Oil Pipeline Company Seeks ‘Significant Amount’ of Tax Abatement from South Portland

Mar 6, 2017

The company that delivers crude oil from Maine to Canada, Portland Pipe Line Corp., is seeking tax abatement from the city of South Portland, claiming the city’s Clear Skies Ordinance has reduced the value of the pipeline.

Portland Pipe Line has properties in South Portland valued at nearly $44 million. But in its application for tax abatement, the company says they’re currently overvalued by about $18 million. So how does that translate into actual tax dollars the pipeline could save if its application is approved?

“If this abatement were granted, they’d save approximately $330,000,” says South Portland Assessor Jim Thomas.

Thomas says that’s no small change for the city.

“Last year, the city raised almost $64 million in property tax. It’s a significant amount,” he says.

An attorney for Portland Pipe Line said in a written statement that the company is “looking forward to reaching a mutually agreeable resolution of its property tax matters with the city of South Portland,” and declined further comment.

But in its application, the company points to the city’s Clear Skies Ordinance as the reason for the reduced value of its property. That ordinance effectively blocked efforts by the company to reverse the flow of its 236-mile pipeline that pumps oil to Canada, and instead bring Canadian crude oil into Maine. The company sought the reversal to align with market demand.

In its application, Portland Pipe Line says it now suffers from “severe economic obsolescence.” Thomas says he’ll make a decision on the tax abatement request in April.

“Any appeal to the assessor, we will do our own due diligence to verify the validity of our assessment and make a determination on the appeal, based on our findings,” he says.

If Portland Pipe Line disagrees with the decision, Thomas says, the company can file an appeal to the city’s Board of Assessment Review. If either party disagrees with the Board’s decision, the matter can then go to the courts or to a state board.

Meanwhile, Portland Pipe Line has a pending lawsuit against the city of South Portland over the Clear Skies Ordinance. The city has allocated $1.5 million, including $100,000 in donations, to defend the ordinance, and have spent about $1 million so far.