Starch Factory
$10,011.30 FY2025 actual committed tax
- Tax per known acre
- $947.14
- Town tax share
- 0.55%
- Assessed-value change
- -4.02%
- Acreage coverage
- 6 of 6 assessed interests · 10.57 known acres
Economic Development: Planting Seeds for the Future.
A comprehensive economic development strategy to transform underperforming downtown properties into seeds for economic growth.
The Reality
Economic Development Reality
“What a society spends money on matters. When it spends on investment items that yield productivity and income gains, it makes for a better future than when it spends on consumption items that don’t raise productivity and income.”
Economic development is a priority for many municipalities, however the development and implementation of a successful strategy leave many communities relying on luck, where a proactive plan forward would improve economic conditions for the whole.
Our economic environment is always changing. Population growth, geopolitical competition, wars and the development of new technology are some of the forces that have shaped our past and will continue to shape our future. As these forces change what businesses remain relevant, it is important for communities to adapt in ways that encourage and allow for their members to produce prosperity.
A common experience is one where a community recognizes the need for economic development (i.e. a shift in the economic environment has reduced the quantity and/or quality of Parcel ContributionsThe level of benefits or resources generated by a parcel. These can be direct and financial, or indirect and non-financial.Direct Contributions Measurable financial benefits: real estate tax, personal property tax on business assets, sales tax on goods and services, income tax from employment.Indirect Contributions Non-financial, unmeasurable benefits: public gardens, walking paths, information centers, community gathering spaces.) at the same time when community leaders are under pressure to suppress municipal spending (minimize the shared financial burden related to the redistribution of the budgetary demands on the fewer remaining contribution sources).
Key Insight: In Island Falls, many community members share the opinion that
opportunity exists. The town’s attributes are competitive, having a major river and two
beautiful lakes, all with easy accessibility off the State’s I-95. How to bring this
opportunity to life is less clear. The perspectives provided within this page have been created and
shared in effort to aid the community in the creation of a strategy forward that allows for a
brighter future.
Impact
Why Care?
Economic growth positively impacts the community as a whole!
Home Value Growth
The largest contributor to the wealth creation for most American families stems from equity gained in their home values over time.
Attract Contributors
A growing economy attracts contributing members interested in allocating their energy in efforts to growing their own resources.
Prevent Brain Drain
Poor economic conditions create brain drain, as motivated youth move to locations that offer potential to produce at their expected levels of success.
Economic growth is essential for the overall benefit of all community members, and investment is a required input for producing the desired outcomes.
Credit is the most important part of the economy. Read More>>>
Credit is the most important part of the economy, and probably the least understood. It’s also the most volatile. A clear understanding of how credit impacts the economy is essential for those tasked with building economic development strategies.
Healthy or expanding economies have a strong supply and demand for credit. This is because members of the community, motivated by their own desire to create resources for themselves and their families, use credit as a tool to purchase assets. The most common use of credit for community members is for the purpose of homeownership. Other common uses include credit for the purpose of investment (say, to buy a rental property or a business), using the borrowed capital as a source for funding their own growth through increases in productivity.
The health of an economy is easily identified through an exploration of changes in property values, or the number of growing businesses within a town, state, or country. Areas of economic growth attract prospective community members who are interested in participating in growth of their own. As the demand for property increases, so do the equity positions for town residents and business owners. This equity is a common source of funding future investment opportunities.
In the opposite direction, areas of economic decline encourage further future decline. This is easily identified in downtown Island Falls, with the previous loss of a major employer. There is an Economic WeightA deficit imposed on the economic system which requires the remaining contributors to carry forward the cost of the system with a negative net Parcel Contribution.Example: A factory that has gone bankrupt, leaving the Parcel of Land in a status that contributes negatively to the municipality.The scale measuring the size of the economic weight includes the loss of Parcel Market Value for the property itself and nearby properties which may also experience a decline in value. Any Parcel Opportunity Cost is also included. imposed on the community as the remaining property owners shoulder the weight of the budget, all while facing declining demand for their properties. This challenge is exacerbated by the location of the buildings and business assets of the prior employer, being left behind and so visually demanding with its proximity so close to the entry and exit points of the town.
In an unhealthy or depressed economy, the supply and demand for credit is low. As we see in our community, the decrease in the number of economic transactions has suppressed the need for borrowed capital as profits dried up. This challenge compounds as community members move away to more prosperous opportunities, selling their homes in a market of fewer buyers. With a declining value of comparables used for appraisals comes the reduced supply of credit available to buyers and borrowers. A reduction in credit suppresses the availability of capital needed for home improvement and maintenance projects, which leaves many buildings in a state of decline.
Higher prices attract buyers; lower prices attract sellers.
