Category Archives: Uncategorized

Will Scarborough show the love to WEX???

The WEX story so far…

In our last blog we filled you in on the $2.25 million tax break (aka “Credit Enhancement Agreement” or “CEA”) that WEX has sought from the Town.   The Town is being asked to pay WEX $150,000 per year for 15 years for a total of $2,250,000.  Actually, since the developer will be paying the taxes on the property, the Town will probably be cutting a check payable to WEX each year.  So it’s more like rent subsidy payments to WEX that the taxpayers will be making over the next 15 years.

And remember, this proposed rent subsidy payment is in addition to the $80 million tax break the Town gave to “the local boys” last year to develop the Downs property.  Little did we realize that that $80 million was only the beginning… the WEX CEA is just the first of the “extras.”


Not getting the tax break/CEA is NOT a deal breaker

The main argument for giving WEX the $2.25 million tax break is that it if they don’t get it, they don’t come to Town.  They go to SoPo.   In other words: no tax break, no WEX.  While that may have been the case earlier in the negotiations, it is no longer the case. 

Here’s why.  In the January 23 Press Herald story, WEX’s head of real estate noted that the tax break was “a potential deal breaker,” not that it was a deal breaker.  Subsequently, it has been reported that the developer of the WEX building (Center Street Partners) has entered into a construction contract with Landry & French to build the $50 million facility.  Here’s the link to that story.

Now for that to happen, the developers had to have agreed to a lease with WEX.  In a case like this, a developer won’t enter into a construction contract without a lease in hand.  And since Scarborough has not authorized the CEA/tax break, that tax break clearly cannot be part of the lease arrangement that WEX has agreed to.  QED.  Scarborough’s granting of the tax break to WEX is not required for WEX to come to Scarborough.  They are coming with or without the tax break.

So if the tax break is not required for WEX to come, why are we still talking about giving them one?  Just to be nice guys?  As a welcome gift?  From the taxpayers of Scarborough to the shareholders of WEX?   So they can “feel the love from the town,” as developer Roccy Risbara put it?  Cut it out!  We can think of many much less costly ways for the Town to show WEX the love!

WEX, the good corporate citizen?

Here’s a statement from WEX’s website about their relationships with the communities they are in: “At WEX we act as stewards of our communities. We have a long history of giving back, engaging with local organizations, and ensuring sustainability in our philanthropic endeavors.”

But apparently, in Scarborough’s case, their generosity only kicks in after they have shaken down the taxpayers for a rent subsidy.  This is just weird.


$150k/year is:

              (a) “a drop in the bucket,”

              (b) “peanuts” or

              (c) “chump change.”

One of the least persuasive talking points from the Downs crew is that the $150,000 per year rent subsidy (or $2.25 million in total over 15 years) is just chump change for the Town considering what we’re getting.  Perhaps.  But to us, that $150,000 is still a couple of teachers or emergency responders.  And given the financial challenges the Town will face over the next few years, that $150,000 each year will loom even larger.

(Also, let’s not forget some previous heated debates over much smaller amounts of money, like the great beach raking controversy of 2018 and the inability to pay for the postage to send out revised property cards in connection with the residential revaluation.  Both of those issues involved less than $10,000 but were characterized as budget busters.)

Here’s another way to put that $150,000 into perspective.  Let’s see how much $150,000 is as percentage of total expenses for the Town and for WEX:

Based on the above you could argue that, comparatively speaking, $150,000 means 15 times more to the Town of Scarborough than it does to WEX.  So if $150,000 is a “small amount” to the Town of Scarborough, it’s an infinitesimal amount to WEX.  Which of those two entities is better able to absorb this “drop in the bucket?”


And speaking of big numbers…

WEX employees are the second and third highest paid execs in Maine’s public companies…


A Greeting  Card for WEX


Bottom Line…

Somehow Scarborough now finds itself in the position of voluntarily providing a $150,000 per year rent subsidy to one of Maine’s most successful companies.  If WEX can’t afford the rent, they should hash it out with the developers/building owners.  The taxpayers of Scarborough should not be involved.  We should not be chipping in even one thin dime to support this corporate welfare scheme!


What’s next on the proposed WEX tax break

The Town Council will be having a public hearing on the tax break for WEX on Wednesday, February 5 at 7:00 pm in the Council chambers.  All members of the public are cordially invited to share their thoughts on giving WEX $2.25 million as an inducement to come to Scarborough.  Remember, you don’t have to be a polished orator to speak; in our experience, the “plain speakers” are often more persuasive to the Council members.

Also, the Town has announced a “Community Round Table” on the WEX CEA to be held at Town Hall on Thursday, February 13, at 6:00pm.  According to the Town newsletter: “There will be a brief presentation to share the what, who, and how of the proposal and then the floor will be open for resident questions and comments.” 

Finally, the Town Council’s “second reading” or final action on the proposed tax break is currently scheduled to take place at the Council’s meeting on Wednesday, February 19.

So there are still good opportunities to learn more about and express your opinion on the proposed tax break.

But even if you aren’t the meeting-attending type, please let the Town Council know how you feel about the proposed WEX tax break.  It really is simple and your opinion does matter!  One email address sends the same message to all the Town Council members: towncouncil@scarboroughmaine.org.

If you have read this far, you probably care about the WEX tax break one way or the other.  So please take the 2-3 minutes needed  to send a brief email to the Town Council sharing your opinion right now.   Scarborough is your Town, too!  Share your opinion!  Thank you!


That’s all for now, folks.  Happy trails until we meet again!

Be neighborly,

TT Hannah

(nom de blog of Steve Hanly, who is solely responsible for the blog’s content)


 

$2.25 million Holdup in Scarborough

Happy New Year, Scarborough friends!  Strap yourself in for another wild ride on the Tilt-A-Whirl that is life in Scarborough.

And you thought that last year’s $80 million tax break for the Scarborough Downs developers was the end of the story.  Ha!  How wrong you were!  The “local guys” are back again – this time they brought along a wealthy accomplice – trying to hold up Scarborough taxpayers for another $2.25 million.  Read on for the details of the latest heist…

For those of you who may have forgotten (or tried to forget) the details of the last Town Council’s generosity to local guys Risbara and Michaud…  The deal was essentially that the Downs developers would get 40% of the taxes on new property value created at the Downs.  That amounted to a tax break of $80 million over 30 years, give or take a few million.  One of the things that the Town was supposed to get out of this tax giveaway was about 1,900,000 square feet of new non-residential construction.  But not so fast.

