An architect’s rendering of the proposed Home for Good project on Mousam Street. Courtesy: Sanford Regional Economic Growth Council
By Lee Burnett
Following a public hearing at its Tuesday night meeting, the City Council awarded a property tax break to the developers of a new kind of home for chronically homeless people. It’s the first time the city has awarded a full lifting of property taxes for an economic development project.
Under the credit enhancement agreement approved by unanimous vote on Tuesday, the Sanford Housing Authority would be able to retain the $38,000-plus per year in taxes expected to be generated by construction of the three-story Home for Good project on Mousam Street.
Keith McBride, executive director of the Growth Council, said the tax break is absolutely essential for the project to go forward because without it, the housing authority would not be eligible for the final piece of financing – a $418,000 loan from Maine Housing.
“I don’t know that I will ever come to you ever again for as long as I’m here and tell you that a 100 percent credit enhancement agreement is a good idea, but in this case, it works,” he said Wednesday.
The 30-unit project is said to be the ultimate answer to stabilizing the lives of people whose daily struggles have become an increasingly disruptive presence in city parks and on the trails.
In her portion of the presentation, Executive Director of the Sanford Housing Authority, Diane Small, explained that eligible residents would receive permanent housing with round-the-clock staffing. A trained service provider would be present on the property at all times and crisis response would also be available. Residents would need to follow rules similar to the requirements of tenants in any residential property. They would be required to sign a lease and pay one-third of their income toward rent. Residents would receive help in developing independent living skills and would be connected to medical, behavioral health and recovery services.
McBride repeatedly called the project “more than a building” because it advances a 19-point strategy for addressing ending homelessness developed two years ago. “It’s a great way for the city to step up and say we are participating in implementation of this plan for relatively small money,” he said.
McBride also extolled the project for reducing an image barrier to economic development in Sanford. McBride said he has a “great elevator pitch” for answering developers’ questions about the unhoused community in Sanford, but having tangible proof of the city’s efforts would strengthen his pitch.
Mayor Becky Brink commended the evolution of the project from a “housing first” initiative, a similar housing model that doesn’t include on-site services and supervision. And she applauded the years of efforts that are finally bearing fruit.
“I am so impressed that we’re finally to this point. I think we’ve been talking about this for years,” said Brink. “The new name is so much better. Because it speaks to your heart. Can you just imagine being the person on the street who can claim this is my home?” she said. “That is just amazing.”
City Councilor Pete Tranchemontagne sought to put in perspective the lost taxes by inviting City Manager Steve Buck to talk about the far greater expenditures avoided in the future, such as the costs of general assistance, crisis services, emergency response and encampment cleanup. Buck said he couldn’t put a number “on the dotted line,” but said just the avoided cost of encampment cleanup would be “phenomenal.”
Councilor Ayn Hanselmann sought to address social media commentary about the project by inviting Small to talk about a recent meeting with neighbors. She said neighbors “weren’t fearful anymore” after hearing the housing project would be staffed round the clock. And she said they were “excited about a new building” in their neighborhood.
Citizen John Henkelmann said he supports the project, noting “normally I would push back on a credit enhancement agreement, but in this case, it makes 100 percent sense and one hundred percent is the right amount.”
Normally, the construction of a multi-million-dollar project would increase the city’s overall property value by a corresponding amount, resulting in lower state aid and higher county tax. But the state’s Tax Increment Financing law allows municipalities that meet the right criteria to “shelter” the higher value from corresponding downside impacts to state aid and county taxes. In effect, the city gets both the tax revenue and prevention of downside revenue impacts. But, the law restricts how the new property tax revenue from a “TIFFed” property is spent. It can go toward infrastructure improvements in the vicinity of the property and in some cases, it can be returned directly to the developer’s bottom line through a credit enhancement agreement.
McBride defended the credit enhancement agreement on multiple grounds, saying without it there would be no project. “They are short on their project budget. They do not have the funds to build this,” he said.
“There is something in this for us,” he added. Namely, that the property would generate property tax money, which it did not when the property was owned by York County Shelter Programs. That tax money would eventually come to the city when the credit enhancement expires in 20 years. And in the meantime, the shelter effect means the city wouldn’t suffer downside revenue impacts to taxes. The accumulated benefit of the tax shift over the life of the TIF would be $856,667, he said.
“It’s still very advantageous for us to take advantage of tax increment financing,” McBride said.
Coincidentally, the council had heard a fresh story about the impact of the unhoused population on Sanford during the earlier public comment time. It came from a resident who spoke of her frustration living at Sanford Mill apartments on Washington Street, near a vacant mill used by squatters and drug dealers. Bobette Gordy said residents are fearful of walking beyond the building parking lot.
“We can’t walk down past the river … because we have the fentanyl people all bent over and the scary arsonist lady,” Gordy said. “It’s gotten to the point of ridiculous. They pull their pants down, they urinate in front of us, they defecate in front of us. If we can’t walk around in a town of 20,000 people without having to worry every minute, then there’s a problem.”
She encouraged the city to pursue federal grants and said she’s been researching some. Mayor Brink assured her that the concerns are being heard and encouraged her to share information she’s gathered with Parks and Recreation Director Brady Lloyd.
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