People on the ice during a free skate July 24, 2020, in the Camden National Bank Ice Vault in Hallowell. Joe Phelan/Kennebec Journal file

HALLOWELL — City officials are currently negotiating terms for a possible 10-year extension of a tax increment financing credit enhancement agreement for the Camden National Bank Ice Vault with owner Peter Prescott. Specific terms of this extension, however, are unclear.

What is clear is that Patricia Connors of Hallowell is not in favor of an extension. She recently mailed a flyer to city residents warning them that the city council will soon vote on a “$600,000 tax kickback” to Prescott. Her flyer claims an extension is unnecessary as Prescott already rebuilt the arena after its roof collapsed in 2011.

TIF agreements take place between municipalities and developers or business owners. According to the Maine Department of Economic & Community Development, a TIF allows municipalities to “leverage new property taxes generated by a specific project or projects within a defined geographic district.” Often, developers benefit from getting some funds back on their investment, while communities benefit from a lowered total assessed property value that means they will get more state revenue support.

The TIF agreement for the Ice Vault, which was approved in 2011, pays back 100% of newly created value during the course of 10 years. The assessed value of the property at the time of the agreement was $287,900 and the estimated value of the new arena was $4.3 million.

The initial agreement, according to an August 2011 Kennebec Journal article, was for 20 years. That was later reduced to 10 years, with the stipulation that the Hallowell City Council could either renew it or let it expire at the end of the agreement’s life. According to the city’s TIF policy, that would be June 30, 2022.

“They said they would give us 10 and we could come back for the other 10,” said Prescott. “They didn’t guarantee they’d do it, but they said the door would be open for us to come back.”

Connors’s flyer stated the potential extension is an effort on Prescott’s part to “extend his tax dodge,” and criticized the TIF’s impact on local taxpayers, as the amount saved is less than the amount given back to Prescott. In the August 2011 Kennebec Journal article, then City Manager Michael Starn was quoted saying Hallowell should expect to lose roughly $36,720 annually as a result of the agreement.

With the end of the first 10 years approaching, Connors said she and a friend began researching TIF agreements in Maine. Of the roughly 120 TIFs she researched, she said the Ice Vault pact is the only one to offer 100% back throughout its entire 10-year period.

“There was not one that compared at all to the commercial development of the ice arena with Peter Prescott,” Connors said.

Officials with the Maine Department of Economic & Community Development did not respond to multiple requests to confirm whether any similar agreements exist in the state.

The Camden National Bank Ice Vault on July 24, 2020, in Hallowell. Joe Phelan/Kennebec Journal file

WHAT IS THE VALUE?

Despite loss of tax revenue, area residents in 2011 said the arena creates additional value to the community through its support of school programs and revenue for nearby businesses.

“Yes, there’s an impact on taxpayers, but there’s also a benefit,” said Hallowell Mayor George Lapointe. “Local schools play there, and it’s the only private arena of its kind within about 30 to 40 miles.

“We try to look at the impact on taxpayers,” he added, “but also the impact on the economic health of our town and adjacent towns.”

With the rink on the city’s border with Augusta, Connors speculated that most visitors likely opt to visit the state’s capital, not Hallowell.

“None of these decisions are just about the amount of taxes, they’re about the benefits to the community,” Lapointe said. “I know people whose kids have played on teams there. I know adults who have played there.

“I’ve seen people downtown taking advantage of restaurants and other establishments after hockey games and practices,” he added. “I think it’s an attraction that brings people not only to Hallowell, but to all the surrounding communities.”

While the agreement is not finalized, Lapointe said there have been discussions about decreasing the percentage Prescott will receive back for the final five years. He could not, however, say specifically how much it would be decreased.

Even if the amount was less, Connors said she would not be in favor of an extension of the agreement.

“I feel that Mr. Prescott has received over half a million dollars from the town, and the job is finished,” she said. “So for him to come back with his attorneys and ask for 10 more years, … I just think that’s extortion.”

While he said Connors has the right to distribute the mailer, Prescott felt the information was “not even close” to accurately representing the situation, and that it implies he is not thankful to the city for their help.

“If the city of Hallowell hadn’t have done what they did, we wouldn’t have been able to rebuild the ice rink,” he said. “We have no gripe whatsoever; they’ve been very fair.”

Prescott and the city are still working out the terms of a potential extension, which he said would help the arena stay afloat.

“We’re just trying to get it to work as a team, and what we really need is the city’s help, and the sponsors’ help,” he said. “Without them it wouldn’t be feasible, because we’ve put money back into it every year since 1973. We’ve been taking care of other things that people need in the community for over 60 years, and we can’t do it all.

“She’s saying we can afford to do it, and that is true,” Prescott added. “If we stopped doing everything else, we probably could put money into the ice arena, but I don’t think that’s the way it should be done.”

He was referring to financial support he has given to various other community organizations, for which he has been recognized, including the Kennebec Valley Chamber of Commerce’s 2019 Special Service Award for his long-term community commitment. In addition to rebuilding the rink, Prescott was noted for his effort to bring the Great Race — an antique, vintage and collector car endurance road rally — to central Maine in 2018.