The gist of the new grift is that the Town now needs to give an additional $2.25 million tax discount in order to induce the construction of a 200,000 square foot office building by WEX, a high-flying Portland-based financial/tech company.  WEX will get a rebate of $150,000 per year of their tax bill for the next 15 years.  Think of it as a kickback or signing bonus.   (Remember that nice tax break the Town gave you when you bought or built your home?  What, you didn’t get one?)

In short, the WEX deal means $2.25 million more tax dollars will flow into corporate pockets rather than into Town or school support.

[Editorial Note:  Images and words such as “holdup,” “heist” and “kickback” are used strictly in the figurative sense.  There is no suggestion that there is anything illegal or improper in the proposed transaction.  It’s all just good, clean business!]


How the Tax Break Will Work

WEX is planning to build a $50 million operations center at the Downs…right next to the proposed community center (i.e., pool).   At the current rate and the Town’s estimated assessed value of $45 million, that should generate $662,000 of tax revenue for the Town in the first year.  Sounds wonderful, doesn’t it?  But let’s see where that $662,000 ends up going based on the two “CEAs” or “credit enhancement agreements.”  (CEA is just the polite name for this type of tax break.)

If WEX were a “normal” taxpayer, they would pay the Town $662,000 of taxes in the first year.   But when you apply both tax breaks, the Town will end up getting only $247,000.  That’s a reduction of $415,000 or 63%!  Welcome to the world of high finance! 

Also, let’s not lose sight of the fact that the annual $150,000 tax break is equivalent to the salaries of a couple of teachers or first responders.

Remember the old joke: “We lose money on every sale, but we make it up on volume.”  This CEA would be funny if it didn’t have a real impact on our taxes.


About WEX

So what do we know about WEX?  Well, the company started in 1983 in Portland as a pioneer in the fleet (i.e., trucking) credit card business and has been astonishingly successful since then.  It is now “a global leader in financial technology solutions.”  It is Maine’s third largest publicly held company (based on revenues) with an enviable financial track record.  Here are some of WEX’s recent financial highlights:

Does this sound like a company that needs a “helping hand” from the taxpayers of Scarborough?  Not to us!

And, by the way, WEX just opened a new world headquarters building in Portland last year.  It’s about 100,000 square feet, with a harbor view and lots of goodies as described in the following excerpt from one of their PR pieces:

This is NOT an image from a WEX wellness room.

“On each floor, our employees can find at least one kitchen/break room stocked with free coffee and healthy snacks as well as small, private wellness rooms dedicated to whatever wellness looks like to our employees, whether they be for meditating, nursing mothers or just grabbing a few minutes of quiet.   Employees will also enjoy amenities including a rooftop deck (once the snow melts, it will be fully furnished and wifi-enabled)…”   To get the full effect, visit WEX’s blog post about the new headquarters at this link.)

Sounds rather posh, doesn’t it?   And yet somehow WEX can’t come up with enough scratch to pay their taxes at the same rate that all Scarborough residents and most businesses pay?   What are we missing?


The arguments you will hear…

The combined WEX/Downs/Town public relations machine is, naturally, working overtime on this fantastic “opportunity” for Scarborough. (If we had a nickel for each superlative describing the company and the deal, we could retire from the blog business… much to the delight of many.)  Please don’t get us wrong – WEX is a terrific company and solid corporate citizen and would be a welcome addition to the Town’s business landscape.  But putting the squeeze on Scarborough taxpayers just doesn’t seem like a neighborly way to begin a relationship.

 

Here are some of the talking points that have been ginned up so far:

Sure, WEX is a great company with a wonderful reputation.  Having them come to Scarborough would certainly be a positive for the Town’s attractiveness to businesses.  But what savvy developer/business owner isn’t going to ask for the same favorable tax deal that WEX received?  And are we going to say no?  If we say no, on what criteria will that decision be based?  Yes, we may have “only” given away $2.25 million to WEX, but the tab will be much, much more when we’re forced into future similar tax breaks for other businesses.  We are essentially giving away a huge chunk of the favorable revenue-to-cost ratio of commercial property over residential property.

By the way, did the new Foley’s Gym on Haigis receive a tax break?  If not, is it too late for him to go back and ask for a 23% tax reduction?  (Which reminds us… have the Edge/Downs folks asked for their CEA for the new downtown sports complex yet?)

Yes, lots of jobs.  But why is that such a great thing?  Oh, right, it makes us a “vibrant” and “fast-growing” community.  Neither vibrancy nor fast growth will do much to keep your taxes in check, despite claims to the contrary.  In fact, “vibrancy” may just be one of those marketing terms that really means “increased traffic congestion.”  And the Town’s fast growth over the past decade doesn’t seem to have solved our persistent budget problems.

Another thing… have you noticed a lack of jobs in Scarborough lately?  Are there lots of unemployed folks hanging around that we have somehow missed?

Perhaps.  But is that a major issue?  There are other companies out there.  The idea that some have suggested that the land where WEX is going may otherwise sit idle for years and years seems far-fetched.  The Downs developers have consistently touted what a fantastic location the property is.

WEX agreed saying they evaluated the Downs and several competitive sites with respect to “an accessible location near major highways, a campus setting with on-site amenities and expandability for future planned growth.”   WEX concluded: “The Downs surpassed all criteria and we were quite impressed with the master plan and offerings.”  In other words, the Downs is a premier business location.  It should not need massive incentives to be developed! 

The developers have already received $80 million in commitments to, among other things, provide the Town with 1.9 million square feet of non-residential buildings.  But apparently that was just the first installment.   How many more millions of dollars will be diverted from supporting Town and school needs to lining the developers’ pockets?  There’s a fuzzy line between encouraging legitimate economic development and making corporate welfare payments.  Does the WEX deal cross the line?

Maybe we are naïve, but we really thought the current Town Council was serious about transparency and actually listening to the citizens on major issues.  Yet here we are, after who knows how many months of non-public discussions, being presented with a tax break proposal that has all the earmarks of a done deal

In fact, the credit enhancement agreement was apparently viewed as so certain that neither WEX nor the Downs (nor the Portland Press Herald) felt the need to mention its existence when the deal was announced.  Not sure how they could have come to that conclusion without strong assurances from some Town officials that approving the agreement was a mere formality, perhaps with a small bone of faux public input thrown to the witless populace. 

