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Front Street Shipyard to begin largest building in July

City sells municipal parking lot as site for 'Building 6'
By Ethan Andrews | Jun 09, 2016
Source: City of Belfast An undated artist's rendering of the planned Building 6 as it would appear beside the smaller, existing Building 5 at Front Street Shipyard.

Belfast — Front Street Shipyard is getting ready to break ground on a new building fit for the increasingly massive yachts arriving at the waterfront business each year.

Building 6, as it is known, will cover 21,700 square feet and stand 66 feet tall. It will be located on what is currently a municipal parking lot on Front Street.

Belfast City Planner Wayne Marshall said June 7 that the shipyard is looking to start construction in the middle of July and finish by the first of the year.

Building 6 would stand next to — and 11 feet taller than — Building 5, which is currently the largest building on the property. The existing building can accommodate only the smaller of two travel lifts currently operating at Front Street Shipyard.

Building 6 would allow the larger lift, a 485-ton-capacity machine purchased in 2013, to move vessels directly from the water into the workshop. The new building also will be able to fit longer vessels under its roof.

The City Council on May 15 authorized an agreement to sell the municipal parking lot parcel to DUBBA LLC, the business entity that owns Front Street Shipyard, for $600,000.

This was essentially an administrative step. The city had already approved the sale more than two years ago in a contract rezoning amendment passed in January 2014. Building 6 was subsequently approved by the Planning Board and Intown Design Review Committee.

Up to that point, Front Street Shipyard had been building as fast as the city could grant approvals. But the groundbreaking for Building 6 was pushed back several times.

Front Street Shipyard President JB Turner did not immediately respond to a request for comment June 7.

Later in 2014, the shipyard got a $10 million federal loan Turner said would be used to repay early investors in the business. This in turn would put the shipyard in a better position to get loans for future projects.

Marshall wrote in a memo that the shipyard is working to secure a $4 million loan through Androscoggin Savings Bank and the U.S. Small Business Administration to finance construction of Building 6.

When Building 6 was approved in 2014, the city had planned to lease the parking lot parcel to Front Street Shipyard for $3,333 per month. Those payments would have equaled the $600,000 purchase price after 15 years.

Under the final terms approved May 15, the shipyard will pay $8,201.28 per month for seven years, starting July 1, 2017. The payments include an effective interest rate of 4 percent, or roughly $89,000 over the term of the loan.

Payments from the shipyard will go into a new reserve account to be overseen by the City Council.

Upon its completion, Building 6 will generate $65,000 to $80,000 in new tax revenue. Because of the location of Front Street Shipyard, this money is automatically diverted to the city's Downtown and Waterfront Tax Increment Financing (TIF) account.

TIF districts allow municipalities to shelter new taxable property value from state assessments used to calculate the local share of school funding. With some exceptions, revenue from the TIF district must be spent in the TIF district.

Belfast's Downtown and Waterfront TIF is currently being used to pay for the recent Cross Street reconstruction and environmental cleanup at the site of the former Maskers building on Front Street. It is also being used to fund part of the city's economic development office.

Marshall said revenue from the Downtown and Waterfront TIF, including the addition Building 6 and some savings in the TIF account, will cover between three and five years of annual payments on a $2.15 million loan for ongoing reconstruction of Front Street.

After that, Marshall said, some of the debt service on the 20-year loan may have to come from outside the TIF district.

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