LINCOLN, Maine — The first of five phases of construction of a $7.5 million natural gas pipeline could start in spring 2014 with the town paper mill as its first customer, its proponents told town leaders Monday.
The Town Council voted 4-0 on Monday to authorize Town Manager William Lawrence to open negotiations with Bangor Natural Gas Co. for a tax increment financing deal that would allow the company to invest in the line’s construction 90 percent of the property taxes it would have paid over 10 years.
The vote followed an hourlong public hearing. Councilor Shaun Drinkwater was absent. So were Councilors Michael and Marscella Ireland, due to Mrs. Ireland taking ill, officials said.
The town’s largest single employer, Lincoln Paper and Tissue LLC co-owner Keith Van Scotter, said he supported the TIF, from which town government would get 10 percent of the pipeline’s property taxes. The mill would realize substantial savings from the pipeline that would help keep it competitive, he said.
“I am here because we support this,” Van Scotter said of the mill. “We think that this is a win-win for everybody.”
If councilors approve the deal, Bangor Natural Gas would use the money that it would have paid in property taxes to help pay for construction of Phases II to V of the pipeline, which would conclude in 2023, said Andrew Barrowman, the company’s manager of sales and marketing.
Company officials would guarantee a matching dollar investment into the project of every dollar the company retained through the TIF, with a goal of investing two dollars for every TIF dollar into the project, officials said.
A tax incentive program for economic development available to all Maine municipal governments, a TIF, or tax increment financing, agreement 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 help that project’s expenses and to generate economic development funds for the municipality. TIF agreements typically run 10 to 30 years.
Lincoln typically retains more funds from TIFs than it would from property taxes, said Ruth Birtz, the town’s economic development coordinator. She said she will have the TIF and property tax dollar amounts computed in three weeks, when she gets more information from the gas company.
Phase I of the steel gas pipeline would run from the Loring Pipeline right of way at Route 116 down the access road onto West Broadway to Katahdin Avenue and the mill, officials said. Phase I would cost as much as $2.5 million and finish in fall 2015.
Businesses and homes along the route would be eligible for gas service as part of Phase II once the paper mill, the line’s anchor customer, is supplied. Those businesses employ more than 800 people. The construction of the lines branching from West Broadway to the airport, Main and Fleming Streets and part of Route 2 would cost about $2 million and would start in spring 2016, officials said.
Phase III would extend from Main Street to Enfield Road to Penobscot Valley Hospital, with extensions onto Perry, Lindsay, Ayes, Williams and Taylor streets. It would cost $1 million. Construction would run from spring 2018 to fall 2019.
Phase IV would run a portion of Route 6 down Evergreen Road, with lines extending to Lakeview, Pleasant, Libby and Morgan streets and Highland Avenue. It is expected to take 1½ years to build and cost $1 million. Phase V covers the Taylor Street area and would cost $1 million.
Company officials hope to finish designing Phase I by January, Barrowman said.