By Rick Wright

Staff Writer

South Portland Planning Director Tex Haeuser has a dream. He envisions a day when trolleys will carry hundreds of people over city streets like they did many years ago.

Haeuser’s dream may be one step closer to reality after the South Portland City Council’s unanimous vote Feb. 17 to establish a transit-oriented municipal development and tax-increment financing district, or TIF. 

Money in the new transit district could go to infrastructure for more bus routes, bike paths, bike racks, walking trails and perhaps trolleys. It’s designed to give people an alternative to automobiles, Haeuser said.

The district would be comprised of 15 parcels scattered throughout the city from Front Street on the east end to Gorham Road near the Maine Mall. Ten of the parcels are commercial properties. The rest are residential properties, Haeuser said.

When property owners within these parcels improve their properties the value will increase just like they would in any other location. The increased value will be determined by the city’s assessment office. 

If a property owner increases the assessed value of his property in the district by $100,000, his annual property tax bill would increase by $1,470, according to a letter Haeuser sent to property owners Feb. 10.

One quarter of the $1,470 would go to the transit TIF fund, and the rest would go to South Portland’s general fund for other city expenses.

“In these trying budgetary times, we didn’t want to over-impact the general fund. We figured 25 percent is a reasonable amount,” Haeuser said.

To comply with the law, the city must reinvest TIF money into the district to encourage economic development.

The council’s action authorizes Haeuser to apply to Maine’s Department of Economic and Community Development for state approval. Haeuser said he will submit the application April 1.

Orono has an application pending for a TIF transit district with the Maine Department of Economic and Community Development, according to Haeuser. As far as he knows, it’s the only other such application in the state.

Haeuser said it would take the department a few weeks to approve the application and he anticipates no problems with the process. The city will be able to implement the transit TIF immediately following approval, Haeuser said.

Transit TIFs are relatively new and were legalized by legislative action last summer. 

“This new law would allow the city to use tax-shift subsidized funds to improve transit services in the city,” said City Manager Jim Gailey in a position paper prepared for the council.

The council first discussed this issue at a workshop last December. 

“This is an economic development tool. The TIF will encourage more transit services, thus stimulating more economic growth,” Haeuser said. “We’re trying to lay a foundation for future growth.”

“There is no difference to you,” Haeuser wrote, “You (property owner) are still paying your taxes in the same way as usual – but in terms of the city’s accounting some of the funds are going to a different place in order to provide better transit services.”

Annual TIF revenues are capped at $240,000 for the first five years. The cap is inflated by 1 percent every year thereafter until the TIF district expires after 30 years. 

“This is sustainability policy-making that puts us on the map,” said City Councilor Patti Smith. “This is the broadest brush you could use for improving the quality of life.”

The TIF revenue could also be used for bus driver salaries, gas, new buses, maintenance and other operational expenses, Haeuser said.

“This is an incredible project. It gets the idea of this transit district on the books in South Portland. We believe in transit. We believe it’s the right way to move people from one place to another,” said City Councilor Linda Boudreau.

Rick Wright can be reached at 282-4337, ext. 237 or news@inthesentry.com.