MRRA, local officials undeterred by Kestrel's decision to move

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BRUNSWICK — In the wake of Kestrel Aircraft’s recent announcement it will not be building airplanes in Brunswick, local officials are saying the decision will not have long-term negative effects on business attraction at Brunswick Landing.

“It’s a very unfortunate situation,” said John Moncure, chairman of the Midcoast Regional Redevelopment Authority Board of Trustees, but “it’s something from which we will recover.”

That view was shared by a number of Brunswick town councilors and economic development staff, who pointed to the nearly 120 jobs that have already been created on the former Navy base.

“The focus in the last week or so has been on what hasn’t been going on at Brunswick Landing. But I would like to shift the focus to what has been going on,” Special Projects Assistant Denise Clavette told the Town Council on Monday before giving a run-down of which companies have already signed leases and hired employees.

However the experience of losing Kestrel Aircraft, a start-up venture, to Superior, Wis., left some wondering if MRRA should stick with established companies like American Bureau of Shipping and Mölnlycke Health Care, which do not need as much initial public funding, or small, Maine-based businesses like Maine Tool and Machine.

“Base redevelopment isn’t going to be dependent on any one big white knight,” Councilor Benet Pols said. “If we get caught in some sort of crisis mode of looking to land the big fish all the time, we’re going to end up getting distracted from the broader mission, which is to plod along.”

Moncure said MRRA talks with everyone interested in coming to Brunswick Landing, but “we turn away a lot of people whom we feel are not capable of meeting their obligations,” he said, adding that was about half of those who expressed interest.

He said the key to successful re-development is finding the right company to lease Hangar 6, which was completed just before the federal Base Realignment and Closure Commission chose to shut down Brunswick Naval Air Station in 2005.

“Hangar 6 is still the crown jewel” of the Navy base, Moncure said. “We will be aggressively marketing it.”

Currently, Kestrel Aircraft has leased half of the 170,000 square foot building for 10 years. Moncure said MRRA is seeking a tenant for the other half of the hangar, and could make the entire building available in the future.

“We have to let it be known that that half is immediately available and the full hangar will be available when Kestrel’s lease expires,” he said.

In the mean time, Kestrel plans to hire up to 75 additional employees and use its portion of Hangar 6 for airplane maintenance and repair, MRRA Executive Director Steve Levesque said.

He said the company also intends to use the hangar for finishing and delivery of the single-engine turbo-prop airplanes to be built in Wisconsin.

“We’re getting an important segment of the company and that should not be dismissed,” he told the MRRA board on Tuesday. “This will be the face of delivery for Kestrel.”

But the experience left some feeling like Kestrel had been overly optimistic about its plans for Brunswick Landing.

“Kestrel raised everybody’s expectations,” Councilor Ben Tucker said, “everyone up and down the line pulled out all the stops to help, and then they went to Wisconsin.”

Levesque bristled at the suggestion MRRA could have been more cautious about the way the Kestrel deal was promoted in July 2010, when there was an Augusta fly-in attended by then-Gov. John Baldacci, U.S. Rep. Chellie Pingree, D-Maine, and other dignitaries, and said the press had sensationalized the story.

He said it was Kestrel’s decision, not MRRA’s, to go public with the announcement it was planning to build airplanes in Brunswick.

“We don’t make decisions to announce deals until the company’s ready to announce it,” he said. “Unfortunately, the financing that they had thought would come through didn’t come through. It happens sometimes.”

Wisconsin offered the company nearly $90 million in New Market Tax Credit allocations, another $18 million in Enterprise Zone Tax Credits, about $7 million in low-income loans, tax increment financing and free land.

Kestrel began looking around once it became clear the company was unable to get the funding it needed in Maine, something Moncure said Chief Executive Officer Alan Klapmeier had been up front about from the beginning.

“I think Alan Klapmeier was totally honest. He’s a very good businessman who obviously was looking out for the best interest of his company,” he said. “The name of the game in business is, you seek the best deal you possibly can for your company.”

The real problem, according to Councilor Tucker, is how companies play states against each other in a high-stakes economic development game.

“The larger issues is that businesses shop around, and so they force state and local governments to compete against each other,” he said.

“Should economic development in general happen this way?”

In the future, he and other councilors, including Chairwoman Joanne King, said they would more closely scrutinize any funding requests for business development at Brunswick Landing that come before the council, like Community Development Block Grants, and continue to require that MRRA, not the town, be held responsible if the companies do not create the required number of jobs.

Last year, the council helped MRRA apply for a $300,000 CDBG for Kestrel.

“We have our jobs on the council, to the citizens of Brunswick, to make sure we use tax payers money prudently,” Tucker said. “It’s a lesson learned.”

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

Sidebar Elements

MRRA board focuses on past accomplishments, future goals

BRUNSWICK — At a meeting on Tuesday, the Midcoast Regional Redevelopment Authority Board of Trustees downplayed Kestrel Aircraft’s announcement the day before that it would be locating a large part of its business elsewhere.

Executive Director Steve Levesque mentioned the company only twice during the meeting: Once when he thanked the the governor’s office and Department of Economic and Community Development for working hard to try to pull a funding package together for the company, and again when he told the board that MRRA would continue to pursue businesses just as aggressively as it had before.

He also said he was encouraged that Kestrel would continue to have a presence at Brunswick Landing.

Instead of dwelling on the disappointment, the board re-capped the highlights of last year and focused on the tasks ahead of them in 2012, the first full year that MRRA will be a land-owner on the former Navy base.

As of Jan. 9, MRRA has signed leases with 16 companies that have created a total of 117.5 jobs. MRRA is projecting that number will grow to 440. American Bureau of Shipping, a marine modeling company, and Resilient Communications, a secure data center, have hired the most employees, with 35 and 36 new jobs respectively.

Since last March, MRRA has received just over 2,000 acres on the former Navy base. The authority predicts the remainder of the property will be conveyed in pieces over the next year as environmental clearances are obtained.

The town of Brunswick recently received its 66 acre East Brunswick Transmitter site, and the Navy is scheduled to convey an additional 630 acres to the town this spring.

Southern Maine Community College has already received six buildings and 20 acres of land, and Bowdoin College, School Administrative District 75 and Family Focus are still awaiting property in Brunswick and Topsham.

Last year MRRA applied to the U.S. Treasury to be able to distribute New Market Tax Credits, which it could use to entice businesses to Brunswick Landing. If successful, MRRA would be allocated $68 million in credits. The authority is hoping to hear back in February.

MRRA is also waiting to see if a 400-acre portion of Brunswick Landing has been approved as a Foreign Trade Zone, and hopes to use the federal immigrant investor program known as EB-5 to channel foreign investment to the former Navy base.

In other major projects, MRRA has begun construction of a 79,000 square foot manufacturing building for Mölnlycke Health Care, which it hopes to complete by next January.

MRRA also hopes to study the sewer and storm water system at Brunswick Landing, work on the administrative and financial side of providing utilities to tenants, and make fire, life safety and Americans with Disabilities Act improvements to its buildings.

— Emily Guerin