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The nearly $40 million in new value is dependent on increasing property values in the surrounding downtown area and the new tax dollars that would be generated by the projected growth. There is a revaluation planned, and that is taken into account in this calculation, but the new value is mainly from anticipated growth.
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A parking garage promotes continued Mill District and downtown development. This matters to the average property taxpayer because new development makes buildings and properties more valuable. More valuable buildings contribute significantly more to the property tax base, which helps stabilize the tax rate. In fact, the construction of the garage is expected to provide the City of Biddeford an additional $16,407,604 in property taxes in the first 10 years of operation and a net benefit of $39,772,744 over the 25 year lifetime of the agreement.
No residential property tax dollars will be used to fund this project.
Biddeford RiverWalk Community 1, LLC will provide the up-front financing to build and operate the parking garage. The City will make pre-determined annual payments to Biddeford RiverWalk Community 1 over a 25-year lease period. These payments will be made from the Mill District TIF (Tax Increment Financing) fund. Money in the TIF fund comes from sheltered property tax payments from businesses and developments in the Mill District. The second source of payments for the garage will be the revenues that are received from users who park in the garage and municipal surface parking lots.
No. On-street parking will remain free and under the management of the City of Biddeford.
The cost of construction is estimated at $22,297,150. The price will be confirmed by a formal bidding process and will be capped at $24,631,350. These costs will be paid by payments from the TIF and parking revenues.
The projections for revenues are calculated conservatively by a consultant. They are based on the parking demands of the surrounding buildings and development projects that have recently been announced. Even with these conservative projections, the parking demand on the site is expected to exceed the 640-space garage.
If the garage does not generate as much revenue as is projected, then the City will pay the difference and collect payments from property owners in the proposed Special Assessment District (click the link to view a map). The Special Assessment District includes the properties that surround the 3 Lincoln Street site. Funds will be collected from the property owners in the Special Assessment District only if revenues fall below 90% of projections. This mechanism is in place to ensure that no residential property tax dollars will be used for this project and that mill owners have an incentive to move forward with successful projects.
If revenues exceed 110% of projections, the City will receive all extra revenues until upfront expenses have been repaid. When that point is reached, the City will then receive $0.90 of each dollar of additional benefits and Biddeford RiverWalk Community 1, LLC will receive the remaining $0.10 of each dollar. Any revenues that are received will be placed in a Special Revenue Fund that will be used for parking-related expenses.
The garage will have 640 spaces. It is expected to open in 2021. For the first two years it is open, the costs to park in the garage are projected to be the same as current costs to park in the downtown parking lots. The hourly rate and the monthly rate for both the garage and the surface parking lots will see planned adjustments as time goes on.
The City will have the ability to review and “buy down” rate increases if city officials determine that rates are set too high. The City may also add reasonable cost increases above the rates that are currently set if they should be needed to keep up with demand.
Hourly Rate Information
Monthly Permit Rate Information
Under the agreement, Biddeford RiverWalk Community 1, LLC will take over the management of the following surface lots in the downtown area:
The City will continue to have input on how the surface lots are operated, and Biddeford RiverWalk Community 1 operate the parking program with the City’s goals and agreements in mind. This includes maintaining the free surface lot parking spaces that support local downtown businesses. The City’s Downtown Committee will also continue to meet to address the needs of the downtown community.
Rates, hours and practices will be consistent across all the lots and garage. The City and Biddeford RiverWalk Community 1 have agreed that parking costs in the surface lots will not go up during the garage construction period.
Biddeford RiverWalk Community 1, LLC will hire a qualified operator through a competitive bidding process to manage the operation and maintenance of the parking garage and surface parking lots. The operator will face penalties if goals and operational standards are not met.
A combination of the revenues from the garage and the payments made from the TIF will pay for the management of the garage. The amount of the City’s payments to Biddeford RiverWalk Community 1, LLC each year takes the cost of garage management into account.
Once completed, the RiverWalk will connect from Mechanics Park to the 3 Lincoln Street property. The construction of the RiverWalk provides additional pedestrian connections between the parking structure and other areas of the downtown.
The agreement will last for 25 years. After 10 years, the City will have three options:
If the City chooses to continue the agreement until Year 25, it will take over ownership of the garage at the end of the term at no cost.
In 2016, the Downtown Task Force considered 5 locations for a parking garage and recommended 3 Lincoln Street as the best location for the City’s first garage. In addition, Desmond evaluated three locations in a parking study and also recommended this site as the best location.
This space was selected for several reasons:
In addition to the parking garage, the City has entered into an agreement with BE Fitler, LLC to redevelop the 3 Lincoln Street property. The developers have proposed to establish development sites on either side of the space reserved for the proposed parking garage. The developers will seek to incorporate a mixture of residential, retail, office, hospitality, education and service uses with the proposed parking structure, RiverWalk, and riverside park to create an economically vibrant, urban-style mixed use destination. The latest rendering for 3 Lincoln Street is shown below.
No, the amount of available parking in the downtown has not changed due to any recent construction projects or streetscape improvements.
A traffic impact study will be completed as a requirement of the development.
No, the City is able to determine how funds from the TIF are allocated. Based on the approved proposal, payments from the TIF will total $8,376,695 for the first 10 years of the agreement. A portion of the costs of the garage will be paid for by revenues from the users of the garage.
The City received $562,921 in net revenues in FY20 due to growth in the community since the closure of MERC. These numbers represent only FY20 (July 1, 2019 to June 30, 2020) and are not cumulative. The calculations used to answer this question are described below and shown in the image at the bottom of the page.
The first table, Maine Energy Recovery Company, shows the total amount of taxes paid by MERC in the last year before its closure. The valuation loss when MERC came off the books was $905,729 (using the FY13 assessment and tax rate of $16.54). It should be of note that the total value of MERC would have been reduced in FY14 as the total values of the entire city were reduced in a city-wide adjustment.
The second table, Taxable Real Estate Valuation Changes, compares the city-wide valuation and the MSRD 1-3 valuation in FY2014 to the same values in FY2020. The city-wide valuation has grown by $58 million since FY2014, and the MSRD 1-3 valuation (which includes the downtown area that was directly impacted by MERC's closure) has grown by $44 million.
The third table, TIF Value Generated (City Retained Funds) shows the growth of the TIF since MERC's closure. The TIF funds included in the comparison are those that are retained by the City, not CE (credit enhancements). The TIF value has grown by $475,143.
The final table, MERC Taxes Lost vs. New Growth: All Revenues, shows the net difference between revenues in FY14 vs. FY20. The City received $562,921 in net revenues in FY20 due to growth in the community since the closure of MERC. These numbers represent only FY20 (July 1, 2019 to June 30, 2020) and are not cumulative. Note that the growth in downtown value ($44,268,200) is reduced from the city-wide increase ($58,146,101) so only the net difference in tax revenues is included in this final calculation.
The last year that MERC was taxed by the City was 2012. That year, the total net tax commitment, which is the part that drives the tax rate for residents, was $39,117,595. This year, it is $46,340,694. This means that the net tax commitment has gone up 18.47% in 7 years at an average rate of 2.64% per year. The claim has been made that taxes have gone up 30% since the closure of MERC; however, this is false.