The health of an economy can be identified through an exploration of changes in property values, or the number of growing businesses within a town, state, or country. Areas of economic growth attract prospective community members who are interested in participating in growth of their own. As the demand for property values increase, so do the equity positions for town residents and business owners. Higher prices attract buyers; lower prices attract sellers.
In the opposite direction, areas of economic decline encourage further future decline. This is easily identified in downtown Island Falls, with the previous loss of a major employer. There is an Economic WeightA deficit imposed on the economic system which requires the remaining contributors to carry forward the cost of the system with a negative net Parcel Contribution.Example: A factory that has gone bankrupt, leaving the Parcel of Land in a status that contributes negatively to the municipality.The scale measuring the size of the economic weight includes the loss of Parcel Market Value for the property itself and nearby properties which may also experience a decline in value. Any Parcel Opportunity Cost is also included. imposed on the community as the remaining property owners shoulder the weight of the budget, all while facing declining demand for their properties. This challenge is exacerbated by the location of the buildings and business assets of the prior employer, being so visually demanding with its proximity so close to the entry and exit points of the town.
Key Insight: The relationship between this anchor property and its impact
or negative externalities on the community is easily seen throughout. The affordability of
all properties within the town is burdened by the lack of investment needed to create new
contributions to make up for the loss of the major employer. As the budget increases, so
does the tax burden on the community. Uninterested in a loss, community members move away.
Motivated by success, our youth do the same. The ones who stay avoid property maintenance
and repair projects; numerous buildings that once housed businesses and residents are now
vacant.
Understanding the System
Financial Parameters & Human Motivations
Pathway 1: Available Capital
The most direct path to producing a project is outright ownership of the required funds. An individual or entity whose available capital equals or exceeds the Total Cost to Produce the Project can proceed without relying on credit. Capital may come from savings, liquidated assets, home equity, or investment holdings.
No collateral required. When capital covers the full cost, the
project moves forward independent of any lender's assessment.
Pathway 2: Credit
When available capital falls short of the Total Cost to Produce the Project, credit can bridge the gap — but only when the required collateral is in place. Lenders extend credit based on the relationship between the project's collateral, expected cash flow and the total cost to produce. Projections or assumptions about the three inputs determine the availability of credit.
Lenders match their collateral requirements to meet their comfort level with risk.
Development within our downtown would require the use of collateral from elsewhere,
or a less competitive larger equity owner's contribution.
The Credit Equation
Lenders adjust the availability of credit to account for uncertainties and the possibility of errors unseen or unknown (otherwise known as risk) when making assumptions about project details. The primary considerations influencing a lender’s willingness to provide credit include assumptions regarding collateral values and expectations for cash flows that will be used for making scheduled payments. When this equation fails, so does the availability of credit. Here is the equation:
Total Available Credit
=
(Project’s Ending Market Value*
what the completed project is worth
−
Required Owner’s Equity)
the owner’s required contribution
−
Total Cost to Produce Project
all costs required to complete
* Project Ending Market Values reflect assumptions about the values of assets used for collateral and the projected cash flow — Cash Is King!
When a gap exists: If the Project’s Ending Market Value minus
Required Owner’s Equity is less than the Total Cost to Produce Project,
the right side of the equation is negative —
meaning no credit is available. The individual or entity must contribute their own
capital to close the gap, reducing what needs to be borrowed until the equation
balances. This contribution comes at a loss.
Why Would Anyone Move Forward at a Loss?
When a gap exists and credit is unavailable, the motivation to proceed cannot be economic profit. Two forces explain when and why a project moves forward in spite of that loss — and both connect directly to the Human Motivations framework:
Life Experience as Return (LEAR)
When the value of bringing a meaningful project into existence outweighs the financial cost, an individual or entity may move forward while accepting the loss. The return is not measured in dollars — it is measured in purpose, legacy, or quality of life.
Key Condition: This person has the available capital to contribute
the gap amount, and consciously accepts the loss — because the experience and
outcome of the project carry a value that transcends financial return. They are not
indifferent to the loss; they simply value the result more.
Philanthropic Contribution
A philanthropic party — a mission-driven organization, a municipality, a foundation, or an aligned community — can absorb the gap on behalf of others. By covering the difference between cost and value, they restore the conditions under which private investment becomes viable.
Island Falls: Redevelopment of our downtown would be a strong
competitor for grant funding, however, waiting for a philanthropic party to resolve
the problem on their own is unrealistic and allows the problem only to compound.
1
Economic Profit or Return on Investment
Given the development, production or investment in a project (an input), expectations of economic profit exist (an output). Opportunities to invest today are aimed at creating future financial resources. This attracts both human (labor) and financial capital (money).
2
Life Experience as Return (LEAR)
The development, production or investment in a project (an input) prioritizes the experience of the outcome (an output) over all expected inputs. A higher value is placed on the accomplishment of the outcome versus the expected cost required to produce the ending result.
