cover its debt service on its $24 million sewer project.

On Thursday, selectmen agreed to take out the second “half” of a $13.7 million loan from Androscoggin Bank in order to finance the project.

The maturity date on the $5.3 million loan is Feb. 26, 2016. The funds are borrowed in anticipation of repaying them with a $10.3 million grant from the federal government.  

Selectmen previously said that the hotel taxes would help them cover the loans, but repayment is not tethered to its completion. 

ccrosby@sunjournalmediagroup.net 

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