The Hallowell City Council is considering renewal of a Credit Enhancement Agreement (CEA) tax rebate to ice arena owner Peter Prescott. People are worried that without this 95% tax forgiveness Prescott will close the arena. His present 10-year-old rebate is due to Tax Increment Financing (TIF) law which was written to encourage new businesses in poor communities. The arena is 40 years old and claims never to have made a profit. Hallowell should not use TIF to underwrite such a long losing record. This is Prescott’s problem, not the city’s.

It is often misstated that Prescott has a “option” to renew his CEA. No, only the city has the “option” to renew and there is no justification for another half-million dollars of tax forgiveness.

The council’s consideration of 50% tax forgiveness rather than Prescott’s 95% request merely assures he gets about $300,000 for doing nothing; creating no new tax base; creating no new jobs.  He will come back in 2032 for 10 more years and the city will go 30 years with Prescott paying less than 10% of his taxes. If a homeowner builds a new home, real estate taxes begin immediately.  Prescott has had a 10-year free ride. Hallowell should not make it 20 more.

By merely letting the TIF expire his taxes will go to the general fund for use wherever the council sees the greatest need. This will cost some state aid to Hallowell, but will prevent a 20-year unjustifiable rebate.

Prescott’s personal arena losses are not the city’s problem. Nor is it the council’s job to make everyone think they got something.  The council’s job is to make sound decisions. They should let this TIF and CEA expire. It is time to move on!

 

Patricia L. Connors

Hallowell

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