AUBURN – Tax incentives approved Tuesday for a 1.5-acre parcel near the Turner Street entrance to Lowe’s Home Improvement Center clear the way for a proposed hotel.

The city’s economic development director, Roland Miller, said crews will get started right away back-filling the parcel on the west side of Turner Street.

“They need to bring the grade up to street level, and that’s going to take some filling,” Miller said. He expected crews to sculpt the site this fall, beginning work on the hotel next spring. The hotel, likely a Marriott Courtyard, could be open in 2009.

Councilors needed to rearrange the city’s tax increment finance districts to make the deal happen.

First, councilors had to pull the 1.5-acre parcel out an existing TIF district created in 2002 to pay for road improvements along Turner Street and Mount Auburn Avenue. The lot is valued at $4,900 and removing it won’t affect the other district, Miller said.

Then councilors had to create a new TIF just for the parcel. It will be identical to a $3.3 million TIF created in 2006 to spur development at the mall, returning $1 million to the developer to pay for development costs and $670,000 to the city for administrative costs.

Developers will combine the 1.5-acre parcel in the new TIF with a 1.7-acre Androscoggin Plaza parcel to build the hotel.

“The hotel will sit right on the border between the two lots, part of it in both TIF districts,” Miller said. It will involve demolishing the Androscoggin Plaza building – which once housed Androscoggin Bank, AAA and a photo-finishing business – relocating a sewer line, building a new access road and a retaining wall.

“It’s an expensive project for the developer, and the only way to make it happen is to provide some city assistance,” Miller said.

Downtown not ignored

But Miller denied charges that building a mall-area hotel signaled the city was ignoring downtown redevelopment. In an open letter to the City Council, developer Lee Griswold argued that more TIF incentives were unnecessary for the mall.

“There is plenty of justification, financial and otherwise, to build the hotel without this additional benefit,” Griswold wrote. “Furthermore, the beneficiary has more than enough resources to build its hotel without having to rely on public subsidy.”

Griswold, through his Riverwatch LLC, owns and operates the Hilton Garden Inn hotel in Great Falls Plaza. That development, as well as a proposed office development and a parking garage, was boosted by city TIFs and capital improvement bonds.

Miller said the city had already agreed to support hotel development in the mall area when it created the 2006 TIF.

“But what we didn’t know was what site the developers would select for the hotel,” Miller said. Now that developers have picked their site, Miller said the TIF simply follows through on past council decisions.

“The deal we made was with a gentleman investing millions and taking a long view on what he would get back,” Miller said. “You cannot expect people to invest that much money and not get back some of that.”