Well, folks, now it’s our chance to show them what a real public discussion is like!


What’s next with WEX?

>>>  Wednesday, January 22 at 6pm, Town Hall — Town Council Workshop on the WEX deal.   The propaganda package for the workshop is available on the Town website.  Here’s the link. 

>>>  Wednesday, January 22 at 7pm, Town Hall — Town Council Meeting with first reading of WEX Credit Enhancement Agreement.

>>>  Wednesday, February 5, Town Hall – Public hearing on the WEX deal.

>>>  Wednesday, February 19, Town Hall – Town Council Meeting with second reading/approval of the WEX Credit Enhancement Agreement.

If you haven’t already signed up for the SMARTaxes newsletter, please consider doing so since they will undoubtedly follow developments on the WEX tax break.  To be added to the newsletter mailing list, just send an email requesting it to scarboroughtaxes@yahoo.com.


Other developments that will scare your socks off

In the scheme of things (and there is a lot of scheming going on), it turns out that the WEX tax break barely registers on the Taxpayer Concern Meter (the “TCM”).   In our next fun-filled issue, we’ll bring you up to speed on three huge projects that are all jockeying for a major claim on your disposable income… if there’s any left.

 

  • Community Center/Pool – The ad hoc committee that was convened to make an emergency evaluation of the Downs’ community center lease offer will make its report to the Town Council within the next 2-3 weeks.  Incredibly, they will recommend that we continue considering the Downs’ lease proposal in spite of the fact that its 30-year lease cost for the building itself is $36 million more than the estimated cost if we build the same building ourselves and issue debt — $90.6 million in lease payments versus $54.2 million of debt payments if we build it ourselves.  Apparently there are lots of “intangibles” that need to be considered.
  • Library Expansion – Somehow the cost estimate for the library expansion leaped from $8 million to $14 million in a few short weeks.  Things move fast in Scarborough!   But remember, it’s “the library’s turn” in the long-range capital plan.  
  • New primary school – We’re not sure if this is going to be a K-2 (Kindergarten through second grade) school or a preK-3 (pre-Kindergarten through grade three) school or somewhere in between.  But we do know that the cost estimates keep growing.  We now look back wistfully at the initial estimate of around $60 million.  Now an amount of $80 million gets bandied about.  Or more. 

Seems like it will be a head-spinning year in Scarborough!


That’s all for now, folks!  We’ll try to keep you up-to-date.  In the meantime…

Be neighborly!

TT Hannah

(nom de blog of Steve Hanly, who is solely responsible for the content of this blog)

 

 

 

Special Election Issue: A Very Ironic Campaign and a Dicey Green Question

Well, friends, the November 5 local election is almost upon us — two Town Council seats, two School Board seats and three bond issues for a cool $4.4 million.  And, as usual in Scarborough, there’s intrigue and mischief in the air!

For instance, what has become of Town Councilor William J. Donovan?  Although he’s running for reelection, he has been pretty much a no-show on the campaign trail.  He was “out of the country” for the traditional candidates’ night at Town Hall earlier in the month.  He was the only candidate who declined to answer the questionnaire sponsored by Road to Renewal, a prominent local citizens’ group.  He was uncharacteristically absent from the last Town Council meeting.  And he hasn’t been sighted at his home-away-from-home (the Town Manager’s office) for quite some time.

One almost has the sense that Mr. Donovan doesn’t want those pesky members of the public asking him questions.

In short, his campaign is low-key almost to the point of invisibility.  Thank goodness he has Will Rowan as his campaign spokesman!  By the way, we are reliably informed that Will is also running for Town Council.

The Irony Campaign – When claims and reality are so far apart

Long-time readers of LookOutScarborough know that irony is one of our favorite things, right up there with bright paper packages tied up in string.  So Mr. Donovan’s reelection campaign is right up our alley – irony heaped on top of more irony.  Where else could someone with his record run as a fiscal conservative? 

Yet his top campaign claim is “providing fiscal leadership!”  Ha!  Please consider: 

  • Messrs. Risbara and Donovan at a September meeting of the Pool Committee.

    Donovan was the driving force behind the incredible tax break – $80 million or more – handed to the Scarborough Downs developers. You remember, the one that gives 40% of new taxes raised from The Downs to the “local boys” (the Risbara and Michaud brothers).   Who can forget that heartfelt triple-pump thumbs-up that Donovan gave the local boys when the tax break of the century passed at the Town Council meeting last November 28?  (Relive that special moment by watching this 22-second clip; the thumbs-up is at the end of the clip. Such enthusiasm!)

 

  • Donovan trumpets the fact that tax increases averaged less than 3% per year during his reign… even though to achieve that average you have to include two years that are completely irrelevant because they were years where the commercial and residential revaluations occurred.  And try selling that less than 3% per year line to the folks whose tax bills increased by 10%, 20%, 30% or more this year due to the revaluation.
  • Donovan is the primary mover behind the current full-court press to build a $30 million-ish pool in Town before we address the increasingly clear need for a major primary school project of $60 million or more. Somehow we are supposed to feel better that we’re going to be leasing the pool from the local boys. (Them again.  Funny how that works, isn’t it?)  As if a 30-year commitment of lease payments is somehow not going to affect our taxes like a 30-year debt commitment will.  Even without the pool, the Town’s debt is projected to increase from the current $103 million to about $160 million in the next two years, primarily because of the school project.

If this is good “fiscal leadership,” we would hate to see poor leadership.  [There must be an Alice in Wonderland quotation that would fit here; we just can’t come up with it off the top of our head.]



 

Green the Taxpayers!

Among the various campaign signs that currently grace our roadsides, you may have noticed some with the cryptic message: “Green the Fund.”  What the heck is that all about?  Well, here’s the scoop:  The Town is asking for approval to issue $2.5 million of bonds to pay for future, unspecified acquisitions of conservation land.  This is referendum Question 3 on our local November ballot.

Now don’t get us wrong… we’re all for preserving green space.  But the question is, how to do it?  We are near the end (we hope) of updating the Town’s Comprehensive Plan.  This is where broad land-use decisions are made for subsequent development of zoning regulations.  Not a bad way to encourage conservation at no cost to the Town.

And how about the old-fashioned method of raising funds privately to acquire important conservation properties.  Again, no cost to the Town… except the lost future taxes, to the extent that the property’s assessed value is reduced when it becomes conservation land.

