Faced with the aftermath of a deep recession and an area of town that city leaders really wanted to see developed, Augusta offered tax breaks 25 years ago to the developer behind the Marketplace at Augusta off turnpike Exit 112.

Later, in a retail development known as Augusta Crossing three miles south at Exit 109 — anchored by Target, Lowe’s and Best Buy — the city didn’t offer any help.

That’s a decision city councils have to make, said Keith Luke, Augusta’s deputy director of development services.

“Especially as projects develop and become successful, it can be easier to look back and criticize, ask whether or not the incentive was necessary,” Luke said last week. “I think those difficult questions are always asked both going forward and on a retrospective basis, and that’s what city councils do, whether it’s in Augusta or Lewiston or Portland. It’s a political analysis that needs to happen and it’s a case the developer needs to make on a case-by-case basis.” 

Augusta created its first tax-increment financing district in 1990 for the Marketplace development. The area was ledge and woods, and city leaders wanted to see retail life.

“The notion back then (was) without this credit enhancement, without this support, that the development in the North Augusta district would not happen,” he said. “To some degree that seems unimaginable now, but if you talk to political leaders from that era it was a very necessary incentive to promote development in that part of the city.”

A portion of new taxes was returned to the developer to offset site costs. From the city’s perspective, it paid off, according to Luke.

“Tax revenue, development and jobs, certainly I would say has matched the development goals of leaders in that era in particular,” he said.

A new developer bore all the site work costs for the newer Augusta Crossing, which includes a large retaining wall. That project is also in a TIF, but not one that benefits the developer. Instead, the city set that one up to grab a portion of new taxes specifically to be spent on benefiting its downtown, Luke said.

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