WATERVILLE — Councilors on Tuesday voted 6-0 to allow a tax increment financing agreement to be transferred to a future new owner of the Hathaway Creative Center on Water Street.

Hathaway co-owner Paul Boghossian said the building is expected to change hands Jan. 18. He will continue to own the adjacent buildings — the former Central Maine Power Co. building and the former Marden’s Industrial Building. Boghossian plans to redevelop those buildings with money from the Hathaway sale.

The city is in a 25-year credit enhancement agreement with Hathaway, a former shirt factory Boghossian transformed into retail and office space, as well as 67 high-end apartments on the upper floors with spectacular views overlooking the Kennebec River.

The council must take one more vote to finalize the transfer of the credit enhancement agreement and is expected to consider the second vote at its next meeting, on Dec. 20.

A TIF allows a developer to use money from tax reimbursement to make improvements to a property.

As part of the 25-year credit enhancement agreement, the city reimburses a percentage of taxes paid on the building. In this case, it is a 75 percent reimbursement for the first 10 years and 1 percent less than that for each of the remaining 15 years. The agreement between the city and Hathaway was set in 2007.

Boghossian said before Tuesday’s meeting that Hathaway owners have signed a purchase and sale agreement with a firm that has strong Maine roots and does a lot of business in Maine, but he said he could not reveal the firm’s identity yet.

“They’re very serious about it,” Boghossian said of Hathaway. “They’re doing a very thorough job and due diligence. There’s 25,000 square feet of vacant space.”

Boghossian said he feels good about the Hathaway building, which has 550 people living and working in it. He said the Hathaway development gave Colby College incentive to move forward with its ambitious plans to help revitalize downtown.

“We’ll get it done,” said Boghossian, a Colby alumnus, of revitalization efforts. “There are enough people out there that want it to happen. This is the time for the city to be bold.”

City Manager Michael Roy said the city wants to help the current Hathaway owners in the transition to new ownership. Meanwhile, Boghossian said in response to a question from Council Chairman John O’Donnell, D-Ward 5, about future management of the building, that the new owners will keep its present management.

“And I’m not going anywhere,” Boghossian said. “I own the buildings next door.”

Roy praised Boghossian, saying downtown revitalization started with Hathaway and Boghossian’s purchase and redevelopment of the building.

“Paul, you’re the guy that started all this,” Roy said, to applause from the audience. Councilor Dana Bushee, D-Ward 6, also commended Boghossian for his efforts.

“Thank you. It’s very gratifying to see what’s happening in the city now,” Boghossian said.

In other matters, discussion turned heated over a request to sell 8 Grove St., a two-unit building the city acquired because of nonpayment of taxes, to Brown House Properties for $17,500. Brown House was the high bidder for the property. After outstanding taxes, interest and fees, as well as sewer and water bills are paid as part of the sale, the South End Capital Improvement fund would receive $12,700 from the transaction.

Councilor Jackie Dupont, D-Ward 7, who also heads the South End Neighborhood Association, said Brown House owns a lot of properties in the South End “that are in various states,” and ideally, it is better to sell to people who would live in the homes sold. She said there are problems with the building’s foundation and code problems that need to be solved.

But Mayor Nick Isgro said the city should trust Brown House, which has invested heavily in the city.

“I take offense to labeling Brown House as a slumlord,” he said. “We are not going to sit here and cherry-pick who we are going to sell it to.”

Bushee started to interject in the discussion but Isgro shut her off, slamming the gavel hard down on the table.

“So you can talk, but I can’t?” Bushee said.

Isgro said Brown House issued the best offer and he thought the city should take it.

Roy said the city does not think there is anything structurally wrong with the building but acknowledged the interior is “rough.”

Dupont said the issue is about safety and ensuring the city is following through on code problems. Isgro asked her to name specific problems with the building. She said electrical problems are a big concern.

“It’s going to have to be taken care of,” Roy said.

Resident Julian Payne stood to say there are strict laws that prevent people from selling properties for ethnic or political reasons.

“You pretty much are bound to take the highest bidder and you can’t be screening people,” he said.

Roy said he agreed with Payne.

“We have to screen and trust the bidders who buy the building and fix it up,” he said.

The council voted 6-0 to approve the sale to Brown House.

In other matters, City Clerk Patti Dubois said the city is advertising vacancies on city committees, and fewer people are applying for positions than there are vacancies. Anyone interested in serving on committees may submit applications to her office, she said.

“It’s still early in the process, but usually we have more applicants than vacancies,” she said.

Scott McAdoo, of the Waterville Community Land Trust, showed a video of the Land Trust’s first property, a house at 181 Water St. that has been fully renovated and is up for sale.

Amy Calder — 861-9247

acalder@centralmaine.com

Twitter: @AmyCalder17

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