Speaking of cost, what will Question 3 cost us if voters approve it?  Well, according to the Scarborough Land Trust, the annual cost of the bond issue to the average homeowner will be a mere $13.95 (about the same as a crab roll plate at Ken’s).  So, if there are roughly 8,000 households in Scarborough, that’s a total of nearly $112,000And that doesn’t include any tax revenue that the Town may lose as the land’s assessed value decreases in connection with it becoming conservation land.  (By the way, if you look at the “fine print” under Question 3 on your ballot, you’ll see the costs of total debt service of the bond issue “[a]t an estimated maximum interest rate of 5% for a twenty (20) year maturity” of $3,885,417; that’s about $194,000 per year.)

Hmmm…  Forget that crab roll plate.  $112,000 is the starting salary of a couple of teachers or firefighters or police officers.  All of a sudden we’re talking real money.  And facing the stark reality that most taxpayers do not have a limitless pot of money.  And recognizing that priorities must be set.  That, dear voter, is your job when you vote on Question 3, as well as the other two referendums.  This is one of those rare opportunities where you directly participate in setting the Town’s priorities.  Choose wisely on Question 3!


Brown the Beach!

If you have been to Higgins Beach within the past week, you have probably seen — and smelled — the Town’s most recent effort to prevent Mother Nature (in the guise of the Atlantic Ocean) from washing away part of Bayview Avenue.  A substantial quantity of what is described as “composted seaweed” has been dumped on the beach and pushed up as far as possible on the shoreline.  Somehow this is supposed to be an erosion fix, but we expect it will be completely washed away – and then some – by the next big blow from the southeast.

We’ve never experienced composted seaweed before.  If you haven’t either, let’s just say that in appearance, consistency and odor it is a dead ringer for cow manure.  Let’s hope that this is good, organic composted seaweed – free of chemicals and harmful microbes.  Can you imagine the trouble the Town will be in with the US Fish and Wildlife Service if we have laced the beach with nasty things that cause harm to our beloved piping plover population?  Woe unto us!

Next Time, for sure!

We seem to have prattled on and on here, perhaps because of the importance of the election issues.  While we have several more topics to cover, it’s probably best to save them for another time.  Perhaps right after the election.

Pool update:  Our own ace reporter, Jeremiah Hacker, has been closely following the activities of the Ad Hoc Community Center Advisory Committee (aka, the Pool Committee) and is preparing a story that will share information you won’t see anywhere else.  We think it may create quite a splash!

Debut of New “Literary Corner” Feature:  The readers have spoken!  We have listened!  A new initiative to class up this humble blog.

New Contest Announced!   Everybody loves a good contest.  Wait til you see what we will spring on an unsuspecting public.


That’s all for now, friends.  Happy trails until we meet again!

Be neighborly,

TT Hannah

(nom de blog of Steve Hanly)

 

Scarborough Community Center Controversy

Happy summer, Scarborough friends and neighbors!  It won’t last long, so enjoy it to the fullest.

After a six month sabbatical, your editor is back – rested, relaxed and raring to go.  And how thoughtful of Town leaders to provide a huge controversy as a welcome back gift!  We refer, of course, to the new “Community Center” that is barreling down the familiar tracks of “behind the scenes” activities and “informal” negotiations.

What, you didn’t even know there was a controversy?  Well that’s precisely the idea!  Certain Town leaders (the usual suspects)  would much prefer to keep us ordinary citizens in the dark about these crucial decisions until after their plans have been finalized and the propaganda campaign has been fine tuned. 

So just what is going on with the new “Community Center” and why should you be scared out of your taxpaying wits?   Here’s a quick summary of what’s happening…

You may recall that the $80 million-plus tax break that the Town gave to the Risbara/Michaud brothers for the Scarborough Downs development included very vague language about a community center being built – potentially – on the Downs property. We were assured that there would be a robust process of public consideration of any potential community center, including its components and its costs.  That was less than a year ago.

But now – with no public input – it has become clear that those rascals at Town Hall have been up to their old tricks.  The community center seems to have now morphed into an athletic venue/sports complex, and the developer/contractor/operator of the new facility has been chosen.   (Not officially chosen, of course. Why sign anything when an understanding among the boys will do?)

Scarborough residents Rocco Risbara and Peter Michaud

In retrospect, we should have seen this coming back in April when Risbara/Michaud (“local boys,” you know) signed an agreement with Edge Sports Group (Massachusetts boys) “to pursue an athletic venue at The Downs.”  Edge Sports Group (ESG) develops and manages high-end athletic facilities.  Their April 23, 2019 press release notes:  “The Scarborough facility could include pools, ice rinks, indoor and outdoor fields, spectator areas, and other activity space.”  The press release also provides a timeline: “ESG intends to complete its due diligence this summer, with design and permitting immediately following.”

And The Downs’ website currently announces:  “Construction will begin this summer and the complex will open in Spring of 2021.”  As far as we know, the Planning Board hasn’t seen even a drawing on the back of a napkin of this facility.  But construction will start this summer!  Now that is a fast-track project if we’ve ever seen one!  Perhaps they’re participating in a special Xpress-Approval instead of that usual pesky review and approval process.


So, right off the top of our head, here are a few basic and troubling questions:

  • Where’s the promised public process?
  • What do we mean by a “community center?” What does it include?  Isn’t that different from an “athletic venue” or “sports complex?”
  • When did the residents of Scarborough decide that a community center/athletic facility was a priority over a new primary school and library expansion?  [This is a biggie!]

  • How has Risbara/Michaud’s selection of a developer for an athletic facility been turned into the Town’s selection of a developer for a community center? How did that happen with no public discussion?
  • Why is Risbara/Michaud’s developer, Edge Sports Group, “conducting a feasibility study to determine what type of amenities should be included within The Downs facility”?   Shouldn’t the Town determine what sort of “amenities” are part of the Town’s community center?
  • Why is the athletic facility developer setting the timeline?  Did they do that without consulting the Town?  It’s hard to believe that could happen, unless the project is totally private with no expected Town financial participation.

There are obviously a host of other questions that need to be answered.  We’ll tackle some of them next time.  But for now, here are a couple of relevant considerations Scarborough citizens need to be immediately aware of:

How do Scarborough residents feel about a community center?

Sure, having a community center sounds like a great idea – especially when cost considerations are ignored.   Who could object to a facility to which the following terms can be applied: friendly, welcoming, gathering place, multipurpose, multigenerational, amenities, centrally located, creative, sustainable? 

