January 23, 2013

Augusta councilors to consider tax break for old MaineGeneral hospital

Augusta East Redevelopment Corp. asking for tax increment financing to help redevelop property

By Keith Edwards kedwards@centralmaine.com
Staff Writer

AUGUSTA -- A proposed tax break to help redevelop the soon-to-be-former MaineGeneral Medical Center building on the city's east side goes to city councilors for discussion Thursday.

Augusta East Redevelopment Corp. has requested a tax increment financing, or TIF, deal with the city after closing last week on a $2.5 million deal for the hospital property on the East Chestnut Street. The firm is a subsidiary of Mattson Development, which is owned by Hallowell resident Kevin Mattson and his partners.

Councilors expect to discuss but not vote on the proposal at their meeting Thursday, which begins at 6:30 p.m. in council chambers at Augusta City Center.

Under the request, 100 percent of property taxes on the hospital property initially would be turned back to the developer. If and when tenants are found to occupy the building, that percentage would decrease to as low as 50 percent of the new taxable value.

After 20 years, the developer would be expected to pay the city its full share of property taxes on the seven-story, 317,000-square-foot building.

MaineGeneral Medical Center will pay rent to Mattson to remain in the building until the opening of its new $312 million, 192-bed hospital near Interstate 95. The new regional hospital in north Augusta is designed to combine inpatient functions of its Augusta site as well as its hospital at the Thayer campus in Waterville. The new hospital, the Alfond Center for Health, is scheduled to open in November.

Ralph St. Pierre, finance director and assistant city manager, said the city's TIF Committee recommends granting the tax break to help spur redevelopment of the building.

"They're buying the building, which is set up as a hospital, and they have no prospective tenants lined up," St. Pierre said. "That's why the TIF was structured the way it is, beginning at 100 percent."

When Mattson bought the building, he said he anticipated spending five to seven years working on redeveloping the property, which has been a hospital for more than a century.

Councilors also are scheduled to consider another proposed TIF, sheltering the value of natural gas pipelines proposed to be built throughout the city. Under that deal, the city would reap the rewards, keeping the tax revenue it generates to use for infrastructure, economic development and other allowed projects.

TIFs allow municipalities to shelter property taxes generated by new development within designated districts, as long as the sheltered funds are used for certain purposes, such as economic development or infrastructure improvements.

Councilors also are scheduled to:

* discuss adjusting the boundaries between the city's four voting wards, to keep their populations within allowed limits;

* hear a presentation from Friends of Lithgow Library;

* discuss amending the Mineral Extraction Ordinance to permit quarrying off Route 27; and

* discuss designating Cony High School as the permanent Ward 4 polling place.

Keith Edwards -- 621-5647
kedwards@centralmaine.com

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