Monmouth selectmen will ask residents in November whether they want to expand by nearly 100 acres a downtown tax increment financing district.

On Nov. 8, the same day as state and national elections, local voters will be asked to approve the selectmen’s decision to add five empty lots to the district, which consists of a series of privately owned properties stretching from U.S. Route 202 to Maple Street.

Justin Caouette pushes his daughter, Emily, down Main Street in Monmouth on Thursday. Monmouth selectmen have approved placing an item before voters on the November ballot to add five empty lots to the downtown, tax increment financing district. Staff photo by Andy Molloy

The town first established that district in 2013 with the goal of promoting economic development along Main Street.

At the time, Central Maine Power was constructing a substation and line expansion in Monmouth, a project that resulted in about $20 million in investment, according to Town Manager Curtis Lunt.

With the creation of the district and after working out an arrangement with CMP, the town was able divert half of the new tax revenue from the project into an account specially created for economic development purposes.

The town now estimates annual revenues from the TIF to be $120,000, which is split among different funds for property rehabilitation, parking facilities, marketing, streetscape work, town events, economic programs, a revolving loan fund and administrative costs.

“Gradually we’re trying to improve the infrastructure and the business climate,” Lunt said. “We don’t want to radically change it. We just want to make it better.”

Some of the town’s tax financing revenue was used to construct a parking lot at the town waterfront, for example, and an outdoor performance stage is also in the works, said Selectman Timothy MacDonald, who is chairman of the town’s economic development committee.

The committee eventually hopes the beach and boat launch area can be developed in a way that looks like a railroad station to fit with the infrastructure that is already there, MacDonald said.

But to be economically competitive, the town is hoping to strike more tax financing arrangements in the future, leading to more funds for downtown improvements, MacDonald said.

At a regularly scheduled meeting last week, the Select Board approved a proposal from the economic development committee to add five more lots into the district, totaling 99.6 acres in size.

The expansion of the district will require voter approval in November. A public hearing will be held ahead of that vote, probably in October, Lunt said, but an exact date has not been set.

Several benefits accrue to towns with a tax increment financing arrangement.

Collecting tax revenue in a TIF allows municipalities to use those funds for specific uses allowed under state law, including infrastructure, downtown revitalization or economic development projects. By sheltering such money in a financing district, municipalities avoid reductions in state aid to education and other negative tax effects that would occur if the new value in the district simply were added to the city’s total valuation instead of being sheltered.

Of the 19,600 acres of land in Monmouth, 318 are now in the district. The project will continue until 2033, Lunt said.

MacDonald said officials proposed expanding the district so that the town can remain as business friendly as possible.

“There’s a lot of competition between towns for businesses,” he said.

Charles Eichacker — 621-5642

ceichacker@centralmaine.com

Twitter: @ceichacker

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