Actually, though, when Scarborough residents were asked less than a year ago about their desire for a community center, the results didn’t indicate a burning desire for a community center, even without considering what would be included in it or how much it would cost taxpayers.

This is an except from last summer’s Comprehensive Plan survey which was completed by more than 500 residents.

In a fairly well-publicized resident survey conducted in late summer 2018 in connection with the Comprehensive Plan (where is that Plan, anyway?), only 40% agreed with the idea of  “develop[ing] a community center facility, attracting all ages to a central location.”  About 27% thought “maybe” it was a good idea, while about 32% disagreed with the idea.  So the very basic question “do we want a community center?” has not even been answered.  But why would a little detail like that get in the way of the “vision” of certain Town leaders?  Full speed ahead!

Is a community center a priority for the residents of Scarborough?

Like beauty, a community center may be in the eye of the beholder. The concept of community center can mean very different things to different people – from a simple gathering place to a high-end athletic venue with pools, hockey rinks, basketball courts, indoor fields and a fitness center.  As a result, the costs of a community center can vary widely.

The number bandied about in previous discussions of a Scarborough community center has been $20 million.  However given the scope of other Edge Sports Group facilities, perhaps $25 to $30 million is a more likely price tag.

So the question is – as it has been for a couple of years now – does it make sense to build a $25-30 million high-end sports complex now when we have active proposals for a $60-ish million primary (K-2) school solution and an $8 million library expansion?  Remember, our current debt level of around $100 million is among the highest on a per-person basis in southern Maine.

And to anticipate one of the phony arguments that will surely be presented when this proposal finally sees the light of day:  We will be told that this deal will be structured so there is no Town debt issued in connection with this project.  Undoubtedly the “deal” will be complex and difficult to understand.  But do not be fooled… we, dear taxpayers, will be paying for this project, even if there is no debt involvedThe no-free-lunch principle remains stubbornly in effect.

And remember, whenever you hear the phrase “public/private partnership,” grab your wallet and hold on tight!

In summary, folks, here we go again.  Down that well-worn path where a few Town leaders have their way and the public be damned.  Please keep your eyes wide open and your (metaphoric) pitchforks within easy reach.  We’re hoping the Town will soon let the residents in on the “behind the scenes” discussions that have been going on for the past four months.  Please stay tuned!  Yes, these are those lazy, hazy days of summer, but this one can’t be allowed to sneak through!

 Coming Attractions

We will definitely keep you informed as the Community Center/Sports Complex story unfolds in all its sordid glory.  And there’s lots more good stuff that wouldn’t fit into this issue.  Among the features coming very soon are:

***  A tribute to long-time Town Councilor Shawn Babine including details of a “Councilor Crawl” event that’s being talked about for the Labor Day weekend.

***  A new feature dedicated to Scarborough’s arts and literary scene, showcasing new and forthcoming works by Scarborough authors.

A Personal Note

My sincere thanks to the loyal readers who emailed me during the winter/spring hiatus.  Your encouragement and thoughtfulness were much appreciated!

It’s great to be back in the saddle!  From which location I now wish you all…

Happy trails until we meet again!

TT Hannah


 


Santa Trapped in Community Center Chimney and other Scarborough Christmas Tales

Ho, ho, ho and other politically-marginal seasonal greetings!  It’s been a while since the last blog update, which means there’s lots to cover.  So let’s get right to it…

Christmas came early for the developers of Scarborough Downs – a nice commitment of more than $80 million of future Scarborough tax dollars in a sweet Credit Enhancement Agreement all wrapped up with a bow.  On November 28 the Town Council voted 4 to 3 to approve the deal.  The ayes were Donovan, Caterina, Babine and Foley… names that will go down in history, one way or the other.

The signing of the Agreement effectively ends the first chapter of what will be a 30-year saga of the Scarborough Downs development.  Just how and when the saga began will likely remain shrouded in mystery.  We know that the developers closed on the sale of the property in January, 2018.  What we don’t know is what discussions took place between Town officials and the developers prior to the sale of the property with regard to Tax Increment Financing (TIF) and Credit Enhancement Agreement (CEA).  We doubt that the developers plunked down $7 million-ish for the property without having a fairly clear understanding of what the Town was willing to kick in.  We’re not suggesting anything nefarious here… just highlighting the reality of how this deal very likely occurred.

How many times during the discussion of the deal did we hear that mournful story of how more than a dozen previous attempts to develop Scarborough Downs – probably the best piece of developable property in all of southern Maine — fell through because the other developers hadn’t been able to come up with a financially viable plan?  Of course, if those previous developers had gotten the ear of the right people in Town and discovered that $80 – $100 million of taxpayer subsidy was available, probably a deal would have happened years ago.    Knowing the right people, apparently, is the big advantage of being “local boys.”

The End of Chapter One

As noted, chapter one of the Downs Deal ended with the Town Council vote on November 28.  A vivid image that encapsulates the entire cozy relationship between the Town and developers came just as the vote was completed.  Immediately after the vote, former Council Chair Donovan looked out at his developer buddies in the audience and gave them a robust thumbs-up. 

Some taxpayer Whos saw an altogether different hand gesture.

Now this wasn’t a standard “job well done” thumbs-up.  But a triple-pump “we’re going to Disneyland!” thumbs-up.  It really tells a story.  It’s amazing to see a public official that excited at giving away $80 million of taxpayer funds.  See for yourself by going to the 1:48:45 mark of the Town Council meeting video [link here] Some of us taxpayer Whos couldn’t help but see an entirely different hand gesture involving a different finger as chapter one came to an end.

 

Santa Gets Trapped in the Community Center Chimney

So, about Santa getting stuck in the chimney of the new Donovan-Hall Community Center:   Yes, we admit it… it’s fake news!  But it has a legitimate purpose.  Just as Santa is an imaginary character, so too is the Community Center an imaginary building, at least as far as the current deal with the developers is concerned.  The impression has been left that part of what we’re getting for those $80 million of tax dollars we’re paying to Risbara/Michaud is a shiny, spanking new Community Center where we can all meet, dine, swim, hold graduations, recreate and otherwise improve our communityness. 

