November 28, 2012

Brunswick, base agency square off over taxes

In the latest dispute with the town, the redevelopment authority wants to make sure aircraft start-up Kestrel Aeroworks is tax exempt.

By Steve Mistler smistler@pressherald.com
Staff Writer

(Continued from page 1)

Today's poll: Brunswick taxes

Should the agency redeveloping Brunswick Naval Air Station be able to exempt one of its tenants, Kestrel Aeroworks, from paying property taxes?

Yes

No

View Results

click image to enlarge

In this February 2011 file photo, Kestrel Aircraft Company shows off one of its planes during a ceremony at the former Brunswick Naval Air Station. The Midcoast Regional Redevelopment Authority has indicated that it may sue the town of Brunswick to recoup $116,700 in taxes that the authority has paid for Kestrel Aeroworks, an aviation company that employs 35 people.

Portland Press Herald photo by Shawn Patrick Ouellette:

"We don't believe in making decisions based on theoretical or future outcomes," she said. "When something happens, we act and do so quickly."

Levesque said the redevelopment authority will pay Kestrel's tax bills until the issue is settled. He said the lease agreement includes a provision that will require Kestrel to reimburse the authority if a court rules that the operation is taxable.

"We protected ourselves," Levesque said.

The town's case is backed by its legal counsel and an opinion by the Maine Municipal Association. Additionally, Maine Revenue Services referred Brunswick to a 1956 ruling by the Maine Supreme Judicial Court that upheld the town of Owls Head's decision to tax certain buildings at Rockland Municipal Airport.

That decision hinged on the state law's definition of public use for municipal corporations that lease airport buildings to private companies for non-public uses. Brunswick contends that a court would interpret the Kestrel case similarly because the redevelopment authority, a quasi-public corporation, is leasing space to Kestrel for private operations.

The authority says that interpretation is inconsistent with other tax-exempt properties at other airports.

The LePage administration hasn't committed to proposing legislation to ensure a tax exemption for Kestrel.

George Gervais, commissioner of the Department of Economic and Community Development, said in a written statement that the administration is considering "clarifying legislation."

He said the law is being applied inconsistently.

"It should be applied fairly throughout the state," said Gervais, who declined through a spokesman to further explain the intent or reason for the legislation unless, and until, it's submitted to the Legislature.

Tucker, with the Town Council, said, "If they're saying that they need to change the law, that proves our point that Kestrel is taxable. ... It also shows that they think they have a weak case in court."

He said it's another example of the redevelopment authority and the LePage administration carving Brunswick out of the redevelopment process.

The trend, as Tucker described it, came to a head in April, when the administration inserted legislation into LePage's budget proposal seeking to require Brunswick to authorize tax increment financing that would return $20 million in property taxes to the redevelopment authority.

Brunswick didn't learn about the provision until a work session on the budget. Gervais later said the administration wasn't "trying to do anything sneaky."

The proposal was never adopted, but Brunswick has been wary of the redevelopment authority and the administration ever since.

"What needs to stop is back-room dealings between Levesque and the governor's office," Tucker said.

He said the best way to repair the relationship between the town and the authority is to give Brunswick a seat on the authority's board.

The legislation that created the authority empowers the governor to appoint 10 of the 11 members, plus the commissioner of the Department of Economic and Community Development.

Tucker said the setup is flawed and unlike other base redevelopment agencies, like the one for the former Pease Air Force Base in New Hampshire, which includes the city manager of Portsmouth.

"The town needs to be able to have a say," Tucker said. "It doesn't mean that they'll have control. It just means they'll have a seat at the table."

Levesque said his agency is caught in the middle.

"I work with the board that is appointed," he said. "We're just trying to redevelop the base. It's been a bit of a political football."

 

Staff Writer Steve Mistler can be contacted at 791-6345 or at:

smistler@mainetoday.com

twitter/stevemistler

 

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Today's poll: Brunswick taxes

Should the agency redeveloping Brunswick Naval Air Station be able to exempt one of its tenants, Kestrel Aeroworks, from paying property taxes?

Yes

No

View Results

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