DOVER-FOXCROFT, Maine — A wrinkle in the administration of tax increment financing in the Unorganized Territory has prompted the Appalachian Mountain Club to put a hold on its pursuit of a TIF district in Piscataquis County.
As a result, the Piscataquis County commissioners have postponed the two workshops on the proposal scheduled for Sept. 8 in Greenville and Sept. 9 in Brownville Junction.
“It was brought to our attention at the eleventh hour here that there had been a change in the TIF law that we hadn’t understood how it was being interpreted,” Gerry Whiting, AMC’s special projects manager, said Thursday. “We want to understand that wrinkle better and understand how best to move forward and serve the vision that we have to help the county with its nature-tourism effort.”
Piscataquis County Commissioner Tom Lizotte said Thursday that he supported the stay in action. “I think the Appalachian Mountain Club is doing exactly the right thing putting a temporary hold on it, assessing the situation, before they move forward,” he said.
The not-for-profit club, which owns about 37,000 acres in neighboring Katahdin Iron Works, plans to purchase 28,000 acres in the Roach Pond area. The club sees the new acquisition as an opportunity to protect from residential development the corridor of land from Katahdin Iron Works to Baxter State Park and Katahdin.
Having its land designated as a TIF district would help AMC obtain a low-interest, tax-advantage financing program for the estimated $45 million Roach Pond tract purchase and the planned $3 million in improvements at its three wilderness camps: Medawisla Wilderness Lodge, Chairback Mountain Camps and Little Lyford Pond Camps.
For its investment, the club would be eligible for the New Markets Tax Credit program, which is an opportunity to receive a credit against income taxes. At the same time, AMC officials said the county would benefit from the new taxes on the improvements, which would be channeled back into county coffers for nature-based tourism, trails and marketing. Such a TIF could bring the county about $500,000 over the 30-year term, the commissioners were told last month.
When the proposal for the TIF district was aired at the commissioners’ meeting last month, neither AMC nor county commissioners were aware the Legislature basically had cut off eligibility for any TIF projects in the UT after July 1, 2008. It was when the commissioners asked Maine Revenue Services to help guide them through the process that they learned of the change, according to Lizotte.
Lizotte said while Piscataquis County could pursue and pass a TIF district for AMC or anyone else in the UT, the change means the TIF would sit idle and the state tax assessor would be unable to pay out any funds from the TIF project.
That move by the Legislature came after two large wind power projects were approved in the UT in Washington and Franklin counties, Lizotte was told. Because the TIFs in the UT were new and involved a lot of money, the Legislature’s Taxation Committee wanted time to review the process. A special task force to study the issue is expected to give the Legislature some recommendations in 2010.
“It’s good to know the impact of the statute now rather than to go any further in the process and find out we would be stymied eventually,” Lizotte said.
Whiting said AMC plans to proceed with the purchase and the improvements, as well as the TIF, but needs time to research the change and how it might affect the project. AMC plans to make the purchase through capital campaign fundraising and financing.
“The perception is that AMC is getting this huge tax break here and I don’t believe that’s the case,” Lizotte said of the club’s TIF request. He said the workshops would have helped educate residents about the project and the TIF. “I would hope that people would not prejudge anything until they had a chance to hear what the Appalachian Mountain Club plans to do.”
Lizotte said AMC has proposed a major investment in Piscataquis County in land purchases and improvements. “I don’t see anyone else looking at putting that kind of money into the county, so I think we have to maintain an open mind on this project,” he said.
“I think there is a benefit. It is taxable property and they do bring people from outside of our area to Piscataquis County,” Lizotte said. “I think we need to decide whether we really want to embrace visitors or not.”