In addition to other central Maine organizations, he has supported the Boys & Girls Clubs of Kennebec Valley, which offers child care and programming in southern Kennebec County, and in 2018 underwrote the cost of sending 850 students in the Gardiner-area school district to see “The Polar Express” at Johnson Hall.

Prescott said it’s important to note that the taxes on the facility were paid in full for the first 40 years of its life, and that over that time they have fostered a positive community relationship.

“What we’ve done with Hallowell is let their schools go there for free,” he said. “They take the kids there by bus, and we’ve let citizens go in there and skate, so we’ve tried to work really closely with them.”

The only spectators were Messalonskee’s cardboard cutouts during a game against Cony/Monmouth/Hall-Dale on Feb. 27 at at the Camden National Bank Ice Vault in Hallowell. Joe Phelan/Kennebec Journal file

THE COST OF DOING BUSINESS

Without the TIF offsetting taxes, Prescott said he would have to consider turning the facility into a 501(c)3 nonprofit, which means he would not have to pay any taxes. He said he’s apprehensive about going down this road, as it may lead to him losing control of the facility.

“I’ve wanted to keep control of it so we could keep it as an ice arena,” said Prescott. “I’d be a little nervous to go into a charity. We could try to structure it so if anything ever happened, and anyone tried to make it so we don’t have an ice arena, we could still get it back.”

During a normal year, he said the facility is “very, very expensive” to operate, but like many other businesses they were also hit hard during the COVID-19 pandemic.

“We paid the taxes for over 40 years,” Prescott said. “The rink has never made money, period.”

When the rink was built in 1973, he said the looming energy crisis caused oil prices to skyrocket, and that they were never able to catch up. Prescott said on average the facility loses between $50,000 and $60,000 annually.

“And that’s if we have a good year,” he said. “The pandemic wiped us out, but we’re not counting that.”

For the entire life of the arena, Prescott said there were only three or four years where it came close to breaking even. He said weather also makes an impact, with summer heat putting a strain on equipment and winter storms discouraging people from going to skate.

According to the Ice Vault’s General Manager Bill Boardman, the facility sees between 500 to 600 people on a good day during peak times. During a typical busy weekend before COVID-19, he said about 200 people would participate in public skating, and that there would also be multiple games throughout the day with up to 100 attending each.

“We’d have several hundred people throughout the day during peak times,” Boardman said. “It was very busy.”

He said the facility, which has about 42,000 square feet of usable space, is expensive to operate and that while prices fluctuate from year to year, annual expenses average between $500,000 and $600,000.

During the busiest seven to eight months of the year, Boardman said roughly 15 to 20 people work at the rink, with four full-time employees.

He agreed that without the TIF agreement, it would be difficult to continue operating the facility, especially since the pandemic cut its revenues by 41%.

“We’re talking about a facility that’s built to have 500 to 1,000 people in it buying food and having conferences in the conference center, being brought down to around 50 people total,” Boardman said of the pandemic’s impact on the facility. “It eliminated any food sales we had, and social distancing eliminated the in-person meetings we used to do. It was very dramatic.”

“For a while we couldn’t even be open,” Prescott said. “It’s really thrown a monkey wrench into the works. We had to suffer like everybody else.”

Peter Prescott, owner of the Kennebec Ice Arena (now the Camden National Bank Ice Vault) and chief executive of Everett J. Prescott Inc., speaks during the ground breaking for the ice rink on Feb. 16, 2012, in Hallowell. Joe Phelan/Kennebec Journal file

OPPOSITION FROM THE BEGINNING

While the preliminary application for the TIF passed in 2011, it did face opposition from councilors Steven Vellani and Lisa Harvey-McPherson. Both were quoted in a 2011 Kennebec Journal article explaining their reasons for opposing the application.

Vellani said he was apprehensive about giving any entity a 100% TIF, and McPherson said it was the beginning of a slippery slope, adding that only about 5% of the city’s residents likely used the arena and it would not come close to benefitting the majority of the city’s population.

The Kennebec Journal reported in 2011 that Prescott would be the only borrower on a $2 million bank loan to fund the facility’s rebuilding, and that the bank told him they would only give him the loan if Hallowell approved the TIF agreement.

Councilor Philip Lindley, who chaired the city’s TIF Review Committee at the time, was quoted saying that 20 years “seems like an awful long time to give a tax break to a private entity.” Committee member Joel Davis was quoted saying that the TIF agreement would be more than just “an economic development proposal.”

Members of the public also came to show their support for the TIF before it was first approved, with Skating Club of Maine founder Priscilla Millier breaking into tears when describing the arena’s impact on her son John, who became a nationally recognized ice dancer. Peter Thompson, head of the Kennebec Valley Chamber of Commerce, delivered a letter to the committee in 2011 explaining that the arena has stimulated adjacent businesses to the point that some business owners were concerned about a lack of sales after the facility collapsed.

Lapointe said the city has not yet set a date for a public hearing on the matter and that it is not on the agenda for council’s July 12 meeting.

“Whatever Hallowell decides, we’ll live with it,” said Prescott. “They’ve been kind enough to help us for the past 10 years.”

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