Martin’s Point Health Care - Gorham Medical Office Building
Proposal for Tax Increment Financing District
Introduction
The Town of Gorham Maine is considering the creation of a Tax Increment Financing (TIF) District
related to proposed new development by Martin’s Point Health Care. Martin’s Point is proposing
development of a new facility to extend health care services in southern Maine. The TIF District would
be used to support the financing of a development program for both Martin’s Point (The Developer) and
The Town of Gorham (The Town).
Overview of Martin’s Point
Martin’s Point is a health care organization leading the way to provide better care at lower costs in the
communities they serve. As a not-for-profit organization, their primary mission is helping patients and
health plan members live healthier lives, with the promise of treating each one with warmth, care, and
concern. Their administrative offices are located in Portland, Maine, though their health plans and
Health Care Centers have a much broader reach in Maine and beyond.
Contact for this project:
Dick Daigle, Vice President of Support Services
Martin's Point Health Care
331 Veranda Street
P.O. Box 9746
Portland, ME, 04014
Tel: 207.791.3712
www.MartinsPoint.org
Parcel Information
The parcel to be developed by Martin’s Point is located at the Intersection of Rte 25 and Rte 237 in
Gorham and is known as the Johnson Site. The site purchased by Martin’s Point was 24.24 acres and
included the Beal’s Ice Cream property. Through the purchase and sales agreement, Martin’s Point
deeded 5 acres to Beal’s for future use. Martin’s Point retained 19.24 acres which is what will be used
for the new development. This acreage retained by Martin’s Point does not include any existing
buildings or structures. It is part of Map 32 Lot 18 according to Town Assessment Records. The
proposed TIF District will incorporate all of the acreage retained by Martin’s Point. The parcel is located
within the Roadside Commercial (RC) Zone and the proposed development is allowable under current
zoning.
1
Town of Gorham Martin’s Point Health Care TIF Proposal
Original Assessed Value (OAV)
The current assessed value of Map 32 Lot 18 based on the Town of Gorham 2013 Real Estate Tax Bill,
Fiscal Year: July 1, 2012 to June 30, 2013 is
Land Value:
$292,500.00
Building Value: $42,000.00
Total Value:
$334,500.00
According to a recent survey, after deeding the five acres to Beal’s Ice Cream, the remaining lot of 19.24
acres which contains no structures or buildings is estimated to be $276,300 as of April 1, 2013. For
purposes of the proposed TIF District this is the estimated Original Assessed Value.
Future Valuation & Captured Assessed Value
The development being proposed by Martin’s Point within the proposed TIF District is estimated to cost
$4,725,295 for land and building cost (excluding personal property). Table 1 presents estimated
development cost estimate by major category.
Table 1: Martin’s Point Health Care Gorham Medical Office Building - Preliminary Cost Estimate
for Real Property (Land & Building)
Land Acquisition
$650,000
Engineering/Architectural
$360,000
Construction *
$3,615,295
Tele/Data Communications
$100,000
Total
$4,725,295
Source: Martin’s Point Health Care
Based on these development costs the estimated assessed valuation of real property (land and
buildings) at full build-out is $4,725,295. It is estimated that 50% of the project will be completed by
March 31, 2014 and 100% complete by March 31, 2015. The TIF is being proposed for a period of 15
years. Table 2 presents the estimated Original Assessed Value, Annual Assessed Value, and Annual
Increment in Valuation (valuation added above OAV) for the proposed fifteen years of the life of the TIF
District.
2
Town of Gorham Martin’s Point Health Care TIF Proposal
Table 2:
Estimated Property Valuation: Town of Gorham Martin's Point TIF
TIF Year
Pre-TIF*
(OAV)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Tax Year April 1
March 31 TIF
Tax Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
Valuation
Annual Increment
(increase
sheltered above
pre-TIF value)
$276,300
$2,362,648
$4,725,295
$4,725,295
$4,725,295
$4,725,295
$4,725,295
$4,725,295
$4,725,295
$4,725,295
$4,725,295
$4,725,295
$4,725,295
$4,725,295
$4,725,295
$4,725,295
$2,086,348
$4,448,995
$4,448,995
$4,448,995
$4,448,995
$4,448,995
$4,448,995
$4,448,995
$4,448,995
$4,448,995
$4,448,995
$4,448,995
$4,448,995
$4,448,995
$4,448,995
Prepared by Camoin Associates, www.camoinassociates.com
Revenue and – Use of TIF Development Funds
Through the creation of a TIF District the Town is proposing to capture 100% of real property tax
revenues associated with the new incremental development for fifteen years. These captured revenues
would be placed into a TIF Development Fund and can only be used for economic development
purposes specified in the TIF Development Program. These funds could not be used for General Fund
purposes or for any purposes not specified in the TIF Development Program during the life of the TIF.
