The forgotten fix
Though few people inside or outside City Hall seem to be aware of it, the city does have a funding mechanism in place to help pay for improvements to waterfront infrastructure—be it deteriorating, privately owned wharfs or the publicly owned Maine State Pier.
Called the Waterfront Tax Increment Financing and Economic Redevelopment Program (the “Waterfront TIF” to its friends), the program, created in 2002, captures property tax dollars generated when waterfront real estate increases in value. The money is earmarked for improvements like dredging and piling reinforcement.
The Waterfront TIF is capable of providing hundreds of thousands of dollars every year for such projects, but it’s never been used for that purpose. Instead, the TIF money has been funneled into the city’s general fund to cover day-to-day city expenses.
Now that interest on borrowing done to finance the Ocean Gateway cruise ship terminal is coming due, the TIF money—about $280,000 this year—is being used to help pay that debt.
In other words, given a mechanism intended to bolster the working waterfront, city officials have instead turned the Waterfront TIF into a funding source to support tourism.
Former planning board member Cyrus Hagge served on the committee created to oversee the TIF fund, but quit when it became clear the city wasn’t interested in using the fund for its stated purposes. “We had nothing to do,” he said of the committee. “We met two or three times. Our final recommendation was to take some of this money and do a study [to] locate where we could build a parking garage.”
“It was used for general tax purposes, by and large,” said City Councilor Jim Cloutier. The Council’s Finance Committee looked at the TIF money each year and decided, “Let’s not save any money for infrastructure. Let’s keep the tax rate down,” he said.
The $100 million-plus Riverwalk project on the eastern waterfront would have been a windfall for the Waterfront TIF fund. But instead, the Council struck a separate TIF deal with the developers to help pay for a parking garage at Fore and India streets intended to serve the Riverwalk project and Ocean Gateway.
“I tried to get them to use the TIF money to dredge right behind the Thomas Block, so it’d be a pocket for commercial fishermen,” said Phineas Sprague, Jr., owner of the Portland Company complex on the eastern waterfront. “I was told no, it was going to be used for a parking garage.”
As city officials consider leasing the Maine State Pier to a private developer willing to maintain it, some concede there is an alternative: use the Waterfront TIF to pay for the pier’s repair.
“That’s a possibility,” said Cloutier, who chairs the committee evaluating the private development proposals. “That’s not a completely remote possibility, either. It would require the Council to say we want to save up several million dollars in tax revenue. That would be a few years coming. Or we might bond it and pay the bond note out of TIF proceeds. But everything comes at a price.”
City Councilor Kevin Donoghue, whose district includes the waterfront, said using the Waterfront TIF to repair the Maine State Pier “should certainly be part of the discussion, especially when weighing our options between private development of the pier and other funding mechanisms.”
Ports and fishing industry advocate Tom Valleau also served on the Waterfront TIF committee, and shares the frustration Hagge and Sprague expressed over the way the fund has been managed. He too said the TIF fund could be used to repair the Maine State Pier, but added, “I would be surprised if they ever allowed any money to actually flow into it.
“Maybe the committee was remiss in allowing itself to be sidelined,” Valleau said. “But that’s what happened.”
