Wednesday, December 4, 2013
By Paul Koenig firstname.lastname@example.org
GARDINER — The City Council will wait until at least its next meeting to make decisions about a new heating source for the wastewater treatment plant and whether to move forward with a request for tax incentives from a developer.
Councilors heard presentations from representatives of various heating sources, including natural gas, at their meeting Wednesday night, but they said they wanted more time to mull over the options. The council meets again in two weeks.
Wednesday also marked the second time Gregory Farris of Farris Law spoke to councilors about his plan to build an office park for service-type businesses, including a space to consolidate his two downtown Gardiner law firm offices.
The city is considering whether to convert its wastewater treatment plant from No. 2 heating oil to either natural gas, wood pellets or an effluent thermal heating system.
City Manager Scott Morelli and a consultant hired by the city to conduct a heating system study both recommend switching to natural gas.
The Wastewater Advisory Board, however, recommends an effluent thermal heating system because its payback period is close to natural gas, it has the lowest operating costs and for its light carbon footprint.
The city spends approximately $21,000 a year to heat the plant with No. 2 oil and would save between $11,000 and $16,000 a year by switching to one of the considered alternatives, according to the study.
One concern for the city is that deciding not to go with natural gas could prevent the natural gas company building a pipe system in the city from expanding to the South Gardiner area.
Michael Duguay, director of business development at Summit Natural Gas of Maine, told councilors he can’t guarantee the company will expand to South Gardiner with or without the wastewater plant as a customer.
He said the plant’s heating use is equivalent to only about eight homes, but he didn’t know if the decision to expand in the area would hinge on that amount.
Fewer prospective customers make it more difficult to expand to an area because the company must make that up with expansion elsewhere in the system, which might not be enough of a return on investment, Duguay said.
Morelli said Thursday he expects the council to make a decision on which heating source to convert to at their next meeting on Sept. 4.
The council also didn’t make a decision on the other major issue discussed — the request for a tax-increment financing on the land targeted for a business park on Brunswick Avenue.
Tax-increment financing, or TIFs, allow municipalities to freeze the value of properties on the tax rolls and use the tax revenues that would have been earned from future development for set uses, including giving it back to the developer in the form of credit enhancements or economic development activities. Taxes from the prior valuation on the property would still go the city’s general fund.
Farris and his business partner Kevin Franchetti are proposing to develop a 27-acre lot for an office park. He told councilors they would be looking for a credit enhancement of 100 percent for the first five years — meaning they would get back all of the property taxes from new development — and 50 percent for the next 15 years.
Morelli and Nate Rudy, director of economic and community development, recommended giving a 33 percent credit enhancement agreement averaged over 10 years.
Farris, however, told councilors the 33 percent wouldn’t be enough to help recoup his investment.
Morelli said city staff will meet with Farris to negotiate details of the proposal, including the amount of credit enhancement the city may grant and the types of businesses that would be excluded from the development to avoid competing with the city’s Libby Hill Business Park across the street.
His goal is to have something ready before the next council meeting in two weeks.
The city based its 33 percent recommendation on Gardiner’s current credit-enhancement agreements range, which is from 25 to 50 percent, Morelli said.
He said the 100 percent “would be a departure from anything we’ve done in the past.”
Farris said on Thursday he doesn’t see what the problem is because the project won’t cost the city anything. He said he wouldn’t build the office park with the city’s 33 percent proposal and would reconsider whether to even construct the consolidated office for his law firm on the property.
Farris has warned the city that he has been asked to relocate to two other cities but would like to stay in Gardiner. He declined to name the other cities to which he has been asked to move.
Paul Koenig — 621-5663