Waterville City Council Approves Tax Increment Financing to include housing

Recently, Waterville city councilors unanimously voted to change a policy dealing with tax increment financing (TIF) to include housing. TIF is a public financing method that is used as a subsidy for redevelopment, infrastructure, and other community-improvement projects that often benefit and incentivize the businesses these taxes are coming from. Through the use of TIF, cities reroute future property tax revenue increases from a defined area toward an economic development project or public improvement project in the community. On March 1, the unanimous vote followed a brief discussion about a request for a TIF in order to develop the former Seton Hospital on Chase Avenue into housing and offices. City Manager Michael Roy said the city’s TIF Advisory Committee recommended housing be added to the city’s policy, which did not include a provision for considering housing-related TIF projects. This recommendation had, already been posed in 2014, when developers planned a housing project for the former St. Francis Catholic Church property on Elm Street and wanted it to be eligible for a TIF for a possible expansion of the project. The location is close to the downtown area and near several of the buildings that Colby purchased this year. However, the council rejected this proposal.

TIF policy is in use in several towns and cities across Maine, including Portland and Freeport, both of which have been praised for their strong community institutions and local infrastructure.

The change to TIF policy will greatly affect Waterville, as it allows the city to consider approving housing TIFS. City Manager explained to the The Kennebec Journal that they don’t know for sure yet if Seton developers definitely are planning to ask for a TIF.

Councilor Sydney Mayhew, (R-Ward 4), explained that Collaborative Consulting, which is a technology company that designs, builds, and implements strategic solutions to create business advantage, is planning to bring 200 jobs to the city in the next few years and other developments are being planned. Therefore, the need for high-end housing is strong. Mayhew said that he surveyed the neighborhood surrounding the Seton Hospital and majority of residents expressed their support of the project and said that they want to see it happen. The new housing will help generate taxes Mayhew also explained.

This change to TIF policy could also affect Colby, its properties in downtown Waterville and the partnership for revitalization between Colby and the city of Waterville. With the recent and upcoming influx of investment in the area, losing valuable potential high end real estate could conflict with Colby and Waterville’s goals for the city.

The taxes generated by this new real estate could have a huge impact in Waterville, where low income housing is always in demand. The community development aspect of TIF is also promising, as the Waterville library has been a hallmark in the community. More investment into community institutions could prove to be transformative for the larger Waterville community, which will in turn can positively affect Colby’s aspirations for Waterville. TIF has the potential to attract new businesses to Waterville because of the benefits of participating in TIF, which is a goal for both Colby and the city of Waterville.

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