Wednesday, June 19, 2013
By Steve Mistler email@example.com
An Auburn developer will soon own one of the state's largest lodging facilities following a deal with the agency redeveloping the former Brunswick Naval Air Station.
The board of Midcoast Regional Redevelopment Authority, the agency overseeing development of the 3,300-acre base, has authorized the sale of a 248-room hotel and 190 adjacent housing units to Auburn developer George Schott. The pending sale, which will net the redevelopment agency $6 million, could end up being a departure from original plan for hotel, which the agency had hoped would become part of a convention center linked to a new golf course.
Steve Levesque, executive director of the redevelopment agency, said Thursday that the decision to sell the hotel to a private developer was a "pragmatic decision" based on a recent feasibility study that showed the Brunswick region couldn't support another hotel. Levesque said the report showed that occupancy rates at existing hotels were around 55 percent and that adding another lodging facility to the mix could cause "serious distress" for hotels in the area.
Levesque said that Schott, who already owns 700 units of former base housing on the facility and Brunswick proper, could still decide to build a conference center.
"The property will be in the hands of the private sector which is where it ought to be," said Levesque, adding that agency was concerned that waiting for the lodging market to rebound would lead to the decay of the lodging facility and the nearby housing units, which are essentially barracks for Navy personnel.
Levesque said the sale was in "no way" linked to a recent decision by the Brunswick Town Council against a 30-year agreement that would have returned $12 million in property taxes to the redevelopment agency. The vote came amid rising tensions between town officials and the agency. The state Legislature created the quasi-public agency, giving it autonomy over redevelopment efforts. However, the town has been asked to authorize grants and the tax abatement agreement to assist development at the base, now called Brunswick Landing.
The two parties have occasionally been at odds during setbacks in the efforts to replace the estimated 4,800 jobs and $330 million in annual income that left the region when the Navy pulled up stakes last year.
Schott, meanwhile, has been snatching up properties on the base and in Brunswick. In 2008, he purchased and razed a former convention center and hotel on Gurnet Road, which is close to the base. In 2010 he outbid the redevelopment agency for the 700 base housing units owned by Balfour Beatty, a Navy housing contractor.
Schott is perhaps best known in Auburn. He purchased the Auburn Mall in 2006, and later developed stores for Kohl's and Best Buy there. He later collaborated with Ocean Properties, a national hotel development firm, to build a Marriott Residence Inn project.
Schott is also know for some peculiar investments, including his 2009 purchase of 83 trailers from the Federal Emergency Management Agency. The trailers, which later found to contain high levels of mold, housed evacuees from Hurricane Katrina in 2005. Schott had hoped to sell the trailers for up to $10,000, according to a 2009 report in the Lewiston Sun Journal.
It's not yet clear what Schott's plans are for the base hotel. The facility is currently used to house Navy personnel working at nearby Bath Iron Works. The shipbuilder recently secured $38.9 million contract to help build three new Zumwalt (DDG 1000) destroyers.
Schott could not be immediately reached for comment on Thursday.
The hotel and barracks are part of the 120 acres zoned for professional office use. The redevelopment plan allows a variety of uses for that area, including corporate offices.
Levesque said the deal will occur in three phases over the two years. The Navy receives a 25 percent share of land sales at the base when sales there hit a cumulative benchmark of $7 million, could end up getting a cut of the hotel deal next year, Levesque said.
The Brunswick base was part of the 2005 round of closures by the federal Base Realignment and Closure Commission.