For this Martin’s Point TIF the Town is proposing to provide 50% of real property tax revenues from the
TIF Development Fund back to the developer to offset costs of development and use 50% of real
property tax revenues to support further economic development in the Town.
Table 3 presents the estimates of total real property tax revenues to be captured in the TIF
Development Fund and the amounts of these revenues for to be provided back to the Developer and the
amount to be used by the Town for further economic development. Over the course of the fifteen year
3
Town of Gorham Martin’s Point Health Care TIF Proposal
TIF District it is estimated that a total of $1,120,078 in real property tax revenues will be generated.
One-hundred percent of these revenues are proposed to be captured in the TIF Development Fund.
Fifty percent, or $560,039, are proposed to be provided back to the Developer to offset a portion of
development costs and fifty percent, or $560,039, are proposed to be used by the Town for specified
economic development purposes.
Table 3:
Captured Assessed Value &TIF Revenue Projection Table - Town of Gorham
Martin's Point TIF
TIF Year
Captured
Captured
Total
Revenue to
Captured
Increased
Valuation
Projected
Municipal
Revenue to
Tax Year- Assessed Value @100% of Value Projected New Taxes
Project
Developer
April 1
Real Prop.
Captured
Mill Rate
Captured
Account Project Account
1
2014
$2,086,348
$2,086,348
17.40
$36,302
2
2015
$4,448,995
$4,448,995
17.40
$77,413
3
2016
$4,448,995
$4,448,995
17.40
$77,413
4
2017
$4,448,995
$4,448,995
17.40
$77,413
5
2018
$4,448,995
$4,448,995
17.40
$77,413
6
2019
$4,448,995
$4,448,995
17.40
$77,413
7
2020
$4,448,995
$4,448,995
17.40
$77,413
8
2021
$4,448,995
$4,448,995
17.40
$77,413
9
2022
$4,448,995
$4,448,995
17.40
$77,413
10
2023
$4,448,995
$4,448,995
17.40
$77,413
11
2024
$4,448,995
$4,448,995
17.40
$77,413
12
2025
$4,448,995
$4,448,995
17.40
$77,413
13
2026
$4,448,995
$4,448,995
17.40
$77,413
14
2027
$4,448,995
$4,448,995
17.40
$77,413
15
2028
$4,448,995
$4,448,995
17.40
$77,413
15 Year TIF Total
$1,120,078
Prepared by Camoin Associates, www.camoinassociates.com
$18,151
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$560,039
$18,151
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$38,706
$560,039
The Developer will use its portion of TIF Development Funds to offset costs related to development of
the Gorham site. Table 4 presents the estimated costs of construction for which TIF Development Funds
will be used by the Developer to offset a portion of. The TIF Development Funds are required by
Martin's Point to offset these costs so the project can be financially feasible.
4
Town of Gorham Martin’s Point Health Care TIF Proposal
Table 4: Martin’s Point Health Care Gorham Medical Office Building - Breakdown of Construction
Cost Estimate
General Conditions
Site work
Concrete
Masonry
Metals
Carpentry
Thermal/ Moisture protection
Doors/Windows
Finishes
Specialties
Mechanical / Plumbing
Electrical
Total
$376,709
$721,648
$188,829
$35,950
$92,167
$255,547
$192,296
$130,715
$436,460
$38,068
$652,658
$494,248
$3,615,295
Source: Martin’s Point Health Care
The Town will use its portion of TIF Development Funds to support further economic development by
partially funding the Gorham Economic Development Corporation in its efforts to generate economic
growth (jobs and investment) and to update it Comprehensive Plan.
Table 5: Town Proposed Use of TIF Development Funds
1. To fund the a portion of the operation of the Gorham Economic Development Corporation at
$65,000/year for 15 years
2. To update the Towns Comprehensive Plan that was approved in 1993 for a cost of $40,000.
The plan is out of date and has been flagged as an item by the State in denying economic development
certification.