3
Philanthropic Motivation
The development, production, or investment in a project (an input), places a higher value on the end result or outcome (an output) over economic profit. Philanthropic individuals or entities are often mission-focused and follow guidelines that promote the benefit of others beyond themselves.
Closing the Gap & Human Motivations
When a project's ending value is less than its cost to produce, standard financing falls short. To move the project forward, the gap must be closed through direct capital contribution — accepting a financial loss. This is where Human Motivations become decisive:
Life Experience as Return (LEAR)
An individual who contributes capital despite a financial loss does so because the value placed on the experience or outcome of the project outweighs the economic cost. The return is not monetary — it is personal, community-oriented, or otherwise non-financial. When someone still moves a project forward under these conditions, it is the LEAR that drives them.
Philanthropic Contribution
Alternatively, a philanthropic party may step in to make up the difference — absorbing the gap between cost and value in service of a mission or the benefit of others. This closes the equation without requiring the primary producer to sustain the full loss.
Downtown Waterfront
Anchor PropertyAnchor PropertyA Parcel of Land with Parcel Attributes that have an outsized impact on the Parcel Market Values of nearby properties or an entire neighborhood or town.In Island Falls that parcel is the former starch factory: 10.57 acres of Grade A waterfront at the entry to town.
An Average Downtown Resident pays 80% more per acre than the Starch Factory lots
Committed-record comparison
How these 10.57 acres perform
Compare the six Starch Factory lots with the other fixed downtown cohort and the rest of Island Falls from FY2018 through FY2025.
To improve our ability to compare and understand contribution values, we use a per acre comparison.
Downtown Residents
$123,573.45 FY2025 actual committed tax
- Tax per known acre
- $1,707.29
- Town tax share
- 6.78%
- Acreage coverage
- 95 lots · 72.38 known acres
Other Downtown
$281,301.15 FY2025 actual committed tax
- Tax per known acre
- $1,651.71
- Town tax share
- 15.43%
- Assessed-value change
- 2.97%
- Acreage coverage
- 216 of 217 assessed interests · 164.27 known acres
Derived from Island Falls FY2018–FY2025 committed real-estate records; the Town of Island Falls remains the system of record.
Economic Development Perspective
Anchor Property
A Parcel of Land with Parcel Attributes that have an outsized
impact on the Parcel Market Values of nearby properties or an entire neighborhood or town.
Negative Externalities
Costs that are borne by a third party as a result of an economic
transaction. A vacant or dilapidated property, with such visibility, suppresses economic
activity and reduces demand for nearby properties.
Why Has This Property Remained Underperforming?
As industries and economies have evolved, Island Falls faces a challenge - the need to adapt. The downtown is now saddled with properties that were once well-suited for business in the past, but no longer serve the needs and interests of the community today. The cost to redevelop is greater than the project's ending value, creating a gap that private investment alone cannot close.
Critical Barrier: At this point, even the most motivated entrepreneurs would
be unable and unwilling to carry the weight of negative equity required to redevelop these
properties. 10.57 acres of riverfront property—which should be near the top of contribution
rankings—currently pays only $10K in yearly taxes. It could and should be paying
considerably more.
Analysis Through Human Motivations
✗
Economic Profit / ROI
The gap between cost to develop and ending value eliminates this as a possibility for private investment alone.
✗
Life Experience as Return
The gap is too great to reasonably expect an individual or entity to accept such a loss for the experience.
✗
Philanthropic Motivation
Given the demographics and the lengthy period of vacancy, the capacity for philanthropic investment at this scale is not realistic.
The Path Forward
What is the Solution?
The Answer: Strategic Municipal Investment
It is reasonable to expect that any path forward will require a strategic investment by the town to close the gap between the cost to develop and the project's ending value—an investment that will pay for itself many times over through increased tax revenue, property values, and community prosperity.
Why Redevelop?
Harness Natural Beauty
It's widely accepted among the community that our most valuable natural resource is our beauty. When you add that to our highly accessible location, there's no reason why we can't move our town's status towards the top of the state's economic success list.
Waterfront Lodging Development
By using the waterfront area for lodging (mentioned in the comprehensive plan as a need), we can attract outside dollars, provide more jobs, and improve the health of the town as a whole while fixing the negative equity problem.
Cascading Property Value Growth
Resolving a vacant anchor property increases demand for nearby properties, as the town's identity becomes aligned with an image of success and potential. A vibrant waterfront attracts prospective residents and community members.
State Grant Opportunities
This revitalization is a strong competitor for grant funding as it involves cleaning up waterfront and allows for tourist use—a fundamental objective for the State of Maine (Vacationland). Aligning project goals with state priorities (lodging and food services) makes this highly competitive for grants.
