HALL0WELL — City councilors will mull changes Monday that aim to relax city guidelines for giving tax breaks to developers.

The amended guidelines could nudge the city closer to acceptance of a 20-year, 100 percent tax-increment finance deal for Peter Prescott, the owner of the collapsed Kennebec Ice Arena.

Prescott lobbied the city’s TIF Review Committee in June for the break to build a larger arena he said would cost $4 million. If accepted as proposed, Hallowell would lose out on more than $1.2 million in property tax revenue — more than three times more than its preferred limits.

City guidelines do not bode well for Prescott’s proposal.

Under the guidelines, dated 2002, the preferred maximum is 50 percent of taxes. To get a 60 percent TIF, a developer must agree to create a full-time job for every $40,000 of tax value being sheltered. A 10-year maximum is preferred.

Proposed new guidelines recommend that TIFs exceed 50 percent only if the developer creates the equivalent of one full-time job for every $12,000 of tax-sheltered value.

The guidelines to be considered retain the preferred TIF length, 10 years.

City Manager Michael Starn said in June that councilors were in the process of rewriting the nonbinding guidelines that say the city should not grant any TIFs over 60 percent. He said City Attorney Erik Stumpfel has reviewed and edited the document.

Councilor Phillip Lindley said the amended policy will be ready to present to councilors Monday for a vote.

“I’ll describe what the revisions are and then make a motion to approve,” Lindley said.

Prescott attended the June meeting to run his proposal by the committee and has only filed a draft application with the city. He hasn’t filed his formal application yet, according to Lindley and Starn.

At that meeting, Prescott said his goal is to rebuild the arena, which collapsed in March under a heavy load of snow, by November.

TIFs are used to allow municipalities to forego property taxes generated by new development within designated districts, as long as the sheltered money is used for certain purposes, such as economic development or infrastructure improvements.

Though the municipality loses tax revenue, it also sees a benefit: Money sheltered through a TIF doesn’t count toward a municipality’s overall property tax value during the TIF’s life. Lower taxable value means more state revenue sharing.

Michael Shepherd — 621-5662

mshepherd@mainetoday.com