
Work on the New England Clean Energy Connect hydropower converter station off outer Main Street in Lewiston was considered more than half complete this past summer. The City Council on Tuesday approved a tax increment financing district for the project that is estimated to produce $1.4 million in revenue annually to be used for economic development staff and programs. Russ Dillingham/Sun Journal file
LEWISTON — The City Council approved the creation of a tax increment financing district Tuesday for the New England Clean Energy Connect converter station under construction off outer Main Street.
The district is designed to capture millions in value from the Central Maine Power converter station project that will be used to fund economic development staff and programs over the span of the 30-year TIF.
Officials supported the proposal unanimously Tuesday, arguing that the TIF district would save local taxpayers millions over the next three decades.
According to city staff, $84.4 million in valuation from the $340 million project will be sheltered from the state, meaning that portion of new value will not impact local aid to education, municipal revenue sharing, or county tax.
Nate Libby, director of economic and community development, said the new TIF would essentially replace a Walmart distribution center TIF district that expired in 2024, which had similarly been used to fund economic development staff and programs. Libby said as proposed, the NECEC TIF would fund many of the same items as the Walmart TIF, plus more.
He said it would shift more of the cost of municipal staff engaged in economic development work, including some administration, planning, code enforcement and marketing positions, from the annual budget to being TIF funded, providing savings to Lewiston taxpayers.
It would also shift some planned and future capital expenses related to economic development from the annual budget and bonding to TIF funds.
Libby told the council Tuesday that the NECEC project, which was immensely controversial, is being paid for by Massachusetts ratepayers, and that the revenue will be used for programs like a business development fund and downtown economic development efforts.
According to a memo to the council, the project is expected to be valued at $340 million when complete. The TIF would capture 55% of the remaining $153.5 million in future anticipated valuation and shelter that value.
Libby said that means that $255.5 million of the project’s valuation will generate tax revenue to support the city budget, while $84.4 million in valuation will generate revenue that supports economic development through the TIF.
Councilor David Chittim pointed out that over the life of the TIF, it will fund roughly $25 million in employee salaries that would otherwise be paid for by local taxpayers.
Councilor Josh Nagine said the funding for economic development is “important to the future of the city, and its goals.”
“Anytime we can reduce the burden on the taxpayers, it’s something I will vote for every time,” Councilor Michael Roy said.
Libby said no part of this tax revenue will be reimbursed back to the project developer in the form of a credit enhancement agreement.
Once the project is completed, it’s estimated that the TIF will provide $1.42 million in annual revenue beginning in fiscal 2027. The TIF would run for 30 years, until fiscal year 2055.
The converter station for the 145-mile NECEC corridor is made up of four transformers located off outer Main Street, which will receive direct current power from Canadian hydro stations and convert it to alternating current power suitable for residential and commercial needs.
As of July 2024, the converter station construction was considered more than halfway complete.
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