PRESQUE ISLE - Officials with Maine Mutual Group are preparing for a groundbreaking ceremony after a recent city council vote to establish a tax increment financing district for the local insurance company.

MMG officials announced this week that they will host a groundbreaking for a $5.5 million expansion and renovation project at the company's headquarters on Maysville Street. The project is expected to create 35 to 50 new jobs over 10 years.

"We're excited about the involvement of the city of Presque Isle in this project and even more excited about the opportunity it provides for our employees," Larry Shaw, president and CEO of MMG, said Wednesday.

The project is moving forward after the Presque Isle City Council held a public hearing on Monday night to discuss the creation of a TIF district for the company in the area of Maysville and Carmichael streets.

The district would provide MMG with funding for the project while allowing the city to promote economic development without affecting its current tax base. City officials said both goals can be accomplished by using an estimated $1.7 million in captured assessed value or the new property tax value created by the expansion project. Right now, the property has an assessed value of about $2.7 million.

The city plans to create a 10-year credit enhancement agreement, returning 75 percent of the captured taxes to MMG each year. The company would use the money for costs associated with the capital investment. The remaining 25 percent in new taxes would be returned to the city's general fund each year. The agreement must be approved at the state level before the property can become an official TIF district.

"If I were to use one word to describe this tax increment financing district and this project, it would be the word partnership," Larry Clark, Industrial Council executive director, said on Monday night. "This project presents the city with the opportunity to partner with a local business in a major expansion."

Shaw told councilors on Monday night that MMG has been in its existing building since 1988. The 27,000-square-foot, two-story facility originally housed about 50 employees, but now operates with double that number. While the company considers the growth issue a "good problem" to have, Shaw said that officials plan to build a 20,000-square-foot addition and renovate its existing space. The project would allow the company to house up to 200 people in the building. Shaw said that MMG expects to have 125 employees on board at the facility by the end of the year, leaving space for 75 additional staffers in the coming years.

Councilors approved the creation of the TIF district, approved the TIF development program and authorized the city manager and staff to implement the program on the city's behalf.

"We're personally very excited [about this project] as a company," Shaw said. "We really do see this as an exciting evolution for Aroostook County and what it means for the future of not only the residents of Presque Isle but the people throughout this county."