Brunswick considers TIFs for MRRA, Schott; questions Navy housing deal

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BRUNSWICK — Town councilors and members of the public got their first look on Monday at two tax increment financing proposals for Brunswick Landing and the former U.S. Navy housing.

Details are still being worked out, but the plans would create two TIF districts at the former Brunswick Naval Air Station, one in the former military housing at Cook’s Corner and another in the McKeen Street neighborhood.

Councilors also expressed concern about some of the details of a proposed purchase-and-sale agreement between the Midcoast Regional Redevelopment Authority, which owns the land underneath the former Navy houses, and Affordable Midcoast Housing, which purchased the buildings last fall.

How the TIFs would work

At Brunswick Landing, millions of dollars in property and buildings that were previously owned by the Navy and not subject to taxation are entering the town’s tax rolls in 2012. While that means more property tax revenue for Brunswick, it also means higher county taxes and less money from the state for education and general purpose revenue sharing.

Steve Levesque, MRRA executive director, estimated that without a TIF, the town would only keep 30 percent to 40 percent of all new tax revenue generated by the property on the former Navy base.

But if the town creates TIF districts, that would keep the value of the former Navy property and buildings from factoring into the town’s valuation, and avoid the increased county taxes and reduced state revenue.

The TIF plan proposes splitting any new property taxes generated at Brunswick Landing between the town and MRRA.

In the airport area, 100 percent of taxes from aeronautical uses that are subject to taxation would go to MRRA for the first 20 years of the TIF’s 30-year duration. Non-aeronautical uses, like Maine Tool & Machine, would not have any taxes returned to MRRA.

The second TIF district would be for the remainder of the land on the former Navy base that MRRA intends to redevelop. A memo from Town Manager Gary Brown to the Town Council outlined options for tax revenue sharing, including:

• Splitting the revenue equally between MRRA and the town.

• Capping the total amount returned to MRRA over the 30-year life of the TIF.

• Gradually decreasing the percentage of the revenue that goes to MRRA, until 100 percent is returned to Brunswick.

• Or linking the revenue sharing to job creation.

Levesque said MRRA intends to use its portion of the tax revenue for infrastructure improvements and maintenance.

The TIF districts on the former Navy housing are between the town and  Affordable Midcoast Housing, developer George Schott’s company, which owns all 702 homes, although not the land beneath them. MRRA and AMH are hoping to sign an agreement to transfer the land in the next few weeks.

Thirty-three percent of the McKeen Street and Cook’s Corner neighborhoods would fall into an affordable housing TIF district, which would return all tax revenues to the town for education and recreation. Brown said the town could also send a portion of the revenue back to AMH to make aesthetic improvements to the housing stock. As part of the TIF, Brunswick would take over some of the roads that are currently maintained by AMH.

Doubts about demolition

The council also previewed the details of the agreement between MRRA and AMH.

The proposal differs from MRRA’s 2009 housing disposition and redevelopment plan in two key ways: it designates a higher percentage of the housing in Brunswick as “affordable,” and it demolishes fewer housing units.

That plan recommended that 239 units, including all of Topsham Annex and Brunswick’s Midway Terrace and 20 percent of McKeen Street, be torn down to stabilize the real estate market.

Schott has already demolished 56 units at Topsham Annex and does not intend to tear down more because the developer of The Highlands, John Wasileski, has expressed interest in the remaining 73 units, according to Scott Howard, a consultant for AMH.

Howard explained in an interview that although there will be fewer demolitions, more than 100 units in Brunswick, including all of Midway Terrace, are effectively off the market because they have been reserved for Supervisor of Shipbuilding workers at Bath Iron Works.

Given both factors, Howard said it no longer made sense to demolish 239 housing units that are generating tax revenue for the towns and AMH.

But Councilor Benet Pols questioned the decision to let so many housing units stand, and said he is concerned about the impact on local landlords and residents trying to sell their homes.

Councilor Suzan Wilson agreed.

“I’m not sure the argument is there for demolishing fewer properties than was in the original plan,” she said.

Chairman Joanne King told Howard that the council would not endorse the plan until after discussing it in detail at the next council meeting.

Levesque said Tuesday that it is important for him that both Topsham and Brunswick’s elected officials are on board with the housing disposition plan before an agreement is signed.

“We don’t want to get out in front of the town on this issue,” he said. “MRRA is very sensitive to the fact that these neighborhoods are in Brunswick and the town is ultimately comfortable with what’s going to happen with these housing units.”

Emily Guerin can be reached at 781-3661 ext.123 or Follow her on Twitter: @guerinemily.