PARIS — During a tax increment finance (TIF) district presentation, selectmen learned a manufacturer is interested in coming to Paris if the town’s current TIF district is expanded. Selectmen voted to begin analysis of the current district.

At the Monday, Sept. 26 selectmen’s meeting, the board heard a presentation from Matt Eddy, economic development director for Kennebunk, who works closely with Community Concepts. Glen Holmes, economic director of Community Concepts Finance Corp., was in attendance and shared the news regarding the manufacturer with selectmen.

Currently the town’s TIF district stretches along Route 26 up to KBS Building Systems, according to Town Clerk Liz Knox.

“We have been speaking with an organization that would like you to expand that TIF into a different area from where it currently is,” Holmes said. “It’s extremely reputable and a large company and they’re manufacturing jobs. … They have chosen South Paris as a choice of where they’d like to be.”

“How do we start that conversation?” Selectman Scott Buffington asked. “I don’t want you to keep it in your little circle.”

Holmes answered as soon as the town wants to move forward, he can connect with the interested business officials.

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Selectman Chris Summers made a motion for the town to spend up to $1,000 from the contingency fund by Tuesday, Oct. 11, to begin the evaluation of the town’s TIF situation. The board unanimously voted in favor.

Town Manager Vic Hodgkins said he was meeting with former Interim Town Manager Sawin Millett later last week to discuss Millett’s research he conducted on the town’s TIF district.

As for the presentation, Eddy told the board, “TIFs grew out of needing economic development” during the 1980s. In addition to establishing a business TIF district, municipalities can establish a residential TIF district, but those aren’t as popular in Maine, he said.

TIF districts are locally managed and municipal officials work with the Maine Revenue Service. Normally, they are set up to last 10, 15 or 30 years.

“You really need to lay out up front what you want to achieve,” Eddy told the group.

This includes developing a strategic plan (Sandy Swett penned one for Paris in 2014), identifying TIF area, looking at the assessed value for buildings and land and potential for new value in the district.

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Municipalities must establish two funds to go with their TIF district, he added. They include a sinking fund to pay for interest and principal payments for projects and a project cost account to cover payment costs established in the financial plan.

TIFs usually have three types of program assistance. They include credit enhancement between the town and business, infrastructure improvements made by the town and supporting economic development programs, according to Eddy.

One of the benefits of creating a TIF district is the tax shift. He said the new value of the district is “sheltered or hidden” and not included when it comes to state revenue sharing and school district and county tax contributions.

In Kennebunk, there are three TIF districts covering four areas of the town and a resurgence in the downtown has occurred because of the TIF, Eddy said. Previously there was a 30 percent vacancy rate for downtown.

“We’re full. People love it. We’ve built some unusual structures in from donations of people who have money. It’s just been a tremendous recovery. We knew if we did it right, they would come and they did,” he said, adding the town is now looking to expand buildings in downtown. “You have to keep the vision there. To keep the vision there, you have to have a strategic plan to do it.”

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Authorized project costs for TIFs

Information provided by Kennebunk Economic Development Director Matt Eddy.

Tier 1

Acquisition or construction of land improvements, public ways, building structures, equipment, arts districts, new or existing recreational trails, transit-oriented development activities.

Tier 2

Necessary improvements outside of the TIF district, or establishment or operation of something inside the district:

  • Water
  • Sewer
  • Electrical
  • Fire stations
  • Streets
  • Drainage ways

Tier 3

Costs related to economic development activities, environmental improvements, fisheries and marine resource projects, expanded transit service, recreational trails, child care and employment training.

Tier 4

Costs of constructing or improving facilities leased by a state or municipal government.

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