HALLOWELL — Concerns remain among some city officials and residents, but Kennebec Valley Gas Co. has Hallowell’s approval for a tax break on a proposed natural gas pipeline.

The City Council voted 5-2 on Monday to approve the third and final reading of a tax increment financing agreement, also called a TIF, that would reimburse the company about $800,000 in property tax payments over 15 years.

“We are very, very pleased with the council’s vote on this,” said Richard Silkman, a partner in Kennebec Valley Gas. “We think that natural gas will end up being very beneficial to the downtown district and to homeowners who are able to connect.”

Gas company representatives have said that they need tax breaks from a dozen municipalities to make the pipeline feasible. Farmingdale has voted down a TIF, and the company is still trying to arrange a vote in Richmond.

“We hope we’ll be able to get it done in Richmond with the TIF,” Silkman told Hallowell councilors. “If it doesn’t happen, then we’ll have to make a determination at that point.”

Hallowell councilors Steve Vellani and Lisa Harvey-McPherson voted against the TIF after echoing concerns raised by several residents who spoke at the meeting.

“I don’t think we even know what we’re voting on,” Vellani said. “I don’t think we know how much of the pipeline we’re going to get or where it’s going to go.”

Vellani also said that the TIF is “corporate welfare” and that he has concerns about the environmental impact of the process used to extract natural gas.

The only resident who spoke in favor of the TIF was Ken Young, who is also executive director of the Kennebec Valley Council of Governments, which has facilitated negotiations between Kennebec Valley Gas and the municipalities through which the pipeline would pass.

Hallowell’s TIF agreement describes a high-pressure mainline to be built through the western, more rural section of the city. There also would be a distribution line running along Water Street, into which businesses and homeowners could connect.

At the city’s request, Kennebec Valley Gas inserted language into the agreement saying that if the plan changes for either line, the TIF would be invalid, and the company would have to negotiate a new arrangement with the city.

Because Farmingdale rejected a TIF, Kennebec Valley Gas is trying to figure out a way to route its main line around the town, which could affect the route it takes through Hallowell.

Silkman said the company will make every effort to extend a distribution line to Hall-Dale High School and Middle School, which are just over the line in Farmingdale.

Getting gas to Hall-Dale Elementary School would be more difficult because it would require construction of a long pipeline up Winthrop Street from the downtown distribution line, Silkman said. Kennbec Valley Gas would need to sign up enough customers to make the line financially viable before building.

If the company builds any lines in addition to the ones in the TIF agreement, they would not be covered by the TIF and would be taxed at 100 percent, Silkman noted.

The TIF would have a lifespan of 30 years and would save Hallowell about $1.3 million in county tax, local support for education and state revenue sharing during that time, according to city estimates.


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