TIF, short for Tax Incremental Financing, encourages private investment in downtown buildings by offering tax incentives on new construction or renovation.
The first fruits of the TIF may be seen this summer. Hazlett pointed out that a planned senior citizen apartment complex should start construction behind KeyBank as early as sometime in June. It’s an example of a privately-owned project that will benefit from the downtown TIF, he says, by sharing the tax burden with the town, but not using town money.
Does it matter to the average taxpayer? Hazlett says, definitely. “Long term what this means to a resident in Houlton is job creation, growth and revenue to the town from other than taxpayer contributions.” Houlton has experienced some downturn in retail sales along with some job losses. But, Hazlett says, there have been minimal foreclosures and no wide swings in real estate prices or losses as experienced in other parts of the country.
So, if a business owner invests in property and the value goes up, the town can bring in more revenue from the business without having to hike taxes on residents. “It’s a pocketbook issue to finance improvements in the buildings and the stores and the appearance of the downtown area without taxpayer money.”
Community Development Director Wade Hanson says: “Our downtown is very beautiful and pristine and well-maintained. But, as times get tougher and the dollar doesn’t go as far, this allows developers to benefit from tax incentives that municipalities offer to improve their property.”
Hanson was at the April 9th proceedings in Augusta when Governor John Baldacci presented the Certificate of Approval for Houlton’s new Downtown TIF. “The ceremony,” said Hanson, “was enlightening in showing how the state is trying to help municipalities take control of economic development in the area. It’s a big step forward in empowering local government.”
But, why don’t owners do their own improvements? Hazlett says it’s a matter of affordability. Business owners would end up paying twice — once by making improvements and a second time by paying higher taxes. “We are saying to the owners, if you improve your building we will share the tax burden over 10 years. There’s no incentive without tax-sharing.”
Hazlett added if the improvements are made, it benefits economic development – more stores will want to move in, apartments will be refurbished and people will want to move into those apartments bringing more revenue to the area and thereby revitalizing the economy and appearance of downtown.
Houlton’s downtown gets boost
HOULTON, Maine — As the country struggles to find its way out of an unwieldy economic morass, with some municipalities and top corporations still doing a dangerous dance at the edge of bankruptcy, Houlton, according to Town Manager Doug Hazlett, is basically holding its own and readying for economic development, thanks to its recent state-approved Downtown “TIF” District.
