The Bangor City Council is wise to aggressively market its property adjacent to the Penobscot River. As the economy begins to recover, the depressed real estate market will rebound, and demand will return and drive up prices. Buyers will be motivated to purchase before values rise too high.
The city’s Economic and Community Development director, Rod McKay, is wise in wanting to act now. The riverfront area essentially has been showcased to many thousands in the past few months through the annual American Folk Festival and the series of outdoor concerts sponsored by Hollywood Slots. “For sale” signs are a small first step.
Of more importance is what the city can get out of the interested developers beyond the purchase price. The right mix of commercial development can have a synergistic effect on the downtown area. The wrong mix can weaken the downtown.
One school of thought holds that a municipality should seek to control as much of its economic destiny as possible, and selling key properties near public areas undermines that leverage. But critics of such a philosophy would argue that the city should not be in the real estate business. Rather, they would say, municipal government should get out of the way and let private investment create opportunity.
A middle way would be to enter into long-term leases on the land. Many regional and national chain businesses prefer to lease buildings or land because of tax advantages. As long as the lease runs for at least 10 or 15 years, with an option to renew, businesses will embrace such a relationship with a municipality.
Though zoning requirements dictate what sorts of activities are allowed in the properties, the city also could pursue a contract zoning arrangement. This legal mechanism involves a negotiation between developer and city, with the city having control of some of the finer points of the project, to whatever level of detail on which common ground can be found. Under such an arrangement, the city could dictate such details as the color of the siding on buildings, as long as the developer agreed.
Since any commercial endeavor on the city properties will benefit from their proximity to public facilities — parks, parking lots, stages, etc. — the city should not be afraid to exert its influence. Criteria to weigh could include the kinds of businesses that are family-friendly and would co-exist well with public parks.