A bicyclist passes the former Maine Spinning Mill in Skowhegan recently. Rich Abrahamson/Morning Sentinel
SKOWHEGAN — The redevelopment of a mill in downtown Skowhegan that was set back by December’s severe flooding scored another loan to help it get back on track, while town officials consider a tax agreement that the developer has said is necessary to move forward.
On Tuesday, the Board of Selectmen approved a $100,000 revolving fund loan awarded by the town’s Skowhegan Economic Development Corp. to Bangor-based High Tide Capital LLC, which is working on a mixed-use development of the former Solon Manufacturing and Maine Spinning Co. mill in downtown Skowhegan.
The Skowhegan loan comes with a 5% interest rate over 11 years, with no payment required in the first six months and payment on interest only in the next six months, according to the terms approved by selectmen.
That adds to a loan totaling $200,000 approved earlier this month that is backed by equal contributions from Somerset County and the county’s Somerset Economic Development Corp.
The Spinning Mill project suffered more than $3.5 million in flooding damage following December’s historic storm, Dash Davidson, a principal of High Tide Capital, said previously. Insurance is expected to cover about $2.5 million, leaving at least $1 million needed in funding to be able to continue work.
As a result, construction at the 80,000-square-foot building largely stopped in January.
Davidson and his partners have been seeking funding from a mix of public-private partnerships such as the town and county loans, which Davidson said are crucial for the future of an important piece of Skowhegan’s ongoing economic revitalization. Plans for the project at 7 Island Ave. include commercial space, a hotel, and both workforce and higher-end housing.
The last piece of the puzzle to get the project back on track is a tax increment financing, or TIF, agreement with the town, Davidson said in January.
Selectmen took up that issue in a closed-door executive session Tuesday night.
TIFs designate an area where a municipality will capture increases in property taxes as a result of commercial investment. The municipality then uses the proceeds to fund specific projects identified by town officials.
A TIF allows the additional value generated by the project to be sheltered, so that state aid for education and revenue sharing would not be decreased and the county assessment wouldn’t be increased.
A credit enhancement agreement, if included in the TIF, would allow Skowhegan to pass along to High Tide Capital all or a portion of the taxes generated from the tax increment created in the TIF district.
A TIF could provide some tax relief for the Spinning Mill project over a defined time period, which would help it service the debt it has been forced to take on to cover repairs.
Jeff Hewett, the town’s director of economic and community development, said the TIF discussion was held in executive session to give selectmen more freedom to ask questions and debate the proposals on the table.
“The only reason that there is an executive session tonight is so that the selectmen, as a body, can come up with one proposal that you are willing to send to the Spinning Mill,” Hewett said. “Everyone is in rough agreement that we want a TIF, but we’ve got different proposals that different people are supporting.”
The town has other TIFs, including one in the downtown area. Selectmen previously considered a TIF during an earlier stage of the Spinning Mill’s redevelopment, but it never came to fruition, according to Chairman Todd Smith.
Selectmen at Tuesday’s meeting said that any proposal they agree on will be discussed publicly before it is moved forward.
By state law, TIFs need to be approved by residents at Town Meeting. The state Department of Economic and Community Development also has to review new TIFs.
“This board does not approve TIFs,” Selectman Charles Robbins said to end the discussion on the matter. “The citizens of Skowhegan approve TIFs. June 10, I would like to see more than 106 people at Town Meeting.”
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