But it just ain’t so!  All this deal provides is that the developer will sell/lease the Town a piece of land somewhere in the Downs property that he deems appropriate for a community center.  The parcel size, its cost and its location are all unspecified.  And the cost of the building itself – maybe $20 million or morewill all be funded by the Town.  That’s over and above the $80 million the developers are getting.  Such a deal!

A Final Christmas Note

Speaking of the Jolly Old Elf…  If Santa has read the Credit Enhancement Agreement (and we hear he looks closely at such things when making the naughty/nice decision on attorneys), we’re afraid that the Town attorney will be waking up to a big lump of coal in her stocking on Christmas morn.   Sure, she had to give the client what he wanted.  He is paying the bills, after all.  But letting the Town enter into a CEA that was so loosey-goosey with so little specificity and such large financial exposure was going a bit too far.


 

One final comment on the Downs Deal.   For the Town’s sake, we hope all the rosy assumptions that are baked into the Credit Enhancement Agreement come true.  We’ll keep you posted on the project’s twists and turns over the next 30 years.  [Wait!  30 years!?  Well, we’ll keep you posted for as long as we can.]


Coming Soon:  Listening Tour 2019 Edition!

As longtime readers know, irony is one of LookOutScarborough’s favorite things (right after schnitzel with noodles).   So the Town’s decision to reprise the “Listen to Learn” sessions with Town Manager Hall and outgoing School Superintendent Kukenberger made us smile.  The stated purpose of these four public sessions is to get citizen input for the budget process.  Last year’s sessions were all over the place in terms of citizen input, some of which was budget related.

The irony is that Dr. Kukenberger – a highly intelligent and personable individual – is in the “listening” role again.  After listening at length to public concerns last year, she and the School Board managed to incite an unprecedented recall of three School Board members.  So much for effective listening.

Which leads us to a theory about why Scarborough appears to be in a constant state of public discord.  Our take: it’s not a failure of Town officials to listen to the public; they do plenty of listening.  And it’s not even a communications issue.  What’s at the heart of the public consternation is the failure of Town and School officials to process what they hear from the public and fashion that into workable solutions.  Too often our officials – elected and salaried – dismiss the concerns expressed by groups of citizens as those of a “vocal minority.”  Like the two-thirds of voters who recalled the School Board members.

The challenge, then, is for Town and School officials to accurately gauge community sentiment and identify steps that can be reasonably be taken to respond to that sentiment.  It’s much more than listening… it’s acting reasonably in response to community sentiment.  We think the newly-constituted Town Council and School Board get this.  Let’s hope so!

Here’s the schedule of the “Listen to Learn” sessions.  If you have a question about the Town or School budget or a suggestion on a way to save a few bucks, bundle up and come out to join the fun!

 


Survey says…

Name your favorite cannabis strain…

What if they did a public opinion survey… and forgot to tell the public about it?  That’s more or less the story of the Town’s survey on the public attitude toward allowing marijuana-based businesses in Scarborough.  In July the Town Council put a 180-day moratorium on retail pot sales in Town to allow for time to develop an appropriate ordinance to govern the processing and sale of both medicinal and recreational marijuana.  Part of the plan was to do a public survey to see where our collective heads are vis-à-vis commercial pot.  (In the State referendum on legalizing pot two years ago, Scarborough voted 6,673 to 6,061 against legalizing marijuana.)

So that survey has now been completed.   Sort of under the cover of darkness.  A far as we can tell, there was no or minimal mention of the survey’s availability on the Town website or newsletter or in the Leader (which now seems to be mostly concerned with local theatrical productions).  In fact, the only way you could learn of the survey was if you happened to stumble upon the two laptops that were the only way to access the survey.  The laptops were available – under the watchful eyes of Town leaders who sat there while you completed the survey – at early voting at Town Hall or at the Town table at the High School on election day.  So you will be excused if this is the first you have heard of the pot survey.

Now that the survey has been completed, stay tuned for the results, such as they are, at the next Ordinance Committee meeting, currently scheduled for January 17.  Feel left out of the loop in sharing your opinion?  Let the Town Council know.

(Interesting bonus fact:  There are at least 11 currently known pot-growing locations in Scarborough.  But no one seems to have a clue what the real total is.)

Another Survey… Improving Route 1

Speaking of surveys… There has been much better publicity and accessibility for a survey that is part of yet another study of improving Route 1.  According to the Town website, “[t]he purpose of this study is to make the Route 1 corridor safe and accessible for all travel modes.”  The key words here are “for all travel modes.”  In transportation consultant lingo that means for pedestrians and bicyclists. 

Route 1 with Walgreen’s at lower left. (Photo from SEDCO.)

While safety for all is obviously a worthwhile goal, some transportation planners can get carried away with their anti-automobile zeal.  Route 1 serves many purposes.  Improving it will be a difficult balancing act.  We fully support a study of Route 1 that results in reality-based recommendations that improve its use for all users – walkers, bikers and drivers.

The survey is short and to the point. Please consider taking a couple of minutes to complete it.  Here’s the link or access it through the Town website.

 


Just in Time for Holiday Giving…

The Scarborough Real Estate Taxes Gift Card!

The perfect gift for that person who doesn’t have everything!

(No, this isn’t for real.  But perhaps it should be.)


That’s all for now.  Look for our Year In Review issue coming soon!

Once again, a sincere thank you to all the readers who have encouraged this blog.  (And also to those who have tolerated it.)

Merry Christmas, Happy New Year and/or Best Wishes of the Season!

Be neighborly,

TT Hannah

(Nom de blog of Steve Hanly who is solely responsible for its contents.)

The biggest bet ever placed at Scarborough Downs… and it’s our tax dollars!

Pour yourself a kale spritzer, sit back and hear all the latest about the massive tax break our Town Council is considering for the Risbara and Michaud brothers.  First, let’s review what we’ve learned about “the Downs,” as the new development is now called, in the three weeks since our last update…

Well, that’s an easy one: absolutely nothing.  Lips are sealed all around about what the project really will include.   There’s still no information about how many single family homes and apartment units will be built.  And what that will mean for increased population, increased school enrollment and increased traffic.  All we know is that those things are all going to increase a lot.  That’s not very comforting.

Here’s an example of a recent Risbara multi-family project (i.e., apartments) in Westbrook.  It has the idyllic name “Blue Spruce Farm Apartments”  (link here).  How many great box-like apartment buildings will be sprouting up at Scarborough Downs?

