Voters approve TIF proposal for Gray Village

Gray voters signed off on the proposal for a new tax increment financing district for the town's village area during a Feb. 14 special town meeting. The proposed TIF must still be approved by the state. 

GRAY — Voters decided on Valentine’s Day that they’d like to spend the next 30 years with a municipal tax increment financing district, or TIF, in the Gray Village area. 

About 30 people voted at the Feb. 14 special town meeting, with a clear majority raising the date-appropriate red cards to support the new TIF district. 

Gray Community Development Director Doug Webster said that one of the primary ideas behind the TIF is to leverage resources to help support public infrastructure projects in the town. 

He stressed that the proposed TIF is not expected to be a “magic bullet” in the funding equation “but it will be an integral part” in supporting those infrastructure projects, which could include an update to the stormwater system in the village, Route 115 improvements, sidewalks in various areas, culverts on West Gray Road, water mains, and possibly natural gas infrastructure. 

The vote means that the town will move forward with its application to the Maine Department of Economic and Community Development in order to form the TIF, which would be the third such district in Gray if approved by the state. The application is due March 1 and attorney Alyssa Tibbetts will be finalizing the materials to submit to the state. 

Tibbetts joined with several town staff members Tuesday night to give an overview of the TIF process as outlined in state law and the plan for the new district — as they did at last week’s Town Council meeting.

Tibbetts said that there are two elements to the TIF process, defining the physical district where increased value can be sheltered from state valuation, and a development program that lays out what the TIF will be used for, and the policies that will guide it. 

“The municipality … is designating an amount of tax revenue that is captured on increased value in properties in the district, from the date of the designation through the term of the district, that is sheltered and used for specified purposes that are authorized by state law,” said Tibbetts, a lawyer at the Portland-based firm Jensen Baird Gardner & Henry, which represents the town. 

She said that by applying by March 1, the town hopes to get approval for the TIF in time for the coming town wide re-evaluation. 

Town Assessor Lauren Asselin said hypothetically that if assessed values increase, the increased values on properties within the TIF  “gets sheltered or captured” and “put aside.”

“The town is able to then use that to fund the costs associated with the projects that are authorized within the development program,” Asselin continued, adding that the incremental increase within the TIF is also sheltered from state valuation. 

Town Planner Kathy Tombarelli emphasized that the new district would not change any of the existing zoning regulations for the area.  

The proposed TIF district would be in the Gray Village area and would include certain properties along five roadways converging in the area: Route 26 (Shaker Road), Route 202 (Main Street), Route 100 (Portland Road, Route 115 (Yarmouth Road), and Route 115/202 (West Gray Road).

Webster said that money from the TIF could be spent radiating out from the village along the five roadways, or “spokes” as he referred to them, which he said would broaden the impact of the district. 

The proposed TIF would span 30 years and include about 402 acres and an initial taxable value of more than $21.7 million.

“As long as you have a plan of how that money is to be spent, and it sounds like there is, it’s a no brain-er,” said resident Rick Leavitt. “It’s an obvious thing to do.” 

Tuesday night’s special meeting was not without debate, with several residents raising concerns about the plan to include three properties in the TIF that also sit within the town’s wellhead. 

Gray Water District Trustee Joe Murray, who said he generally thought the idea of the TIF was a good idea, objected to the inclusion of the wellhead properties on the basis that being in the TIF could encourage development on those properties – which he worried could pose a danger to the town’s water supply. 

“This TIF encourages development, and what you’re doing in encouraging development in the wellhead zone. And I think that, again, is a bad idea,” Murray said. “We only have one source of water here.” 

Webster said that the existing standards in the wellhead zone “are not going anywhere” regardless of the TIF. He also said that the three wellhead properties were added the proposed TIF district primarily because of their location and access to the Route 26 bypass in order to support potential development outside of the wellhead. 

James Monroe raised similar questions about the proposed TIF properties within the wellhead and offered an amendment to remove them from the TIF document. 

Monroe’s amendment received a vote and was not approved. The voters later approved the entire TIF proposal. 

Monroe also asked about how decisions about TIF spending would be made in the future. 

Town Manager Deb Cabana said that there are two different processes for expending funds from a TIF. 

“With this TIF, the Council can at any time enter into a credit enhancement agreement, and that basically is property by property — if there was some sort of development program that came up. And that would only happen with a public hearing,” she said.  

In regards to the Town Council expending TIF money, Cabana said that it has full legislative authority but cannot expend money in excess of 1 percent of the town’s operating budget.

According to Cabana, that means TIF expenditures “usually happened during the budget process that would be ratified by the voters,” which could also happen through a special meeting like the one held Tuesday night. 

Gray voters signed off on the proposal for a new tax increment financing district for the town’s village area during a Feb. 14 special town meeting. The proposed TIF must still be approved by the state.