Portland’s new “Creative Economy TIF District” snags its first proposal September 15
The City of Portland recently established a new “Creative Economy TIF district” along Congress Street’s Arts District, the home to dozens of studios, galleries, sole-proprietorship businesses, and entertainment venues. In the past two decades, these businesses have grown into a major cluster and a driving force in the regional economy. The new TIF (or Tax Increment Financing) district seeks to support this cluster by directing a portion of property tax revenues from new projects in the area towards a new “Creative Portland Corporation,” which would invest in economic development projects focused on fostering and growing the city’s creative economy.
Now, the Creative Economy District has received its first major development proposal: a plan to rehabilitate the old Baxter Library (pictured above - until recently, the building was used as classroom and studio space for the Maine College of Art) as offices for the VIA Group, a thriving creative-economy business with offices in Portland and New York City.
Here’s how the TIF would work: when complete, the project would generate an additional $46,000 in new property tax revenue in the city (the building was previously owned by a nonprofit). Under the proposed TIF arrangement, for the next nine years, about $30,000 of that new revenue would be returned to the developer, to help finance the project and its historic preservation elements, and the remaining $16,000 would be invested in the Creative Portland Corporation. In the tenth year, the TIF would expire and all of the building’s property taxes would go into the City’s general fund.
Presumably, the developers will also be taking advantage of state-level historic preservation tax credits, the passage of which was a major focus of GrowSmart Maine’s work in the Legislature two winters ago.
VIA already employs 64 people in Portland, and the new space would give it room to expand, along with the less tangible benefits of collaborating and interacting with other tenants and businesses in the neighborhood.
Critics of TIF districts sometimes complain that they rob tax revenue from other city obligations, like schools or fire departments. But without the TIF investment, it’s hard to imagine a complex historic rehabilitation project like this one happening - the only alternative is to let a beautiful historic building sit empty, which wouldn’t benefit anyone. With the TIF arrangement, City Hall will have to wait ten years to receive the new property tax revenue - but in the meantime, the rest of the city will receive new creative vitality on Congress Street, a beautifully renovated building, new commerce, and new creative economy investments.
This is a public investment that will not only benefit Portland’s economy, but will also enhance its “quality of place” by preserving a historic landmark and by bringing more creative workers downtown. Kudos to the developers for taking on this project, to the VIA Group for supporting it, and to the City of Portland’s highly-creative “Creative Economy TIF” policies for letting it happen.