Council OKs subsidy for Brunswick Landing business
BRUNSWICK — The local manufacturing arm of Sweden-based Molnlycke Health Care hopes to have an advantage over international competitors when it opens next year, after the Town Council unanimously approved a tax increment financing agreement on Monday night.
Molnlycke Manufacturing US will have its $14.5 million facility at Brunswick Landing designated by the town as a TIF district next year, pending approval from the state's Department of Economic and Community Development, which manages the use of the economic development tool across Maine.
Jim Detert, local project manager for the facility, Wednesday said the TIF will help the company create jobs and make improvements to the facility.
"It's absolutely a critical part for our expansion," Detert said. "The key message is this is a very important building block and the other part is up to us."
Detert said it's a win-win situation for the company and the town.
The TIF district will allow Brunswick to capture more than $16.6 million of new tax revenue from the facility over a 30-year period, according to projections from Molnlycke's application, and use the money for local infrastructure improvements and other projects.
Town Manager Gary Brown said the money will be used for expenditures that would have been paid for by the town's general fund.
"The basis for this position is that we simply don't want to take new tax dollars and spend them on new programs," Brown said at the council's Nov. 19 meeting, "because that doesn't provide the Brunswick citizens with any tax relief."
The property's new assessed value will be sheltered from the state and prevent the town from receiving an increase in county taxes and a decline in state education funding and revenue sharing, Brown said.
More than $2.97 million of the town's TIF revenue will return to Molnlycke over a 20-year period, as part of a credit enhancement agreement with the town, according to projections from the TIF application. Molnlycke will use that money for "site improvements, building construction, machinery, and equipment purchases, project financing and employee training."
Molnlycke's share of TIF revenue begins at 35 percent and is set to increase by 0.05 percent for every full-time employee the company hires in excess of 45, according to the TIF application. It cannot exceed 55 percent.
Detert said the company has already hired four people, and he expects to reach 10 or 11 employees when it begins using the Brunswick Landing facility in February.
Many of the employees will be trained by Molnlycke in Finland, Detert said, before the facility begins production, which is expected to happen in late summer or early fall 2013.
In other business, the council:
• Passed an ordinance to exempt active-duty military members from paying vehicle excise tax. It was an 8-1 vote, with Councilor Benet Pols opposed.
The ordinance is, in part, made possible by a state law passed in 2011 that allows municipalities to make the exemption. Brown said the exemption could have an impact of less than $5,000 on the town.
Pols objected to the inclusion of recreation vehicles and motor homes in the exemption.
• Stacy Frizzle, executive director of People Plus, reported the organization has increased membership during her first year on the job.
"When I joined the organization, we had about 650 paid memberships and we are now up at 930," Frizzle said. "That is due largely in fact to a system that we put in place by managing the memberships a little bit better and sending out reminders to members."
People Plus provides outreach and educational services to elders in the community, in addition to other age groups. Learn more at peopleplusmaine.org.
• Brown reported on early results from the Downeaster passenger train service to Brunswick, based on information provided by Executive Director Patricia Quinn of the Northern New England Passenger Rail Authority.
"Preliminary data suggests that 5,135 Downeaster passengers traveled north of Portland during the month of November, an average of 177 per day," Brown said. "More people traveled to and from Brunswick than from Freeport. Additional data will be provided in a few days.
"The train to continues to be a much larger success than I think much people expected," Brown said.