TIF & Town Reserves
Tax Increment Financing and the town's $2,035,066 in unassigned fund balance, 7.8 months of operating expenses in reserve, can be strategically deployed to compound returns while maintaining fiscal responsibility. The competitive nature of this design could garner matching amounts in grant funds.
Premier Tax Contributor
In a comparative analysis of its ability to contribute to the tax commitment, this anchor property has a very high expected return on investment for the community as an improved status would positively impact many properties beyond the downtown zone.
Implementation
The 7-Step Strategy
A systematic approach to economic development
1
Shared Understanding
Step one requires a shared understanding among town leaders that there is opportunity to improve town revenue sources.
Municipal leaders must understand the relationship between current tax revenues from parcels
in poor condition versus expectations if parcels were brought to Optimal Parcel Performance.
2
Process Implementation
Step two requires the implementation of a process for identifying underperforming Parcels of Land.
PIA Industries offers tools built to help municipalities identify underperforming Parcels of
Land. Anchor Properties or Critical Lots are identified and analyzed to determine their
impacts on other nearby parcels.
3
Market Analysis
Step three requires the development of a market analysis specific to the municipality to fully understand the root cause of underperformance.
Examination of the town's past combined with analysis of the current economic environment
identifies challenges and provides clarity around reasonable alternatives, allowing
municipal leaders to weigh expected benefits vs costs.
4
Leadership Alignment
Step four requires the complete alignment of all municipal leaders on the best path forward.
The alignment of municipal leadership, in their understanding of the goal, challenges, and a
path forward creates momentum and directs energy towards producing the outcome.
5
Community Education
Step five requires the dissemination of information and details regarding the current state of economic conditions as it relates to the municipality's main revenue source, its Parcels.
Prioritization of educating the community on the process that was taken to arrive at the
suggested outcome is critical. If the analysis is thorough and the benefits are clearly
understood and widespread, the solution will be widely supported.
6
Public Commitment
Step six requires an official commitment by the town, and showcased by a public vote, to move forward with the economic development strategy.
A public vote clarifies the town's understanding of the economic development plan and its
long-term impact. It also acts as a communication beyond the community, signaling a
commitment to invest in the future wellbeing of the town.
7
See It Through
Step seven: Execute with commitment and persistence.
Sustained effort and dedication to the plan ensures successful implementation and maximizes
the economic development benefits for the entire community.
What We Want to Do
Hear the voices and perspectives of all community members, and support progress towards economic growth to the benefit of the whole.
This perspective and the described strategy, encouraging public investment by the community in an economic development plan that would resolve the negative effects of the anchor property on our community, has been shaped by the influences of many of our community members. Your participation has made this possible!
Residents vs non-residents — FY2025
Each map classification split by residency: a resident lot's FY2025 committed roll carries a homestead exemption. Figures come from the same committed records as the comparison above.
Downtown
$291,312.45 FY2025 committed tax · 15.98% of town · 223 lots on the roll
Residents
- Lots
- 95 (42.60% of class)
- Committed tax
- $123,573.45 (42.42% of class)
- Tax per known acre
- $1,707.29
Non-residents
- Lots
- 128 (57.40% of class)
- Committed tax
- $167,739.00 (57.58% of class)
- Tax per known acre
- $1,539.77
Lakefront
$900,552.90 FY2025 committed tax · 49.39% of town · 337 lots on the roll
Residents
- Lots
- 43 (12.76% of class)
- Committed tax
- $157,404.00 (17.48% of class)
- Tax per known acre
- $2,225.11
Non-residents
- Lots
- 294 (87.24% of class)
- Committed tax
- $743,148.90 (82.52% of class)
- Tax per known acre
- $891.23
Tree Growth
$38,810.85 FY2025 committed tax · 2.13% of town · 50 lots on the roll
Residents
- Lots
- 4 (8.00% of class)
- Committed tax
- $8,794.50 (22.66% of class)
- Tax per known acre
- $46.98
Non-residents
- Lots
- 46 (92.00% of class)
- Committed tax
- $30,016.35 (77.34% of class)
- Tax per known acre
- $6.38
The Lands
$454,921.35 FY2025 committed tax · 24.95% of town · 364 lots on the roll
Residents
- Lots
- 95 (26.10% of class)
- Committed tax
- $142,667.85 (31.36% of class)
- Tax per known acre
- $163.92
Non-residents
- Lots
- 269 (73.90% of class)
- Committed tax
- $312,253.50 (68.64% of class)
- Tax per known acre
- $74.73
Residents-only cohorts: homestead exemption on the FY2025 committed roll is the owner-occupied proxy; classification from the FY2025 town map. Lots without complete positive acreage are excluded from per-acre figures, never counted as zero.
Your Parcel
How does your lot compare?
Public parcel basics are available first. Detailed comparisons require a verified account, an ownership claim, and reviewer approval.