CARIBOU, Maine — With only five of seven councilors present Monday, the Caribou City Council rejected a credit enhancement agreement for Caribou Senior Living, LLC, which is seeking to convert the former Hilltop School into a senior living facility.
With two excused absences and two councilors voting against the agreement, the motion fell one vote shy of what was required for passage, according to City Manager Dennis Marker.
Marker said, during the Aug. 13 meeting, that this agreement is the “final instrument necessary to implement the TIF [tax-increment financing] district associated with the Hilltop redevelopment process.”
While the city did approve designating the 7.26 acre site as a TIF district on June 11, Marker said the credit enhancement agreement was intended to finalize some financial details, including how TIF funds would be treated and distributed.
Designed as an economic development tool, a tax increment financing program allows the municipality to return a portion of the tax dollars generated by a new business or development to that entity in the form of tax credits to assist with financing those projects.
As drafted, the credit enhancement agreement being considered by Caribou would have 95 percent of taxes on the property going back to the LLC to reinvest in the project with five percent going to the city. This would continue for 30 years under under the previously approved TIF.
Councilor Mark Goughan said during Monday’s meeting that he was leery of approving the agreement due to a provision indicating the investors have the right to sell the property to another party.
“I have an issue with that,” he said. “I would think that our investment would allow us to have some input at that point as to if we could allow new owners, depending on who those new owners are.”
Goughan also had an issue with a section of the agreement that stated the investors have no obligation to build the senior housing facility for 30 years. Councilor Joan Theriault also asked why one section of the agreement indicates the investors have no obligation to build the project.
Marker indicated that under the agreement, which is available on the city website, if the LLC acquired the property from the city and then failed to move forward with the project, the agreement would be terminated.
“If they choose not to go through with this,” Theriault said, “we may come out ahead on the taxes” since the LLC would at that time own the property and have to pay full taxes to the city on its assessed value.
Marker agreed that if the developers have not moved forward with the project, the developers would get the tax bill.
Councilor Hugh Kirkpatrick asked if the agreement could be amended to include a specific deadline for having the project started.
Shawn Pelletier, a member of Caribou Senior Living, LLC, who was in the audience, told the councilors that the TIF agreement is an essential economic tool to ensure cash flow.
“The only way to make this work is through TIF,” he said. “This isn’t a gift. Nobody’s pockets are being lined. This group of people is working very hard to bring this to the community, and this is the only way it works. Surely, this project is going to create jobs. The most important thing is that the community needs it.”
Goughan asked if there was a timeframe for starting the project.
Pelletier said that his goal is to start this winter, and that the TIF agreement needs to be finalized in order to make everything work smoothly.
“It’s just too risky to continue until we have that commitment,” he said.
Councilor Theriault agreed that the project is “sorely needed,” for the community.
“I know they will probably never see a dime of profit in their lifetime,” she said. “They’re putting their money up for something that is so badly needed, and I think they should be applauded for what they’re doing.”
Goughan read a prepared statement regarding the project, outlining his reasons for being against the TIF agreement.
He began by saying he has “received zero historical information on the Hilltop TIF,” even after requesting these documents during a March council meeting.
“Being given no official historical data on this subject,” he said, “I can only state what I was told verbally from other sources. You could say I’m going on rumors, but under the circumstances what else can I base my vote on?”
He described several changes to the project that he obtained through word of mouth since being elected as a councilor and up to the project’s current arrangement.
“For the eight months I’ve been on this council,” he concluded, “not once was I asked about my opinion on any of the above changes. Not once has anyone given me any historical data on this subject. In my opinion this agreement was negotiated by the city manager and no will tell me under what authority.”
Goughan then urged his fellow councilors to reject the proposal “for a more sustainable agreement for Caribou’s future.”
Mayor David Martin responded, saying that the Hilltop building is currently collecting “zero income” for the city.
“If this deal doesn’t go through, then we’re going to have a building that we’re going to have to maintain, sell, or tear down and it’s not going to happen,” he said. “So I think this is a good thing for Caribou.”
Theriault also sided in favor of the project, adding that the former Sincock School building on Main Street will not be demolished if the agreement does not go through.
Kirkpatrick and Goughan voted against the motion, while Theriault, Martin, and Councilor Phil McDonough voted in favor. Without the four needed votes, the motion failed, but Martin told the members of the LLC who were present to return for the next scheduled council meeting on Sept. 10, at which point he said he expected it would pass with the other two board members — Tim Guerrette and Nicole Cote — present.
-
- Caribou Councilor Mark Goughan votes against a credit enhancement agreement for the Caribou Senior Living, LLC during an Aug. 13 City Council meeting. To his right is Mayor David Martin. (Christopher Bouchard)
