BRUNSWICK — The Midcoast Regional Redevelopment Authority has approved the sale of two buildings at the former Brunswick Naval Air Station that will bring the organization a financial windfall of $6 million.
In an unrelated vote, the board also approved signing a six-month lease option with the Bath Area Family YMCA for a former fitness center at the base.
The MRRA board, which is responsible for redevelopment of the former base, which closed last year, voted unanimously in favor of the housing and hotel deal after a closed-door meeting on Sept. 26.
The deal involves the sale of the former 248-room Navy hotel for about $3.4 million, and 190 housing units – essentially undersized apartments the Navy called “bachelor-enlisted quarters” – for about $2.6 million. The transaction, which has not yet been finalized, also involves six acres of land and a portion of Neptune Drive near the properties.
According to information provided by MRRA Executive Director Steve Levesque, a firm called Affordable Midcoast Housing LLC will use the buildings to house Navy personnel associated with shipbuilding activities at nearby Bath Iron Works, as well as transient business people in the region. Closings on the properties are expected to unfold in three phases before December 15, 2013.
Affordable Midcoast Housing is owned by George Schott, who already owns some 700 living units in Brunswick and Topsham that were left behind by the Navy. Schott outbid the MRRA in October 2010 to purchase the homes. Schott also owns numerous commercial properties, many of them in the Lewiston area.
A stipulation of the sale approved last week is that if Schott sells the hotel within 10 years, the organization will reimburse the MRRA 10 percent of the portion of the gross purchase price that exceeds $4 million. The agreement also stipulates that Schott, through his firm, will be responsible for maintenance of all the buildings as of the first of the three closing dates.
The MRRA had originally planned to develop the hotel into a conference and convention facility, according to its 2007 Master Reuse Plan for the base. But a study commissioned by the MRRA earlier this year showed that there is not sufficient demand for a conference center or hotel in the region, nor for another hotel.
Other hotels in the area have a combined occupancy rate of just 50 percent, according to the study. Another knock against the original plan was that substantial investments would have been required to make the conference center useable.
According to Levesque, the property has been marketed aggressively through unsolicited proposals to major hotel chains, a promotional event last fall involving the Maine Real Estate Developers Association, and a request for proposals looking for organizations that would manage the facility for the MRRA.
All of those efforts resulted in people from the hospitality sector telling the MRRA that the project was not financially feasible.
The MRRA board also approved a six-month lease option with the Bath Area Family YMCA for a former Navy fitness center. According to Levesque, the option will remain in place while the YMCA considers using the fitness center as a satellite facility, though no details of a long-term lease have been discussed.
The 248-room Navy Gateway Inns & Suites at the former Brunswick Naval Air Station, in an April 2011 photo, was built in 2004.