Loading...
HomeMy WebLinkAbout2008-01-09 Business and Economic Development Committee Minutes � �' BUSINESS AND ECONOMIC DEVELOPMENT COMMITTEE ]anuary 9, 2008 � . Minutes � Councilors:. Palmer, D'Errico, Wheeler, Farrington Staff: McKay, Barrett, Heitmann, Bolduc � Others: Members of Maine Secure Composites 1. Amendment to the Bangor Pine Tree Zone for Maine Secure Composites, � LLC Bolduc said this item is for consideration and recommendation to the full City � Council at which time there will be a public hearing as part of the State's requirement for amending a Pine Tree Zone. Maine Secure Composites is requesting permission to expand its boundaries to include leasing a 4,200 sq. ft. � building on 154 Hildreth Street. At their Orono site, Maine Secure Composites has been in research and development of a product to manufacture an intrusion resistant shipping container, and they are now ready to move into the ' manufacturing stage at the Hildreth Street location. The units will be lighter than current steel containers with an embedded security system to detect intrusion. Maine Secure Composites currently employs 5 fulltime employees, 6 part-time, � and expect to expand to 10 fulltime employees by the end of a two-year period. � Ryan Fisher and associates from Maine Secure Composites addressed the committee and thanked Bolduc for his assistance and hard work on the project. Representatives provided an overview of the company and samples of the � materials to be used for the containers. Maine Secure Composites has been awarded a $1.9M contract to perform the work for the air cargo and shipping containers. There is also a possibility of a $15M contract over a five-year period. � Palmer noted that Farrington joined the meeting. 1 Responding to Palmer, the Department of Homeland Security has found that one of the weaknesses in defense is in shipping containers. Because these new units are 15% lighter, there has been a huge interest expressed. The actual materials � are fiberglass and resin. Maine Secure Composite's main goal is to create jobs in Maine and in the next two years will develop a manufacturing line. Farrington � asked if the containers are recyclable and was told that the life of the containers is 10-15 years. The containers are sometimes sold on shore to construction companies in the United States. Anthony addressed Palmer's environmental concerns. � . � � � A motion was made and seconded to approve stafF's recommendation. The item � will be forwarded to full Council for final action and for public hearing. Palmer suggested that the Committee would like to have a tour of the site when ready. � Anthony agreed. 2. Mall Area Tax Increment Financing (TIF) Districts � A. Mall Area Conservation Improvement Tax Increment Financing (TIF) � McKay said Council has taken previous action to instruct staff to prepare TIF � districts in the Mall area to support conservation and mall management efforts in the Penjajawoc Marsh watershed and to provide additional funding for off site � traffic improvements required by Walmart's traffic permit. As a result of Walmart's impasse for their first application the City understood the two difFerent interests — development and environmental — and created a task force involving � the stakeholders to see if a solution could be reached. The task force issued a report in May of 2005 which was subsequently adopted by the staff. An Order was then passed authorizing the City to adopt the report's recommendation. � Part of it was to establish a Mall Management Conservation Fund to be funded through 25% of the new tax revenues from development for a ten-year period in the study area looked at by the task force. It would be used for conservation , measures. One of the mall area development district the City wishes to adopt is a TIF district. Because not all development occurs at the same time, a new TIF district will need to be adopted as each development occurs. The Widewater � development is underway and the City needs to adopt a TIF district for the Widewater Development prior to April 1, 2008 to capture the first year of new � tax revenue generated by the project. It consists of Home Depot and also two out buildings which create a new tax value increment of $10,300,000. This will • generate new tax dollars to the City of $194,000. Staff proposes to capture 25% � of that for conservation efforts at $48,000 for the Mall Management Fund. Those funds will go into the fund for a ten-year period. A motion was made and seconded to recommend approval to the full Council at � its upcoming meeting. � B. Mall Area Traffic Improvement Tax Increment Financing (TIF) This involves the Walmart Supercenter. When this project was being permitted, � Walmart had obligated itself for $3.2M of ofF site improvements in the Mall area. During the permitting process, the State DOT came up with $1.5M in additional � required trafFic improvements. Wal-mart had already agreed to over $3 million in off site traffic that it anticipated would be required, and did not anticipate the . additional required work. At that time, Walmart asked the City if it would consider assisting with the additional costs. The Council took action assuring the � MDOT that it would fund those additional trafFic improvements which benefit the �� � � � entire Mall area. It will also facilitate additional Mall area development. Mall Area Impact fees are available, contributions are being made by WalMart of � $250,000 and Eremita and Valley will contribute $70,000. The City proposes a TIF of $1,050,000. It would involve capturing 25% of the new taxes generated by WalMart over the first ten years of its development. Because WalMart has not � started construction, McKay said this doesn't have to be approved by April 1, 2008, but he would like the Council to authorize the City Manager to submit the application when WalMart does move forward. The application will not be � submitted until the appropriate time. � Heitmann has advised McKay to add a provision whereby should the 25% TIF funds and the 50% TIF funds the City would capture would not be needed in the Mall area it could be used for various public infrastructure improvements in the � downtown area. Farrington asked about the 25% and 50%. Heitmann explained that 25% of the � new revenues for any new development within this area goes to the management fund. The 50% TIF will be sufficient enough to the ofF site infrastructure improvements due to the WalMart project. The other 25% is � associated with acceptance of the Task Force's recommendations for environmental issues. The Home Depot project will not have a 50% TIF because no off-site traffic improvements are needed. Heitmann said generally where the � property tax money used for specific purposes will be used for purposes that would otherwise come from the General Fund of the City. The benefit of creating a TIF is because the value of the new development will not count when � the State determine Bangor's value in their formula for School funding, county budget, etc. Barrett said 25% of the new property taxes will go to the General Fund. � Farrington made a motion.to accept staff recommendation for Items A. and B. � and it was seconded by D'Errico. The item will be referred to the January 28, 2008 Council meetin,g. � Wheeler discussed the 25% and 50% capture rates. Looking at the assumptions of the annual increase in value and in the tax rate, he asked the difFerence between the commercial property tax valuation and the personal property tax � valuation. Barrett said the City basically looks at past history and the 1% over a period of time is probably a conservative estimate in terms of growth and value depending on the market. TIF Districts have almost always outperformed the � City's estimates. � In response to D'Errico; McKay said this process has been used several times in the downtown area; i.e., the Shaw's Main Street development, the Freese building, General Electric, the Waterworks. Barrett discussed some of the other � � i major improvements at the Mall area including Kittridge Road relocation and the � Hogan Road Extension and dealing with the intersection of Hogan/Springer/ Bangor Mall Boulevard. Wheeler thanked stafF for the information and update. , A motion was made and seconded to adjourn. � �� � � -� � � � � 1� � � � . � � �