Blue Spruce Farm Apartments, Westbrook. (Image: Zillow)

And where are all the people coming from to fill these apartments?   You may have noticed lots of new apartment construction in Scarborough, Westbrook, SoPo, Falmouth and Portland during the last 12-18 months.  That fact, coupled with projections for very modest long-term population growth in Scarborough, should be a cause for concern.  Are town leaders familiar with the phrase “boom and bust cycle?”  Have they reconciled current and planned area-wide apartment construction with population projections?  If they have, we hope they’ll share that information with those of us who have limited fathoming ability.

So we don’t know what the project looks like or what its impact will be, but we’re willing to kick in a hefty chunk of future town tax revenues over the next 30 years — $150 million or more apparently — to help pay for this undefined project.  The largest financial commitment the town has ever made.  And then a seven-person Town Council is going to use their judgment to decide whether this is a “good deal” or not for the town.  Sorry, but we want the details!  Is that too much to ask?  And then we want the voters to decide if this is in the best interests of the townThe voters should have the final say on any TIF/CEA, not the Council.


Downtown Lowdown

As we mentioned in our last issue, the town’s and developer’s big selling point for the TIF/CEA is that Scarborough will finally get its much-longed-for downtown or town center.  We’re not certain exactly who has been pining for this downtown, or why.  Is it a Disney thing?  Or a nostalgia thing?  Will there be a 5 & 10?  A general store, perhaps with Sam Drucker and Uncle Joe playing checkers in the back?

And we’re not sure of the purpose of this downtown.  Is it to provide a place for neighborly interaction?  If so, isn’t that what now happens at the post office, Memorial Park, Hannaford or Shaw’s, the hardware store, the Big 20 and Ken’s?  Do all those facilities have to be within walking distance for it to count?  Is it reasonable to think that a supermarket, a post office, a bowling alley and a range of restaurants are all going to be within walking distance in any town, let alone one that has 20,000 residents and covers about 70 square miles?

As one long-time Pine Point resident pointed out recently, the town has gotten along quite well for 360 years without a town center.  Perhaps we could go a little longer…


“One of the fastest growing communities in Maine”

Whizzing cars are definitely not a common sight at Dunstan Corner during the summer months. (Photo: Keep Me Current.)

That’s one of the first things you see when you go to the town website.  Frankly, we’re not sure if that’s something to boast about or be concerned about.  Up until very recently, there seemed to be a moderate concern for limiting the town’s growth in a manner that would be steady and measured.  This approach would prevent sudden significant demands on school and municipal budgets.  It would also keep quality of life issues – like traffic – from getting out of hand. 

In fact, until the Scarborough Downs project came up, the town had a fairly rigorous “Growth Ordinance” that had its origin in the 2006 Comprehensive Plan.  The ordinance was designed to keep housing growth at a manageable level.  Whatever happened to that growth ordinance?

And, if the town is already growing at a fairly rapid clip, why the heck are we incentivizing a developer to provide even faster growth?   Think about that very basic question for a moment.


TIF Flashback – The Circle is Complete

Real Scarborough old-timers (who remember, for instance, when Len Libby’s was on Spurwink Road) may get a scary sense of déjà vu when hearing about the currently proposed TIF.  Why?  Well, back in the mid-1980s voters twice rejected construction of a new town hall (aka “The Town Mahal”), only to have a new town hall constructed in spite of their rejections.  How did that happen, you may well ask?  Believe it or not, the new town hall was funded through a “Town Center TIF,” which, of course, the voters had no say on. 

So history is currently slated to repeat itself if Tom Hall and Bill Donovan have their ways.  This time, though, it will be a new community center instead of a town hall that gets built with a TIF in spite of what town residents may think.  Everything old is new again!

By the way, many of those old-timers will also tell you that the town’s storied tradition of having Town Councils that ignore what the residents want began with those town hall TIF shenanigans in the 80s.  And the lack of transparency and unwillingness to consider the desires of the residents continue to feed the beast of public unrest even today.  The establishment of a new “Downtown TIF” in the waning days of this Council would secure their legacy in town history as the group that completed the Circle of Mistrust.


 

On a positive note, voters will actually have a chance to make their feelings known about three of the current Council members in the November election.  Councilor Rowan is running for reelection to the Council, and Councilors Babine and Caiazzo are running for State representative seats.  This presents a golden opportunity for folks to express their dismay with the we-know-better attitude of several of the Council members.

The 2017-18 Town Council has their class picture taken by a member of the Scarborough Police Department. (Note: This image was NOT Photoshopped in any way.)

It’s Scarborough’s future… let the voters decide!

Here’s the bottom line: Whatever happens at Scarborough Downs has the clear potential to radically alter Scarborough as we know it.  And the financial implications of the town being a “partner” or “investor” in the development are completely unknown at this point.  To the extent that great gobs of future tax dollars ($150 million or more) are siphoned off for development/infrastructure purposes, this has the very real prospect of putting extreme pressure on the school and municipal budgets… for which all taxpayers will end up paying the price.

Is it too much to ask for the town’s residents to have a clear understanding of what all this means, both in terms of finances and quality of life?  And once the town has negotiated its best deal with the developers for a TIF/CEA, shouldn’t the residents have a chance to vote on it… like we did on the new fire engine and the new public safety building?  Please, Town Council, let the citizens have a direct voice in deciding the most important question the town has faced in decades.

[For a more temperate discussion of the TIF/CEA issue, please see the “Maine Voices” op-ed in the September 10 Portland Press Herald: “Scarborough, hold your horses when it comes to tax increment financing.”]


Until next time…

Well, that’s all for now, folks.  More drama is certain to come.  We’ll do our best to follow the twists and turns.  In the meantime, don’t be bashful about spreading the word and letting the Council know how you feel.  Silence to them equals approval.  So make a God-awful racket!

Happy trails until we meet again, pardner!

Be neighborly,

TT Hannah

 

 

 

Tax Break Travesty in Scarborough… $150 million!

Well, folks, this is the BIG ONE.  From those same wacky guys who brought you the Amazon headquarters proposal, here comes an only slightly less outlandish proposal.  But a much more serious one.  Indeed, deadly serious in terms of Scarborough’s financial future, not to mention our quality of life.

Mega-Boondoggle!

Artist’s rendition of Scarborough’s new “downtown”

Yes, Town Manager Tom Hall and Council Chair Bill Donovan are at it again.  This time Messrs. Hall and Donovan have put their heads (and egos) together and come up with a scheme to create a new “downtown” for Scarborough… and all for a mere $150 million of future tax dollars being paid to the developers.  This is the mother of all tax breaks.

