The city’s Downtown-Waterfront Tax Increment Financing district received a number of amendments that increase the size of the district, as well as allow the city more flexibility in funding eligible projects during a special City Council meeting Tuesday, March 26.

Belfast approved the creation of the downtown-waterfront district in 2007 to help develop a number of projects. However, after its creation the district failed to generate sufficient revenue until 2012 with the arrival of Front Street Shipyard, which generated millions of dollars in revenue, according to a report from Belfast Economic Development Director Thomas Kittredge.

The downtown-waterfront district was amended in the following ways:

The city can capture 100 percent of incremental personal property value, as well as 100 percent of incremental real property value. Prior to the amendment, the city was only able to capture the incremental real property value.

Real property comprises buildings and land, whereas personal property comprises items such as cars or furniture.

The Tax Increment Financing district boundaries cover an area of nearly 194 acres, with a portion of the area encompassing some sections of the inner harbor, Kittredge said.

Revenues from other Tax Increment Financing districts, such as the Northport Avenue district, could be used to finance projects in the downtown-waterfront district. City Manager Joseph Slocum explained that state law allows revenue from other Tax Increment Financing districts to be applied to downtown Tax Increment Financing districts; however, state law prevents any revenue from the downtown-waterfront district from being applied to other Tax Increment Financing districts in the city.

Included in the amended downtown-waterfront Tax Increment Financing district is an updated and prioritized development plan. Those projects include constructing floats in the harbor, improving sidewalks and expanding Thompson Wharf, among others.

The final change to the district includes a provision that allows the city to enter into individual credit enhancement agreements. Kittredge noted that the purpose of allowing Tax Increment Financing revenue for individual agreements is to create an incentive for developers for specific projects.

However, Kittredge stressed that no applications have been submitted requesting the individual credit agreements.

Tax Increment Financing districts provide additional value to a municipality beyond capturing added tax value in an area to finance projects. The district also functions as a tax shelter: if the district's valuation is assessed at $10 million and new construction in the district adds an additional $2 million in valuation — which would go into the Tax Increment Financing fund — for a total of $12 million in valuation, the state would only assess the valuation at $10 million.

The lower valuation would help decrease the local share residents pay for the schools, which is based on a town or city's total assessed valuation.

Councilors approved the amended downtown-waterfront Tax Increment Financing district by a vote of 3-0, with councilors Mike Hurley and Eric Sanders absent.

Republican Journal reporter Ben Holbrook can be reached at 338-3333 or at bholbrook@courierpublicationsllc.com.

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