Optimism accompanies Brunswick TIF agreements
BRUNSWICK — The Town Council is expected to move on a landmark tax deal with developers of the former naval air station next week.
Officials on both sides of the agreement, as well as experts who study Maine's economy, said it could help the town and improve economic redevelopment efforts.
The council on July 29 will consider two tax increment financing districts that could provide rebates to the Midcoast Regional Redevelopment Authority for up to $12 million in new property taxes it helps generate on the base over 30 years.
Before councilors have the final word, a public hearing will be held on the TIF districts proposed for Brunswick Landing and Brunswick Executive Airport.
If the council approves the TIF districts, all new property tax revenue generated by MRRA and other developers would be captured by the town and funneled into equal accounts for the town and base redevelopment.
MRRA and other developers would then be able to apply for credit enhancement agreements on a project-by-project basis that could provide them up to $12 million over a 30-year-period for infrastructure improvements on the base.
In addition, the town would have to use its side of TIF revenue for infrastructure improvements and other earmarked projects, as outlined in the TIF agreements.
Councilor John Richardson, one of the chief negotiators for the proposed TIF districts, discounted past disagreements between the town and state that delayed movement on the proposed TIF districts.
"It's clear to me the political forces have moved or stepped aside to (allow) MRRA and the town to work more closely together, as was contemplated when MRRA was first created," Richardson said.
While the TIF districts and accompanying credit enhancement agreements will help the town and MRRA pay for various infrastructure improvements, they will also help shelter new valuation from the state, preventing an increase in county taxes and a reduction in the town's state education subsidy.
Richardson said that will help protect the town against declining revenues from the state. So will the increase in businesses on the base, along with expanded property tax revenue.
"I would say that simply looking at the growth at Brunswick Landing today and the anticipated growth in the future, that will help alleviate the property tax burden that has happened as result of municipal cuts to the budget by the Legislature," Richardson said.
Steve Levesque, executive director of MRRA, said it's been MRRA's goal to work with the town.
"It has the potential to benefit both parties and generate substantial revenue. That's been our goal all along," Levesque said. "Redevelopment should benefit the community as well. That has been one of our goals from day one."
Two Maine economists said that while there are some downsides to TIFs in general, the agreement that has been reached by the Town Council and MRRA is a more traditional type that could benefit both the town and businesses looking to set up in Brunswick.
J. Scott Moody, chief executive officer and chief economist at the conservative-leaning Maine Heritage Policy Center, said the pending deal is an "encouraging sign that local governments in this case are realizing that Maine’s tax burden is a hindrance to economic development."
"The fact that they're coming to the table with these companies and willing to make this work, that's a huge shift for Maine," Moody said.
Charles Colgan, associate director for the Maine Center for Business and Economic Research and a professor of public policy and management at the University of Southern Maine, said TIFs are one of the few, if not the only, incentive tools Maine towns can use to attract businesses from outside the state.
"Since it's the only thing towns can do, it's good for the town to have, rather than not have," Colgan said. "Brunswick has to compete with communities across the country with all kinds of incentives and the TIF is the one thing the town has to offer."