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Dispute simmers over sale of Brunswick Naval Air Station housing

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Dispute simmers over sale of Brunswick Naval Air Station housing

BRUNSWICK — A representative of the owner of the military housing at Brunswick Naval Air Station said this week that concerns about the pending private sale and disposition of the 702 units are overstated.

Mark Lavin of Northeast Housing, a partnership between Balfour Beatty Communities and the U.S. Navy, said Tuesday that the potential sale to Auburn developer George Schott will not endanger the objectives of the base reuse plan or flood the real estate market with vacant housing.

"This is all about control," Lavin said. "It's always about control. No matter what Mr. Schott wants to do with the housing, he still has to operate within the (reuse plan guidelines)."

Lavin was responding to a challenge to the sale by the agency overseeing the redevelopment of the base. On March 25, the Midcoast Regional Redevelopment Authority sent a letter to the state's congressional delegation requesting a formal inquiry.

In the letter, Steve Levesque, MRRA executive director, argued that Schott is "insensitive" to a housing disposition strategy that the agency believes is necessary to reduce the impact of the military housing on the local real estate market.

Last year, Schott outbid the MRRA for ownership of the housing. According to Levesque, Schott's offer was $16 million versus the authority's $10 million. But, in his letter to the delegation, Levesque said the gap has narrowed between the two bidders as Schott's negotiations with Northeast Housing have dragged on for about a year.

This week, Levesque reiterated those claims, adding that the pending sale raises questions about whether the Navy and Balfour Beatty respect the goals of the community they're leaving behind.

"This is not anything against Mr. Schott," Levesque said. "We just think we're in the best position to deal with the housing because our goals aren't to generate the maximum profit. We're coming at this from a different perspective (than Schott)."

Asked how he knew that Schott's bid price had dropped, Levesque said he was told so by Schott's representative, Mathew Eddy, a consultant for Eaton Peabody. He said his information was also verified by Northeast Housing.

Lavin disputed Levesque's claim.

"I don't know how (Levesque can say the gap has narrowed) with any certainty," Lavin said. "He does not know the details, unless there's been a violation of the confidentiality agreement with (Schott)."

"(MRRA) is in the best position to make sure the properties are dealt with responsibly," Lavin added. "(Levesque) is absolutely right about that. However, just because they don't own (the housing) doesn't mean (Schott is) free to do whatever he wants."

Lavin also disputed Levesque's claim that the time it has taken to close the sale has come at a cost to the community or the MRRA's redevelopment goals.

"We're all disappointed in how long it's taken," Lavin said. "But there's been a lot of issues to deal with and a lot of competing interests in the Navy."

"Even if (MRRA) was the buyer, it would've taken this long," he added.

It's still unclear if the congressional delegation will take up the MRRA's request for an examination of the Schott sale. Representatives of U.S. Sen. Olympia Snowe, R-Maine, U.S. Sen. Susan Collins, R-Maine, and U.S. Rep. Chellie Pingree, D-Maine, did not respond to requests for comment.

Meanwhile, the town appears to be leaning toward the MRRA's side of the simmering dispute, which could hurt Schott's request for a property tax rebate program to help him finance redevelopment of the housing.

The rebate, known as a credit enhancement, would be included in a new Tax Increment Financing district. A credit enhancement essentially returns most or all of a property owners' property taxes for a specific term.

The Town Council recently approved a credit enhancement program for the developer of Maine Street Station, to help finance a 54-room inn.

MRRA is expected to request a TIF and credit enhancement for the base's entire 3,300 acres, including the housing.

Schott is requesting a tax rebate for area covering the 702 housing units. He is also seeking ownership of the land beneath housing – and so is the MRRA.

BNAS is the first base closure where the housing units and the land beneath them are owned by separate entities.

Town Manager Gary Brown said Tuesday that the town was alarmed by Schott's published comments that he'll be forced to convert all of the housing units into rentals if he doesn't gain ownership of the land or secure a tax rebate.

He added that the Town Council might be more inclined to support the redevelopment authority's request for a base-wide TIF over Schott's because "the MRRA is invested in this community."

"They're not as motivated to make a profit and cut and run," Brown added.

Although Schott has repeatedly expressed a willingness to honor the goals of the MRRA's housing disposition strategy – which includes demolition of some units, reinvesting in adjacent infrastructure and making a percentage available as affordable housing – Brown said Schott "may or may not be compelled" to do so.

Schott is expected to make his case for the TIF at the Town Council's April 26 meeting.

Levesque, meanwhile, said that the MRRA could also sell off some of the housing to a private developer if it gained ownership. However, he said, the 2005 Base Realignment and Closure law prevents the agency from making an "undue profit."

"Any money that's made has to be put back into the redevelopment project," Levesque said, adding that the funds could be used for the agency's marketing efforts, property acquisition or operations.

"And we need that," he added.

Levesque stressed that the community's interest compels the MRRA to request an inquiry into the Schott sale.

"We're doing this because it's our responsibility," he said.

Steve Mistler can be reached at 373-9060 ext. 123 or smistler@theforecaster.net