On Tuesday, city councilors will weigh a new tax break for developer Dave Gendron that could entirely rework the land around Exit 80 with a major retail anchor and much more to follow.

Gendron has told the city he has a major retailer who wants in — but he isn’t saying who it is.

By one city estimate, developing all of Gendron’s property around the Maine Turnpike —  more than 400 acres — could eventually generate $4 million in new taxes a year.

But first, they’ve got to blast — and before that, agree how to pay for it.

Lincoln Jeffers, the city’s economic and community development director, said the first parcel in play is 56 acres next to the northbound lane of the turnpike. Plans call for a 158,600-square-foot unnamed retailer — sized between Auburn’s Home Depot and the Wal-Mart Supercenter — with a half-dozen other small shops edging the parking lot on either side.

In a note to the council, Jeffers said the city has been negotiating with Gendron for months after he approached them with a problem: An unnamed major retailer was interested in building at Exit 80 but “the costs to develop the land for retail far exceeded the amount the retailer was willing to pay for the land.”

Among the issues in developing those 56 acres is the expense of blasting “more than 300,000 square yards of ledge, the relocation of a major pipeline, construction of a large retaining wall and a major rock cut for a road access.”

Gendron has asked the city to pick up the costs of extending water and sewer and making offsite traffic improvements as well as giving him a tax break that will slowly reimburse him for the initial expenses of developing the land.

All parties hope that construction will start next year, Jeffers said. The city wouldn’t start incurring costs until Gendron has a signed agreement with the retailer.

City councilors will hear more details, including projected costs, during a workshop at City Hall on Tuesday at 6 p.m. They’re scheduled to vote on it next week.

Proposed is the creation of Lewiston’s first Omnibus TIF (tax increment financing) District that would cover most of Gendron’s 426 acres in the area. Within that district, Jeffers said, is the flexibility to create smaller TIF agreements.

The first TIF agreement, covering 56 acres, would be structured so that the new tax money from the project would first pay the city back for its investment. Gendron would then see 40 percent of the new tax revenue returned to cover his costs. 

Each new agreement under the omnibus district would have to be voted on by the council. Taxes generated from all new development within the district — whether the city helped on that parcel or not — would go toward paying Lewiston back, followed by Gendron, Jeffers said.

Gendron doesn’t anticipate filling all of the area with retail.

Mike Gotto at Stonybrook Consultants, working with Gendron, estimated that the various parcels could fit 2.1 million square feet of commercial/warehouse space, 540,000 square feet of retail space, 231,000 square feet of office space, 13,000 square feet of restaurant space, 3,000 square feet in gas station space and 200 hotel rooms. 

If that existed today, the city tax assessor estimated that development would be valued at $150 million, which at today’s tax rate, would generate $4.1 million in new taxes, according to Jeffers’ note to the council.

“Part of the reason for the large district, Dave has been actively working even during the downturn to see new development out there,” Jeffers said. “He knows that the faster he develops stuff, the faster he’s made whole, so he’s got a lot of incentive to develop this area. He’s incurring significant initial site costs that will take significant new investment to make him whole over time.”

The new development wouldn’t be possible without the current Exit 80 ramp work by the Maine Turnpike Authority, Jeffers said. Without the new layout, the area couldn’t have handled the amount of new traffic major retail would bring in.

kskelton@sunjournal.com

Presentation of Potential Joint Development and TIF Agreements – Exit 80