GARDINER — City councilors Wednesday night will consider a new tax break policy designed to encourage major infrastructure improvements to downtown buildings.

The tax incentives in the proposed policy are larger than Gardiner has granted to businesses in the past, but city officials say the targeted development, including hotels and the installation of elevators, would fill identified needs and lead to more downtown investments.

The City Council will consider whether to approve the new policy at its 7 p.m. meeting.

Businesses in the downtown tax-increment financing district can already seek credit enhancement agreements to defray the cost of development. This policy would be different in that it sets specific percentages of tax breaks developers could receive for different types of investment.

The policy is part of a comprehensive business incentive program being developed by Gardiner Main Street in collaboration with the city, the Gardiner Board of Trade and the Bank of Maine. The program, which is expected to be finalized by Dec. 15 and in use by next May, will provide forms of funding to lower the cost for businesses looking to open locations downtown or for existing businesses to expand.

Gardiner Main Street Executive Director Patrick Wright will give an overview of the program Wednesday night, along with a recap of the work done this year by the downtown development organization.

The proposed credit enhancement policy is the city’s portion of the program.

Wright said the policy will allow him and Nate Rudy, director of economic and community development for the city, to provide guidelines to businesses on what to expect from the city for funding assistance.

Tax-increment financing, or TIFs, allow municipalities to freeze the value of properties on the tax rolls and give part of the tax revenues that would have been earned from future construction back to developers through credit enhancement agreements.

The five current credit enhancement agreements between the city and private companies range from 25 percent to 50 percent, according to City Manager Scott Morelli, meaning the businesses get back those percentages of the tax revenue paid on new construction.

The new policy being proposed by Rudy includes credit enhancement rates for the development of second and third floor residential units, second floor office space, hotels and elevators. It proposes to give 100 percent of new taxes for hotels and 75 percent to 100 percent for elevator construction, depending on the number of buildings served. The other uses would have agreements for 50 percent or less.

Morelli said attracting investments like a hotel or upgrading downtown buildings with elevators, even if the city won’t see the additional tax revenue during the 15 to 20 years of the agreements, will increase the property value of other buildings and lead to more investment downtown.

“It is a departure from anything that’s been given in the past, but those are two clear economic development goals that the city has had for many years,” he said.

Rudy said the policy, along with the comprehensive business inventive program, will signal to developers that the city is eager to work with them on downtown projects. An economic development goal is to increase the number of downtown professional businesses with five to 15 employees, Rudy said, and he hopes the policy will encourage those types of larger developments.

“The downtown is a huge driver in any community. In particular in Gardiner, we have a lot of buildings that have opportunities in their second and third floors,” he said.

The council will also consider:

• renewing the liquor license for the Gardiner Elks Lodge;

• appointing Scott Tenney to the Recycling Committee;

• appointing James Valley, Richmond’s code enforcement officer, as interim code enforcement officer for the city;

• accepting a memorial park bench in the Gardiner Common.

Paul Koenig — 207-621-5663[email protected]Twitter: @paul_koenig