Houlton Rotarians learn about TIF programs
HOULTON, Maine — Nancy Ketch, Houlton’s community development director, and Scott Dionne of the Southern Aroostook Development Corporation (SADC) collaboratively updated the Houlton Rotary Club about Houlton’s Tax Increment Financing (TIF) Programs.
The two primarily focused on the programs in the Downtown TIF, but also touched on the other districts. Ketch explained that the various TIF Districts were set up between 10 and 15 years ago and are intended to last 20 years.
With that in mind, members of SADC formed sub-committees to look at the TIF Districts in the town and the programs available to work with the town on publicizing programs. The group also made recommendations for changes that might be needed. Dionne chaired the committee that reviewed the Downtown TIF District.
The town of Houlton has three primary TIF Districts — the Airport Industrial Park TIF Zone, the North Street TIF Zone and the Downtown TIF District.
In discussing the Airport TIF District, Dionne and Ketch shared with the group that a speculative building was constructed a couple of years ago using funds that had accumulated in that fund. The building is now occupied by Smith and Wesson.
The North Street District was established in recognition of increased development in that area. A major project funded in the district was the extension of water and sewer farther up U.S. Route 1. The annual payments on that project are paid from the North Street TIF funds. The town also recognized that increased development on North Street could adversely affect development in the downtown.
As a result, a portion of the funds generated in the North Street TIF District are funneled to costs outside the district including 30 percent for the downtown. The Downtown Revolving Loan Fund receives 20 percent of the annual funding in the North Street TIF District while 10 percent goes toward downtown infrastructure improvement. A large portion of the infrastructure improvement funds are earmarked as a match for the MDOT grant the Town received to upgrade the Downtown sidewalks.
Dionne and Ketch explained the revised Downtown Revitalization Funding Initiative which includes three programs. The Downtown Revolving Loan Fund (RLF) Program is established to encourage investments that improve the longevity of buildings in the Downtown TIF District through projects upgrading and improving roofing, mechanical systems, fenestration, ADA and life safety compliance.
Loans of up to $100,000 may be made based on the applicant’s credit worthiness and ability to repay. The interest rate is 3 percent fixed for the term of the loan. The program is intended to provide gap funding with the preferred project financing structure being 60-30-10 — a minimum of 60 percent from a lead lender/bank financing, a minimum of 10 percent owner/borrower equity and a maximum of 30 percent from Downtown RLF financing.
A Micro Loan Program has also been designed to assist businesses located in the Downtown TIF District with working capital. This program will make loans between $500 and $5,000 with the interest rate being prime at the time of closing and fixed for the life of the loan. The maximum term for these loans is five years.
The third piece of the Funding Initiative is the Façade Grant Program which is set to encourage private investment in improving historic facades in the downtown by providing a financial incentive. Grants are available to reimburse up to 50 percent of the total cost of the improvement project with the maximum matching grant award being $5,000.
Further information on the programs is available at the Houlton Town Office, on their website at www.houlton-maine.com or by contacting Ketch at 521-5938.