Tuesday, June 14, 2011

PORTLAND DAILY SUN

Some councilors irked by ‘unusual’ special meeting
By Casey Conley
Jun 14, 2011 12:00 am

The proposed $100 million project at Thompson’s Point could fall apart if the city doesn’t act on $31 million in tax breaks by month's end, developers said yesterday.

Jon Jennings, a principal in the project known as “The Forefront,” said that “more than likely the project won’t go forward in Portland” if the tax breaks aren’t finalized by the end of June.

“We have asked for a time line that would get us through the process by the end of the month because we have some extraordinary costs we are obligated to do by the first part of July,” Jennings said.

He declined to comment on whether the project might move ahead in another municipality if it falls through in Portland.

Jennings added that the investment team behind the project must soon make a “sizable payment” on a 25-acre development plot, and that they won’t make that type of commitment unless “we know we are working in a cooperative fashion” with the city.

To that end, the city council held a special meeting last night that addressed the proposed 30-year tax-increment financing plan for the development, which would include a conference center, hotel, office buildings, a restaurant, and 3,500-seat arena for the Maine Red Claws minor league basketball team.

The special meeting caught at least one city councilor by surprise, and its timing was questioned by at least two other councilors.

The tax deal, which was endorsed less than a week ago by the city council’s Community Development Committee, would let developers keep $31.4 million out of an estimated $58 million in new property taxes over 30 years.

The city would receive about $26.4 million of that tax revenue spread over 30 years, minus 3 percent that would be set aside each year in a fund for transportation improvements.

If the site is left undeveloped, it will generate about $3 million in property taxes over the next 30 years. Currently, the parcel is home to a propane company and the rail authority that runs the Amtrak Downeaster train.

Thompson’s Point is located at the end of Sewell Street, just steps from the Portland Transportation Center, in the city’s Libbytown neighborhood.

A study commissioned by developers said the project would create more than 1,200 jobs during construction and sustain about 450 jobs each year afterward. The project is due to be completed in late 2013. Those figures could not be independently confirmed.

Regardless, some city councilors weren’t thrilled that a special city council meeting was called to give the tax deal a first reading, a step one councilor called “unusual.”

Major agreements like this one require two readings by the city council before a vote can be held.

“I do not see the need to move so fast,” Councilor John Anton said in an email. “The developer has yet to identify tenants for the office buildings and says that they can't close unless they have tenants. My understanding is that they have a $100,000 payment due to the seller, which I believe can be extended.”

“It is unusual,” Councilor Kevin Donoghue said of the meeting. “It is not yet known to me how or why the judgment was made that a special meeting was warranted.”

Mayor Nick Mavodones said he called the meeting on the request of the Community Development Committee. He added that he wants to see this TIF matter settled by the end of June.

Councilor Dave Marshall said scheduling the first reading for a special meeting was “not the cleanest way to move forward” but added that developers were pressuring the city to make a decision this month.

“It’s not common for the council to have special meetings to get a first reading on the agenda, and it’s really the desire of the developer to get the financing in place based on the pressure the developers are receiving from their investors,” Marshall said. “That’s what’s gotten the city to this place.”

Marshall said he was “not totally comfortable with the process being laid out” regarding the TIF discussion.

“I would prefer to follow the regular process, where we would have a regular first reading at a regularly scheduled meeting,” he said.

Developers say the tax-increment financing deal is necessary to offset higher-than-normal costs due to unusual soil conditions at the site. Also, upgrades at a railroad crossing on the site are expected to cost upwards of $1 million.

Speaking to city councilors yesterday, Jennings said the project would become a “true destination” in the city similar to L.A. Live, the development in Los Angeles that includes the Staples Center, home of the Los Angeles Lakers, among other venues. He and other supporters cite the project's proximity to multiple modes of transit and say it offers amenities not currently found in the Portland market.

The development is expected to meet LEED silver conservation standards or better, and include free public access to trails and a boat launch into the Fore River.

Jennings said developers have a “pretty aggressive time line” in place because the development window on a project like this can "open and close quickly." “Any number of things could impact (the project) if we extended it over a long time,” he told councilors.

At the special meeting and a workshop that preceded it, councilors inquired about potential demand for new hotels and office space amid high vacancy rates downtown and also wondered if the 3 percent figure to be set aside annually for transportation could be adjusted.

City economic director Greg Mitchell said the amount of money set aside for transportation each year could be amended up or down in the future. He phttp://www.blogger.com/img/blank.gifredicted the office towers at Thompson’s Point wouldn’t compete with vacant office space on Congress Street, and pointed to new hotel construction as evidence that the market needs more rooms.

Councilors didn’t take action on the tax break proposal last night. A vote on the issue is expected at the city council’s June 20 meeting.

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http://portlanddailysun.me/news/story/developers-thompson%E2%80%99s-pt-project-jeopardy-if-tax-breaks-delayed

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