August 3, 2013

BIW asks Bath for tax break to expand shipyard

Its tax increment financing proposal says a new outfitting hall would make Bath Iron Works more competitive.

By J. Craig Anderson canderson@pressherald.com
Staff Writer

BATH –  Shipbuilder Bath Iron Works wants to build a new outfitting hall at its Bath shipyard that the company said will make it more competitive in winning major U.S. Navy contracts.

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Familiar Bath Iron Works xcranes fill the sky across the highway in Bath. The company is looking for a city tax incentive to expand.

2013 Press Herald File Photo / Gordon Chibroski

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BIW is seeking a tax break from the city known as tax increment financing for the project, which would be completed in 2015.

The proposed upgrade and expansion to the General Dynamics-owned company's shipbuilding operation would include a 110-foot-high, 51,315-square-foot outfitting hall just south of the existing 68,000-square-foot "Ultra Hall," according to documents filed Friday with the city.

Other existing buildings would receive upgrades, such as expanding the capacity of one of BIW's blast-and-paint facilities.

In June, the Navy awarded BIW a $2.8 billion contract to build four guided-missile destroyers over the next five years, with the possibility of building a fifth destroyer that would raise the contract's total value to $3.5 billion.

In its tax increment financing proposal, BIW noted that a competitor, Mississippi-based Huntington Ingalls Industries, was awarded a contract to build five DDG-51 destroyers, while BIW was awarded a contract for only four.

The proposal said building a second outfitting hall would make BIW more competitive.

"The results of the recent multi-year competition for DDG-51 class ships sent a strong message about where BIW stands relative to its competition," it said. "The inescapable fact is that BIW was not the winning bidder."

Tax increment financing is a type of subsidy for redevelopment projects in which anticipated future gains in surrounding property taxes as a result of the redevelopment are applied toward financing the debt to build the project -- in this case, a proposed expansion of BIW's shipyard.

Previous BIW expansion projects have been subsidized by the city using the same method.

BIW is one of Maine's largest employers, with about 5,400 workers. It has built more than half of the 66 Arleigh Burke-class ships purchased by the Navy since 1985.

In its proposal, BIW noted that it has invested a total of about $500 million in capital expenditures at its facilities in Bath.

The Bath City Council will consider BIW's tax increment financing proposal at its meeting on Wednesday.

J. Craig Anderson can be contacted at 791-6390 or at:

canderson@pressherald.com

Twitter: @jcraiganderson

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