Updated: Auburn developer confirms bid for Brunswick base housing
BRUNSWICK — George Schott, the developer behind several commercial successes in Auburn, confirmed Friday that he is trying to purchase the 702 military housing units associated with Brunswick Naval Air Station.
Schott, who last summer purchased the former Atrium Inn & Convention Center on Gurnet Road, said he has been negotiating with Northeast Housing LLC since the spring to buy the housing, although he has yet to ink a deal.
"Most of my communication has been through e-mail," Schott said. "Nothing is set in stone."
Schott's confirmation that he's angling for the housing ends months of speculation about a potential buyer. Last spring, Northeast Housing, a joint venture between the U.S. Navy and United Kingdom-based Balfour Beatty PLC, announced that it had entered negotiations with a developer "with local interests."
Northeast Housing made no mention of other interested parties. Schott, however, indicated that there were other potential buyers.
Lauren Rumsey, a spokeswoman for Northeast Housing and Balfour Beatty, said Monday that she couldn't confirm negotiations with Schott, or if there was more than one final bidder. However, Rumsey said the companies hoped to finish negotiations within the next "couple of weeks."
Schott acknowledged that his interest in the housing marks a departure from his previous ventures. He purchased the Auburn Mall in 2006, and later developed stores for Kohl's and Best Buy. He also convinced Ocean Properties, one of the country's largest privately held hotel development and operating companies, to take on a Marriott Residence Inn project, despite an economic climate that has limited growth in the industry.
Schott said he bid for the military housing because he sees great potential in Brunswick.
"When all is said and done, the base will be occupied and the housing will be occupied," he said. "It's an opportunity."
It remains to be seen how Schott's plan for the housing will mesh with the goals of the Midcoast Regional Redevelopment Authority, the organization overseeing the reuse plan for the base. MRRA has been concerned about the impact of releasing the housing units ever since Balfour Beatty and Northeast Housing announced last December that they were going to begin marketing the properties, a move that alarmed MRRA, the town and local real estate sellers.
Earlier this year, MRRA submitted a bid to buy the housing, arguing that securing the property was the only way to ensure that it would be released responsibly into the market and in accordance with the reuse plan.
MRRA's bid was turned down by Northeast Housing.
MRRA Executive Director Steve Levesque said that communications between his agency and Northeast Housing has been nearly non-existent ever since. Levesque said he learned of Schott's involvement only after calling him.
"We've had no dialog with Balfour Beatty (and Northeast Housing)," Levesque said. "We have sent several unanswered requests. ... We wanted to know who the potential buyer was, how close they were to a deal and whether or not they were going to work with us."
Levesque said he still believes MRRA is in "the best position to manage and dispose" of the housing. He added that MRRA will also pursue ownership of the land beneath the housing through an economic development conveyance.
The BNAS housing is different from housing in other base closings because the buildings are owned by a private entity and the land itself is owned by the military. That means that whoever owns the housing will likely be forced to rent the homes instead of reselling them.
"We're going to go after the land (whether we own the units) or not," Levesque said. "And we're going to impose development agreements with whoever owns the housing to make sure those properties are managed and developed in accordance with the adopted (reuse plan) and the community's goals."
Schott said that he, too, would make a bid for the land.
"That's the whole deal," he said. "Without the land, everything changes. ... You go after the land has hard as (MRRA)."
Asked if he envisioned other uses for the property besides housing, Schott said "absolutely."
Levesque, however, said Schott would be bound to the residential uses in the plan.
"If he thinks he can do something else there, it's not going to happen," Levesque said. "They have to follow the plan that the community supported and (the planning authority) adopted."
While MRRA and Schott may have differences, both appear to share similar interests. Schott said that some of the units should be demolished, a proposal MRRA announced earlier this year.
Levesque said it remains to be seen if the two sides agree on which units should be razed and how many.
Schott, like MRRA, also said he envisions marketing some of the units to first-time home buyers in the "condominium price range" as starter homes.
Schott also addressed widespread concerns that a private buyer would flood and depress the local housing market by offering the properties at reduced prices.
"You can't do what everybody thinks could happen because you can't afford to do it," he said, adding that military housing would likely require a significant up-front investment to prepare it for private buyers or renters.
Levesque said he was glad to hear that Schott shared some of MRRA's goals for the property.
"If he has the financial resources to maintain the long view that's good," Levesque said. "That's very important to us and the community."
"No matter what happens, we'll be the guardian at the gate for (the community's) interests," he added.
Schott said that he planned to work with MRRA if he secures the housing.
"You have to work with people and the market," he said.