Lincoln considers giving Bangor Natural Gas a tax deal on pipeline to mill

By Nick Sambides Jr., BDN Staff
Posted Sept. 10, 2013, at 6:02 p.m.

LINCOLN, Maine — Town leaders will consider allowing Bangor Natural Gas to reinvest 90 percent of the town property taxes it would pay on a natural gas pipeline to Lincoln Paper and Tissue LLC into the line’s construction, officials said Tuesday.

Set to be completed next year, the pipeline connection to the mill is the first of three steps that could lead to residents, the town and businesses saving 35 to 50 percent on heating costs and new businesses flocking to the Lincoln Lakes region, Town Manager William Lawrence said.

“It’s a win-win for all those involved,” Lawrence said Wednesday of the tax increment financing proposal and the pipeline. “We feel that this is such an economic driver that we agree” to the terms of the deal.

The Town Council must vote to approve the TIF deal before it will happen. The council will hold a public hearing on the proposal on Oct. 21, Lawrence said.

Council Chairman Steve Clay supports the agreement.

“It is a pretty good deal for the town overall because they made the guarantee that every bit of the money they get back they will put toward expanding the gas lines in Lincoln,” Clay said.

A tax incentive program for economic development available to all Maine local governments, a TIF permits a business and a municipality to use some or all of the new property taxes that result from an investment project within a designated district to assist in that project’s expenses and to generate economic development funds for the municipality. TIF agreements typically run 10 to 30 years.

The town has had several TIF agreements with local businesses. Most have granted the businesses a 60 or 70 percent share of the property taxes withheld. This would be the first set at 90 percent, Clay said.

Officials eventually could hook town buildings and schools into the line, producing more savings for taxpayers, Clay said.

Exactly how much in property taxes Bangor Natural Gas would pay for the line will be announced at the hearing, said Ruth Birtz, the town’s economic development coordinator.

Bangor Natural Gas officials did not return a telephone message seeking comment.

In the case of the proposed Bangor Natural Gas TIF, Lincoln would retain 10 percent of the company’s property taxes. The town could use the money to fund improvements to the town’s industrial park, airport or any other town tool for enhancing economic development, such as ATV and snowmobile trails.

Gov. Paul LePage made extending a natural gas pipeline into Lincoln and the Katahdin region towns one of his administration’s goals in 2011. The paper mills in Lincoln, East Millinocket and Millinocket were expected to anchor the line.

Katahdin region officials have expressed hope that the gas line would spur much-needed economic development in their towns, but a Bangor Natural Gas official has said that the company has not committed to that yet.

All of its resources, he said, first are devoted to establishing the Lincoln line from the Old Town area. Lincoln Paper and Tissue announced its deal with Bangor Natural Gas on June 7. The line is tentatively set to run into Lincoln from Chester under the bridge on the access road to the mill sometime in 2014, Lawrence and Birtz said.

Residential and business connections would follow sometime after that, possibly as late as 2016, officials have said.

Bangor Natural Gas officials told town leaders that they are eager to begin line construction, Lawrence said.

“They are ready to go now but they have to wait for the public hearing,” he said.

http://bangordailynews.com/2013/09/10/news/penobscot/lincoln-mulling-90-percent-tax-break-on-natural-gas-line/ printed on April 18, 2014