June 23, 2018
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Upgrades and subsequent bills inevitable, say Portland businesses

By Matt Wickenheiser, BDN Staff

PORTLAND, Maine — There’s a vast entertainment complex off Riverside Street which includes indoor soccer fields, an amusement park for children, a laser tag course and mini-golf.

Jokers, the Turf Sports Grill and Portland Sports Complex all are contained in about 100,000 square feet of building space, serviced by a 300-car parking lot that’s often packed.

It’s a thriving business and a popular destination for families and athletes, but it’s also roughly 3 acres of impervious surface area — roofs and pavement that shed thousands of gallons of water into Portland’s storm drains when it rains. During heavy rains, the system can be overloaded and a combination of raw sewage and stormwater is shunted directly out to waterways. In coastal Portland, that means raw sewage makes its way into the Atlantic Ocean.

Portland is under a legal agreement made in the early 1990s with the federal government to fix that problem. It has spent $76 million on solutions since 1993, has an additional $18 million in the pipeline for the near future and estimates it has another $170 million to spend down the road. To pay for the necessary infrastructure upgrades, a task force has recommended increasing sewer fees and charging property owners based on the amount of impervious surface, such as roofs and pavement, they have on their land.

Among Portland business owners and developers, there’s a sense of inevitability around these pending fees. They know the fees are coming. They know it has to be done, and the end goal is clean water. But they’re not necessarily happy about the increased costs, and say they hope there will be ways to mitigate the impact.

Jim Gratello, co-owner of Jokers, the Turf Sports Grill and Portland Sports Complex, estimates this new charge would cost his business almost $20,000 annually, “which is outrageous.”

“I was the mayor of Biddeford. I know how this works; it has to be done. It’s the right thing for the environment, the right thing for business to do,” said Gratello. “But they haven’t done it for 200 years; don’t try to do it all in two years.

“We’re willing to play our part as long as our part is reasonable and we have options.”

Gratello noted the impervious surface fees would be phased in gradually, over a few years, so his business wouldn’t get hit immediately with extra costs of $20,000 annually.

But he argued that if the goal is to keep untreated water from entering waterways, property owners should be rewarded for taking steps to do so. For example, he has land behind the developed property where he could put a retaining pond for about $50,000. Stormwater would be held there, slowly released into the water system instead of overwhelming the city’s pipes.

“If the ultimate goal is to treat the water, then don’t charge me if I treat it for you,” said Gratello.

The goals are multiple, however. The city not only wants to keep untreated water from entering the environment, but it also wants to pay for the $170 million in upgrades. The task force recommended providing credits for any on-site mitigation — from rain barrels used by homeowners to massive retention ponds at office parks — but capping those credits at half the total stormwater charge. The goal would be to have funds for the upgrade while giving businesses and homeowners a break.

Gratello also suggested the city could help businesses fund these site improvements through a low-interest loan program.

Vincent Veroneau, president and CEO of J.B. Brown & Sons, a Portland developer and property owner, served on the task force. He noted that about 50 percent of the cost of the upgrades will be covered by sewer fees and about 50 percent by the impervious surface area fee proposal. That, said Veroneau, reflects the nature of the piping in Portland — about half is sewer and half is stormwater.

The task force was given the job of figuring out how to cover the $170 million price tag in an equitable way, said Veroneau.

“I think it’s fairly balanced and fair to the property owners and users that generate flow into the system,” Veroneau said. “It’s a fairly broad-based funding of all the stakeholders — residents, business, sewer users, stormwater users.

“I think everyone recognizes that it’s a cost that needs to be covered.”

Veroneau suggested that those with any longevity in Portland see the benefits of the upgrades, and of the payment plan. He grew up off the Back Cove, Veroneau said, and the improvement in that body of water over the decades has been impressive.

Asked if he thought the extra fees would deter new business growth and development, he paused.

“I think it becomes a cost of doing business, and other communities are going to have those same cost hurdles,” said Veroneau. “Over time, things will even out.”

Morris Fisher, president of CBRE-The Boulos Co., said there is some unhappiness among Portland’s developers.

“I think what probably bothers the development community the most is for many, many years we’ve been complying with the stormwater regulations the state and local authorities have been asking us to. We’ve been investing money in taking care of our own stormwater,” said Fisher. “We’ve done what we’re supposed to do, and now they want us to pay again.”

The extra costs will be something that potential developers consider when they look at Portland projects, he said, though he didn’t know if the additional annual costs would deter development.

“If you could build in one town versus another, you might,” said Fisher.

He raised issue with the fact that the task force has advised against including roads in the calculation for impervious surfaces, which would include private and public roads and the Portland International Jetport’s runways.

Assessment for public roads theoretically would be paid for from the general fund, which would affect all taxpayers.

Like other business people, Fisher saw the $170 million price tag as inevitable.

“I’d love to say ‘I hate it, don’t do it,’” said Fisher. “But it’s going to happen. They are going to spend this money.”

Tom Brigham, co-president at Oakhurst Dairy, noted the price tag comes due to federally established requirements.

“Perhaps it would be good to have some federal funding to go along with them,” said Brigham.

Oakhurst, which has significant impervious surfaces including roofs over its downtown dairy and parking lots, would see this as an increased business cost, he said.

“Any added cost of doing business, particularly in today’s economic climate, just makes life more difficult for all businesses,” said Brigham.

One of the reasons the task force recommended increasing sewer fees and assessing new fees, rather than going in a new direction and funding the upgrades through tax increases, is that nonprofits and other tax-exempt groups don’t pay property taxes. CSO work done to date has been funded primarily through sewer fees. And the city has several such large properties with a good amount of impervious surfaces, including the University of Southern Maine, Maine Medical Center and Mercy Hospital.

According to the city, the largest amount of impervious surface is in single-family homes, with 23 percent of the total, followed by retail and professional buildings at 12 percent and offices and warehouses at 7 percent each. Tax-exempt organizations would fall into areas such as government at 8 percent of the total, religious properties at 1 percent, literary-scientific at 1 percent and benevolent-charitable at 3 percent.

Mercy Hospital’s new Fore River Campus, for example, has 37,000 square feet of impervious surface area.

Bill Connolly, a real estate specialist at Mercy who served on the task force, noted there are some businesses that contribute to stormwater runoff but pay no related sewer fees — parking lot operators, for example. Some businesses that use a lot of water but have little surface area, such as breweries, may see bills go down, he noted.

Various groups represented on the task force — for-profit companies and nonprofits included — saw the need for equity, said Connolly.

Mercy would wind up paying more overall than it does now in fees, but its costs will rise in proportion to other businesses and nonprofits in the city, he said.

“As a business we have to accept that somebody’s got to pay $170 million over the next 15 years or so, and it’s something worthwhile, in my opinion,” said Connolly. “It’s a federal mandate, but I think we understand that it’s something that needs to be done.

“There’s a chunk of change coming due that’s got to be funded somehow.”

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