Officials in Brunswick say the LePage administration appears to be meddling in a tax dispute between the town and the agency redeveloping the former Brunswick Naval Air Station.
The complaint centers on L.D. 492, a bill the LePage administration recently submitted that seeks to clarify the law exempting some aviation companies from paying property taxes. Brunswick officials say the proposal is designed to change the law and tip the scales in favor of the base agency, which has threatened to sue the town to ensure that one of its tenants, Kestrel Aeroworks, doesn’t have to pay $116,700 in annual property taxes.
The bill’s language is not yet public, but George Gervais, LePage’s commissioner of the Department of Economic and Community Development, said Wednesday that the legislation is designed to ensure that the law exempting aviation uses is applied consistently.
Gervais acknowledged that the Brunswick dispute had prompted the bill, but he rejected assertions that the administration was “picking sides” in the latest disagreement between the town and the quasi-municipal base agency, the Midcoast Regional Redevelopment Authority.
“If one municipality is going to allow the exemption to exist, they all should be able to rely on the statute for clarity,” he said. “If somebody that is allowing the exemption no longer can because of this, then that’s OK too, as long as it’s consistent.”
Brunswick Town Manager Gary Brown said the town was puzzled by the bill’s intent.
“By looking at the title, my assumption is that they want to basically change the law so it is without question clear that a manufacturer of private airplanes for millionaires should be tax-exempt,” Brown said.
Tension about the proposal stems from a series of entanglements among the town, the base agency and the LePage administration as each battles to shape the future of a facility that once generated 4,800 jobs and $330 million annually in regional income.
The agency has argued that Kestrel Aeroworks, an aviation company that employs 35 people, should be tax-exempt like several aviation companies at other municipal airports.
Steve Levesque, the authority’s executive director, said in November that taxing Kestrel could make Brunswick Landing less attractive to prospective aeronautical tenants and complicate the authority’s effort to lure other aviation companies.
The agency, effectively the landlord at the 3,300-acre base, has paid the first installment of the taxes under protest.
Documents show that attorneys for the agency and the town interpret the exemption law differently. However, the agency’s lawyer acknowledged in one email that the town could have legal footing to defend its decision.
Ben Tucker, vice chairman of the Brunswick Town Council, said in November that the efforts to change the law proved the town’s point that Kestrel is taxable.
“It also shows that they think they have a weak case in court,” he said.
Gervais said Tuesday that his agency originally hoped the state attorney general would give an advisory opinion on the matter. According to Gervais, the attorney general declined.
“I felt that (the economic development agency) could get an answer, but they (the attorney general’s office) felt like we were asking on somebody else’s behalf,” he said. “That wasn’t necessarily the case, but that was the way it was interpreted.”
The attorney general can issue opinions upon the request of the Legislature and other agencies. However, it does not do so for municipalities, which have their own legal counsel. The redevelopment authority is a quasi-municipal agency.
Officials for Attorney General William Schneider did not respond to a request for comment. The office is in transition because Janet Mills, Schneider’s successor, is due to be sworn in by Gov. Paul LePage next week.
Kestrel Aeroworks is among the redevelopment authority’s 21 tenants at the former Navy base. In January, the startup aircraft manufacturer moved most of its operations to Wisconsin after securing a financing deal that trumped Maine’s offer.
According to town records, Brunswick is expected to receive more than $450,000 in property taxes from base tenants this year. The Kestrel tax bill represents more than 25 percent of the anticipated tax collections at the base.
The bill from the LePage administration sets up potential tensions among Brunswick’s legislative delegation. The four members are all Democrats. However, one, Sen. Stan Gerzofsky, said Wednesday that he supports the administration’s proposal.
He said that if some airports are granting exemptions for operations similar to Kestrel, the company could go elsewhere.
Kestrel pays the base agency $200,000 per year to lease 85,000 square feet at Brunswick Landing.
“My position is that the way they’re treated in one town is the way they should be treated in all towns,” Gerzofsky said.
Gerzofsky’s statement won’t surprise some town officials, who have long suspected the longtime lawmaker of blocking efforts by Brunswick to obtain more say in the future of base.
Gerzofsky acknowledged Wednesday that he had submitted legislation this year designed to prevent towns from blocking redevelopment efforts.
He said the legislation wasn’t specific to Brunswick. He would not provide specifics, but denied rumors that his bill would strip the town of its taxing power at the base.
Brunswick currently has control over tax exemptions at the base. The town this fall shelved a request by the redevelopment agency to authorize a tax increment financing package that would return $20 million in property taxes to the redevelopment authority.
The move followed tensions about a provision in one of LePage’s supplemental budget plans that would have forced Brunswick to approve the TIF plan. The administration later removed the provision, but not before town officials cried foul.
“We have to find a way to be more collaborative,” Gerzofsky said. “Sometimes you have to create laws to make people more collaborative.”