Source: Town of Gorham
Tax Shift Calculations
The TIF District will result in certain tax shifts which result because the Captured Assessed Value of the
District will be excluded from the State Valuation of the property in the Town for the life of the TIF.
These tax shifts are the result of three formulae related to State Aid to Municipalities and the County
Tax which use local property tax valuation as component for calculation of individual Town shares.
These three formulas are:
 State Aid to Education
 Municipal Share of County Taxes
 Revenue Sharing
The following is the process used to derive each of these tax shifts:
5
Town of Gorham Martin’s Point Health Care TIF Proposal
The tax shifts resulting from the sheltering of valuation from the state school funding formula
are based on the state EPS funding model in which a statewide estimated mill rate of 7.86 mills
in FY 2013-14 is applied to a district's state valuation to determine the amount of local property
taxes to be raised for education. By sheltering valuation through a TIF, the district avoids having
to raise an amount equal to the valuation sheltered times the mills.
State Municipal Revenue Sharing amounts are calculated from spreadsheet provided by Maine
Revenue Services, FY 2014 Projected Municipal Revenue Sharing - Released 6.27.13;
http://www.state.me.us/treasurer
County tax calculations are based on data from the County Finance Department for the FY 2013
County Tax Year. For purposes of this analysis the total county tax assessment is estimated to
increase 2.40% annually throughout the life of the TIF. This is based on the average annual
increase in the past five years preceding the TIF application.
Table 6 presents the estimated annual, fifteen year total, and fifteen year average Tax Shifts resulting
from the Proposed TIF District and resulting Captured Assessed Value. Annually, on average the TIF
would result in an estimated total Tax Shift of $40,383 with $33,731resulting from the General Purpose
Aid to Education Formula, $3,543 from the Revenue Sharing formula, and $3,109 from the County Tax.
Table 6:
Town of Gorham Martin's Point TIF - Tax Shift Impact
TIF Year
Tax YearRev. Sharing County Tax
April 1 Total Tax Shift Education Shift
Shift
Shift
1
2014
2
2015
3
2016
4
2017
5
2018
6
2019
7
2020
8
2021
9
2022
10
2023
11
2024
12
2025
13
2026
14
2027
15
2028
15 Year TIF Total
15 Year TIF Avg.
$19,388
$41,407
$41,474
$41,541
$41,611
$41,682
$41,755
$41,830
$41,906
$41,985
$42,065
$42,147
$42,231
$42,317
$42,405
$605,744
$40,383
$16,399
$34,969
$34,969
$34,969
$34,969
$34,969
$34,969
$34,969
$34,969
$34,969
$34,969
$34,969
$34,969
$34,969
$34,969
$505,966
$33,731
$1,722
$3,673
$3,673
$3,673
$3,673
$3,673
$3,673
$3,673
$3,673
$3,673
$3,673
$3,673
$3,673
$3,673
$3,673
$53,146
$3,543
$1,266
$2,765
$2,831
$2,899
$2,969
$3,040
$3,113
$3,188
$3,264
$3,342
$3,423
$3,505
$3,589
$3,675
$3,763
$46,632
$3,109
Prepared by Camoin Associates, www.camoinassociates.com
6
Town of Gorham Martin’s Point Health Care TIF Proposal
Employment Estimates
The new development will house a medical services center for Martin’s Point. This facility will employ a
considerable level of employees with providing very competitive wages and benefits.
Table 7 presents the estimated employment to occur at the new Martin’s Point facility. At time of
occupancy the new facility is estimated to house 22 full-time employees. Based on projected patient
growth during the life of the TIF it is estimated that full-time employment will grow to 26. All positions
will receive full-benefits provided by Martin’s point including health, dental, life, disability, vision,
employee assistance, earned time, flexible spending accounts, worker’s compensation, 401K, wellness
program, tuition and continuing education support, and holidays.
Town of Gorham Martin's Point TIF - FullTimeEmployment Projections
Staffing
2013/2014* Future growth
Providers (Physicians/NPs)
5
6
Clinical Support (MAs/Nurses)
7
8
Administrative Support
7
9
Management
3
3
Total
22
26
Source: Martin’s Point Health Care
*2013/2014 reflects anticipated headcount at the new site at the time of occupancy, growth projections are
based on anticipated patient growth supported by the new site.
7
Town of Gorham Martin’s Point Health Care TIF Proposal