Brunswick leaders in tiff over TIF legislation; 'a trust problem' with state, MRRA

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BRUNSWICK — Town leaders are livid about a failed legislative maneuver they say was designed to funnel millions of dollars to the Midcoast Regional Redevelopment Authority at the town’s expense.

The episode could do further damage to the town’s already fragile relationship with MRRA.

“They’re way out of line,” Town Council Chairwoman Joanne King said. “Everyone is horrified that this is happening.”

The maneuver in question took place March 30, when the state budget was the subject of a workshop held by the Appropriations and Financial Affairs Committee at the Statehouse in Augusta.

During the workshop, George Gervais, commissioner of the state Department of Economic and Community Development, introduced an amendment that would have had the town give up 80 cents of every dollar generated by a Tax Increment Financing district at the former Brunswick Naval Air Station.

State officials say that they are just trying to make sure that the former Navy base is redeveloped in a way that will allow Brunswick, and its neighboring communities, to thrive.

“With that base closed, there’s more than one community that’s affected by that, and there’s more than one community that should participate in the recovery efforts,” Gervais said Monday.

Brunswick Town Manager Gary Brown said he and other town officials were unaware that the measure had even been drafted. Without his intervention, Brown said, it would have likely been passed by the Appropriations Committee without a word of dissent.

He told the Town Council on Monday that, at about 2:55 p.m. on March 30, his office suddenly came to life with text messages, phone calls, and emails about the amendment.

Brown said he hopped in his car and drove to the ongoing committee meeting. After discussions with committee member Sen. Roger Katz, R-Augusta, and lobbyists with whom Brunswick had a previous relationship, the language was pulled.

“They pulled it out because they wanted it to have public notice in the papers and be fully vetted,” Gervais said. “I agreed with this. I’m 100 percent happy it’s going this route.”

Shady deal?

Town leaders accused Gervais of skulduggery.

“It’s really significant because our town almost had something pulled over on it,” King said. “… Apparently transparency doesn’t exist in Augusta. If you passed a bill here in Brunswick and didn’t tell the people who were affected by it, it wouldn’t go over very well.”

King and Councilor Ben Tucker said they see links between the legislation and MRRA, the body that would administer the redevelopment share of the TIF money, had the deal gone through.

Gervais sits on the MRRA board of trustees.

Two days before introducing the TIF legislation, Gervais, in his capacity as DECD commissioner, received paperwork from Brunswick about the TIF district.

Gervais said that he understands this creates a bad perception, when seen from afar.

“It looked like it was in a back door to get to that point,” he said. “… I’m sure they’re jumping to conclusions.”

Gervais maintained that the legislation is completely independent of the negotiations between Brunswick and the MRRA.

“This language is not specific to Brunswick,” he said. “This has nothing to do with (negotiations between MRRA and Brunswick). This statute has nothing to do with any one redevelopment across the state.”

Gervais said that there are other affected areas, most notably the Loring Air Force Base, and military sites in Cutler and Sanford.

“It simply seeks to ensure that the former Brunswick Naval Air Station base gets proper funding for redevelopment,” Gervais said. “… For any military base redevelopment, if there’s going to be a TIF district, you plan to use the funds to redevelop the area.”

He said that he came up with the idea and developed the amendment independently of MRRA or state legislators.

“I ran my thoughts by the (LePage) administration and I pulled in the attorney general’s office to make sure the language made sense,” he said.

The specific language came from similar legislation in other states, Gervais said.

Steve Levesque, executive director of MRRA, would offer only a brief statement on Wednesday.

“We had no knowledge of it,” he said, “and I have no further comment.”

Future impact

The bill is dead for now, but there’s no guarantee it won’t come before the Legislature again.

In fact, Gervais said, he has no qualms about bringing it back in some form.

“I’m just waiting to see how those negotiations go,” he said. “We’ll look at this next session, and (see if) it’s still needed.”

King and other councilors said that the legislation is now being used as a heavy-handed threat that will color the ongoing negotiations between Brunswick and MRRA about a revenue split from the TIF district.

“This whole bill really would have knocked any negotiating power out of our hands,” she said. “We couldn’t have talked about it.”

According to Brown, Levesque told him that MRRA would be opposed to the bill as written. But an April 1 email from Levesque to Brown links the negotiations to the bill’s prospects.

“Our general position … is that, so long as MRRA receives an equitable allocation of future tax revenues … legislation should not be necessary,” Levesque wrote.

Charged climate

The disagreement comes against a larger backdrop that has seen MRRA and Brunswick wrestling over how to deal with the economic void left by the Navy base, now known as Brunswick Landing.

Gervais said the issue is not how the money will be spent, but simply who spends it.

“I understood why they would be upset with it,” he said. “It’s a loss of local control.”

King said local control is important.

“It’s taxpayer money,” she said. “It’s our TIF, and we want to make sure of how to best use it.”

King said that the relationship is not likely to get better, as long as Brunswick is being kept away from the table.

“This becomes a trust problem,” she said. “There needs to be a good working relationship between the town, MRRA and the state, and this could be very threatening to that process.”

Matt Hongoltz-Hetling can be reached at 781-3661 ext. 123 or Follow him on Twitter: @hh_matt.

Sidebar Elements

What is a TIF?

Tax Increment Financing is a tool municipalities use to capture the tax revenues of an undeveloped or blighted area. As property taxes increase within a developed TIF district, the money can be used for a variety of specific functions, most of which have to do with the redevelopment of that district.

Towns often borrow money to develop an area, and then use the increased tax revenues generated by that development to pay off the initial expense.

How much money is at stake?

The dollars generated by the proposed TIF at the former Brunswick Naval Air Station, now called Brunswick Landing, will likely increase to more than a million dollars each year over the life of the TIF, for as many as 30 years.

Even a conservative estimate puts the total amount of money at stake at more than $20 million.

What would the legislation have done?

According to a legislative summary of the amendment language proposed by George Gervais, commissioner of the Department of Economic and Community Development:

“This Part requires that 80 percent of the captured assessed value derived from the development of a former military base be applied to the authorized project costs. It also requires that when the Legislature creates a redevelopment authority to manage the redevelopment of a former military base that legislative body of the municipality or plantation enter into a contractual agreement with the authority to administer related activities.”

— Matt Hongoltz-Hetling