BRUNSWICK — The Town Council on Monday OK’d major tax deals with the developer of the former naval air station that officials hope will boost the local economy.
The council unanimously approved tax increment financing development programs with the Midcoast Regional Redevelopment Authority for Brunswick Landing and Brunswick Executive Airport.
Councilors also reached a preliminary decision to reduce municipal expenditures in face of a budget shortfall created by reduced state revenue sharing for fiscal year 2014.
In addition, the council approved the selection of an architecture firm and construction manager for planned renovations at the McLellan Building on Union Street, where the town will move its Town Hall and Council Chambers next spring.
The council’s approval of the TIF development programs came after it designated separate TIF districts at Brunswick Landing and Brunswick Executive Airport in March.
“I think it’s a very important opportunity for both the town and MRRA to work as partners in a partnership that is long overdue and one that is desperately needed,” said Councilor John Richardson, who led TIF negotiations with Councilor Ben Tucker.
The TIF districts will shelter new property value from state and county assessments, ultimately preventing the town from paying higher county taxes and receiving less state education aid in the future.
The districts were conditionally approved by the Maine Department of Economic and Community Development earlier this year, with final approval pending.
The TIF development program will allow MRRA to apply for up to $12 million in tax rebates over a 30-year period for infrastructure improvements at the former base on a project-by-project basis.
MRRA officials said the TIF revenue will ultimately allow the developer to more easily and quickly market properties to prospective businesses and developers.
The TIF development programs also stipulate that the town must use its share of TIF revenue for special infrastructure improvements, including some related to areas around the former base, and for paying off debt service for future school building projects.
The School Board recently discussed the possibility of holding a bond referendum for construction of a new elementary school in November 2014.
“It’s my belief that one of the selling points of redevelopment is what kind of quality schools a community has,” Richardson said. “And to the extent that we are committed to our quality schools, to the extent that we can boast about the work and effort we put into them, that is a good selling point, a good marketing opportunity for MRRA to boast about when new businesses come to town to look at (MRRA’s) properties.”
The town may also use TIF revenue to provide funding to the Brunswick Downtown Association, and for professional and administrative costs associated with future agreements in the TIF development programs.
Before the council voted on the TIF districts, MRRA Chairman John Peters and other MRRA officials lauded the joint effort by the developer and the town to finally reach an agreement, which had previously been stymied by disagreements between the state and the town over issues about local representation on MRRA’s board and proposed TIF changes.
Peters said he was previously opposed to most TIFs, but he supports MRRA’s two TIF development programs because the developer is not a privately owned business.
“It does not generate a profit. None of the board members are paid,” he said. “There will be no cash distributions to in-state or out-of-state investors as a result of this TIF or any further credit enhancement agreements that occur.”
Peters said the TIF revenue will be used for various infrastructure upgrades, including improvements to nearly 19 miles of roads for nearly $1 million, the former base’s sewer system for nearly $2 million, and the electrical distribution system for nearly $1 million.
In other business, a majority of councilors said they would support reducing department budgets to help plug a $316,000 hole in the municipal budget.
The shortfall in the municipal budget is the result of reduced revenue from the state’s biennial budget, which was passed in June.
Councilors said they would reduce all departmental budgets by a total of nearly $210,000, reduce the town’s paving budget by $87,000, and use $20,000 from state revenue in last year’s budget.
The reduced paving budget would result in deferred maintenance on Columbia Avenue and Belmont Street.
The council is expected to formally vote on the municipal budget amendment at a special meeting on Aug. 8.
The council will also formally approve an amendment to the school budget, which received an extra nearly $509,000 in state revenue for fiscal 2014.
The School Board has proposed using $443,000 of the extra revenue to pay for additional teacher retirement costs, which were shifted to local school districts in the state budget.
The board proposes using the remaining revenue to pay PDT Architects of Portland for the next phase of plans for construction of a new elementary school and renovations at Brunswick Junior High School.
The school budget amendment will have to be approved in a special referendum, scheduled for Aug. 20.
Councilors voted 7-1 to hire Scott Simons Architects of Portland and Warren Construction Group of Freeport to design and work on renovations for the McLellan Building.
The town plans to move its Town Hall and Council Chamber facilities into the first two floors of the building by next spring.
Councilor John Perreault opposed hiring the firms, citing concerns about the possible high cost of renovation. He said he also wants more information about the bidding process for the project.
“I think that’s where people have problems,” Perreault said.
While $50,000 has been budgeted for design work, the cost of renovations will not be known until the construction manager provides an estimate.