This proposed mega-boondoggle uses two taxpayer fleecing vehicles: a tax increment financing agreement (“TIF”) and a credit enhancement agreement (“CEA”).

Please do not panic!  TIFs and CEAs sound intimidating but they just boil down to tax breaks for the developers.  At the most basic level, TIFs and CEAs just divert negotiated amounts of future property tax collections to a developer.    And when the developer gets a chunk of those future tax collections, those tax dollars aren’t available to support the schools, police/fire and other Town services.  And guess who makes up that future shortfall?  Bingo!  That would be you and me, dear Taxpayer!

Yes, the mechanics of TIFs/CEAs can get kind of hairy and complex, but don’t get lost trying to follow all the ins and outs.  That’s what they’re hoping for… that we’ll say to ourselves “Oh, gosh, this is too complex for me” and then decide to leave it to the “experts” on the Town Council.  Just stay focused on the basic premise: every future tax dollar that ends up in a developer’s pocket has to be replaced by another one from your pocket.


What we know at this point

The August 15 Town Council workshop that was supposed to unveil the Scarborough Downs development plan and the related taxpayer fleecing was a complete bust in terms of providing usable information about the project and the related TIF/CEA.  Only the vaguest information was presented.

But here are three important things we do now know:

  • This is the largest development project in the Town’s history – it is projected to add $600 million of real estate (apartments building, single family homes, retail/office space, etc.) to the Town’s total valuation.
  • The proposed tax breaks stretch over the next 20-30 years.  Its tax impact will last for a generation.
  • Bill and Tom are planning to ram the TIF/CEA tax breaks through the approval process during October, come hell or high water.  That’s right, we’ll have about a month to understand and evaluate the largest financial transaction the Town has ever entered.  (Remember how long we spent discussing the animal control ordinance a couple years back?)

What we don’t know

There are so many critical things that we don’t know.  Like the real total of the proposed tax break.  They won’t tell.  The $150 million amount is only a rumor.  No one has any idea of the projected budget or tax impact of the proposal. (Or if they do, they’re not telling.)  And then there are basic things like:

  • How many apartment units are planned?
  • How many single-family homes?
  • What’s the projected population increase?
  • What’s the projected school enrollment increase? (And will existing facilities accommodate it?)
  • What type and volume of retail activity is projected?
  • What type and square footage of “light industrial” activity is projected?
  • What are the projected traffic impacts on Route 1, Payne Road, etc.?

No – incredibly – the fact that those questions have not been answered doesn’t appear to bother most Town Council members.  As of now, we are absolutely clueless about the impact of the project on the Town over the next 10-20 years, but that doesn’t matter to them.  Let’s sign that agreement for a $150 million tax break to the developers for a project that no one really understands.  And let’s do it in the next 30 days!  (They are local developers, after all.)  Ahh, the joy of public/private partnerships!


Hardball Negotiating 101, Chapter 6

Don’t you love it when someone tells you that you have to “act in the next 20 minutes or this incredible deal is off.”  This hardball negotiating tactic – setting an artificial and unreasonable time deadline – actually has a name: “the exploding offer.”

Here’s how one negotiator describes the tactic:

Exploding Offers (artificial deadlines) – an exploding offer contains an extremely tight deadline creating pressure on the other party to conclude quickly.  The purpose of the exploding offer is to limit the time the other party has to consider alternatives.  (Andrew Boughton in Hard Bargaining, Negotiation Basics.

So here we have an exploding offer from the Scarborough Downs developers who maintain that if the TIF isn’t approved asap, the deal can’t happen.  They maintain that the commercial tenants they have lined up need to know right now that this project is happening; otherwise the prospective tenants will walk.  As the old saying goes: “I may have been born at night, but it wasn’t last night.”

Bottom line: this 30-year deal that provides the developer with a $150 million tax break has to be approved at the October 3 Town Council meeting or the whole deal is off.  If there were ever a bluff to be called, this would be it.

But wait, the Town Council is actually supporting this absurd schedule.  And of course, you and I, simple-minded rubes that we are, are not supposed to figure out the real reason that the TIF has to be finalized in October.  The real reason is that the current 5-2 Council voting bloc may well disappear in the November election, making it uncertain that the TIF deal will fly with a new Town Council in place.  Thus the headlong rush to approval with an irresponsible lack of regard for the financial implications of the agreement, let alone public understanding and concurrence with the deal.  (Fiduciary responsibility, anyone?  Anyone?)


Who promised what and when?

Speaking of how naïve we dimwitted taxpayers are… they think we don’t realize that this deal has been in the works for many months.  The developers closed on the property in January.  We would be astounded if the basics of the deal between the Town and the developer hadn’t been agreed to well before the property was purchased.  Nothing in writing, of course.  More like a gentlemen’s understanding, probably.

Who in their right mind would purchase a property that was going to require a $150 million tax break from a town in order to be successful without first having a very high degree of certainty that such a tax break would be forthcoming?  Only a very dumb developer would buy the property without knowing that a tax break was pretty much in the bag.  And the Five Brothers are not dumb developers.

Apparently the numerous previous prospective buyers of the Downs couldn’t arrive at a similar understanding with Town officials.  It pays to shop locally!


A Lesson Not Learned – Is It Just Blinding Arrogance?

You would think that after three School Board members were recalled (by a lopsided margin) that it might occur to the remaining Town leaders that they’re doing something wrong.  But, nooooooo, not our Town leaders!  They have an amazing gift of avoiding introspection.  So the bad behavior – lack of transparency, lack of respect for the public’s wishes, failure of processes – continues. And in the case of this TIF, with potentially devastating consequences to the Town in terms of both finances and quality of life.



Coming soon…

Well, that’s it for now.  Part 2 of this blog will follow in the next week or so.  Here are a few of the topics that will be covered:

  • More questions to ponder about the project and the deal
  • What the Enchanted Village (the new downtown) may look like, with exclusive New Urbanism  design features by a pricey Tennessee-based consultant
  • Into the Way-back Machine: how past TIFs/CEAs have worked out for Scarborough
  • Life in a banana republic (no, not the clothing chain)

All that and more.  Stay tuned.  If you’ve enjoyed this blog, please share it with friends.

Happy trails until we meet again!

Be neighborly,

TT Hannah

(nom de blog of Steve Hanly)