SCARBOROUGH — Town councilors on Wednesday approved tax breaks that over three decades will help turn Scarborough Downs into a village center.

“(Approval means) Scarborough is open for business,” developer Rocco Risbara III optimistically said before councilors voted.

Crossroads Holdings, the partnership that includes developers Rocco, William and Marc Risbara, of Risbara Bros. Construction Co., and Peter and Richard Michaud, purchased the property in January for $6.7 million.

They plan to turn the racetrack property into a mixed-use downtown under a 30-year tax-increment financing package worth up to $81 million.

Three orders required to seal the deal, which Town Manager Tom Hall described as “separate” but “intertwined,” divided the councilors.

The votes were 5-2 on the first two orders, for a Downtown Redevelopment Plan and a 955-acre tax increment financing district. The Downs property includes 424 acres of the TIF district, with the rest comprised of the town’s municipal campus and area around Oak Hill.

Chairman Peter Hayes and Councilor Don Hamill opposed both orders.

Hamill said the “enormity” of the district concerned him and posed potential unforeseen risks to the town and taxpayers.

“(There’s a) risk with this relationship relying too much on a private entity for deciding for the town what the future might be,” Hamill said.

Vice Chairwoman Katy Foley, who supported all three aspects of the deal, said, “without risk, there’s never a reward.”

Councilor Paul Johnson joined Hayes and Hamill in the 4-3 vote on a credit enhancement agreement where 40 percent of tax revenue generated incrementally from the property could be returned to the developers for additional investments.

The CEA authorizes the town to reimburse the developers for costs related to the installation of municipal infrastructure – public roads, water, sewer, electricity and gas.

Johnson said one of his concerns was that the agreement didn’t require any performance checks with “teeth” by the town within the first 10 years of development.

Councilor Jean-Marie Caterina, however, said the agreement allows the town to be a partner in the project, rather than an overseer.

“The Downs is going to be developed whether we’re involved or not,” Caterina said. “I want a say in what goes on over there and that is what we get with the CEA.”

Under the agreement, if performance standards are not met, only 25 percent of taxes would be reimbursed to the project developers in years 11 to 20.

Under the proposed agreement, the non-bonus cap to be returned to Crossroads if the development meets town standards of scale and mixed use is $55 million over 20 years, according to the town.

If the project outperforms standards, perhaps with faster development, and the cap of $55 million is reached, the project will be eligible for a 10 percent bonus for the next 10 years, capped at $2 million per year, for a potential total of $81 million.

The development will only receive payments on new revenue it generates. Developers will foot the initial $265 million cost of road and sewer infrastructure.

Build-out plans include $396 million in housing, $143 million in commercial space and $75 million in industrial space. The project is expected to create eight miles of new roads, anywhere from 2,500 to 3,100 jobs, and about 1.2 million and 800,000 square feet of commercial and industrial space, respectively.

Most speakers during public comment Wednesday night encouraged the council to approve all three aspects of the deal, with only a few questioning it or suggesting changes.

Some of the most outspoken critics of the TIF and CEA over the past several months have been members of a citizens’ group called Scarborough Maine Advocates for Reasonable Taxes, who called Wednesday night’s vote the “vote of the decade.”

SMART member Steve Hanly said in an email that concerns “intensified within the last (few) weeks when it became clear that the agreement as written allows the developer to collect tens of millions of dollars from the town while constructing nothing but housing for the first 10 years of the agreement.”

But Rocco Risbara on Wednesday disputed the suggestion that the residential part of the project would be a drain.

“Because of the way our residential work is done, with a few single-family, some condominiums, some multi-family apartments, and how compact it is, there’s not a lot of streets … or public infrastructure to maintain, nor will there be many children moving into these projects, so it won’t be a high cost for education,” he said.

The Crossroads project is expected to add nearly 2,000 residences (about 23 percent) to the town’s 8,500 existing housing units, more than 3,600 residents (18 percent) to the town’s population of 20,000 and nearly 350 children (12 percent) to the more than 2,900 school-age children now living in Scarborough, according to projections by the town and developers.

Residential development, which is Phase 1 of the project, is already underway with infrastructure construction and is expected to be completed next year.

“The proof will be in the pudding … as people occupy that, we’ll be able to prove that theory,” Risbara added, noting that the money for developers and the town comes from the Downs’ commercial growth.

Risbara said Crossroads will go to the Planning Board Dec. 17 with a master plan for light industrial development. He said his team has heard from a number of commercial entities interested in occupying space.

“It’s full speed ahead,” Risbara said. “… I’m disappointed (the vote) wasn’t 7-0, but I’m pleased that at least four councilors saw value in our idea and I’m excited to move forward.”

Scarborough Downs has struggled for years as a seasonal harness racing venue. The property off Payne Road near Exit 42 of the Maine Turnpike was under contract to be sold 17 previous times, according to the Crossroads developers.

Jocelyn Van Saun can be reached at 781-3661, ext. 183 or [email protected] . Follow her on Twitter @JocelynVanSaun.

Developer Rocco Risbara makes a final pitch to the Scarborough Town Council on Nov. 28 for a credit enhancement agreement to help redevelop Scarborough Downs.

An architect’s rendering depicts the mixed-use village center envisioned by developers of the Scarborough Downs property.

Town Hall filled up Wednesday night for what some called the most important Town Council vote of the decade in Scarborough. Three separate votes approved a tax increment financing package that could produce benefits of up to $81 million for the redevelopment of Scarborough Downs.

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