January 3, 2013

LePage administration wades into Brunswick tax fight

The town accuses the LePage administration of 'picking sides' in its property tax dispute involving Kestrel Aeroworks.

By Steve Mistler smistler@pressherald.com
Staff Writer

Officials in Brunswick say the LePage administration appears to be meddling in a tax dispute between the town and the agency that's redeveloping the former Brunswick Naval Air Station.

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Gov. Paul LePage

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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. Officials in Brunswick say the LePage administration appears to be meddling in a tax dispute between the town and the agency that's redeveloping the former air station. The complaint centers on L.D. 492, a bill the LePage administration submitted to clarify the law exempting some aviation companies like Kestrel from paying property taxes. (AP Photo/Pat Wellenbach)

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The complaint centers on L.R. 492, a bill the LePage administration submitted recently to clarify the law exempting some aviation companies from paying property taxes.

Brunswick officials say the bill is designed to tip the scales in favor of the Midcoast Regional Redevelopment Authority, which has threatened to sue the town to ensure that one of its tenants, Kestrel Aeroworks, doesn't have to pay property taxes.

The language of the bill is not yet public, but George Gervais, Gov. Paul LePage's commissioner of the Department of Economic and Community Development, said Wednesday that it is designed to ensure that the law exempting aviation uses is applied consistently.

Gervais acknowledged that the dispute in Brunswick prompted the bill, but rejected assertions that the administration is "picking sides" in the latest disagreement between the town and the quasi-municipal 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."

Town Manager Gary Brown said Brunswick officials are puzzled by the intent of the bill.

"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.

The tension stems from a series of disputes involving the town, the redevelopment authority and the LePage administration over the future of a facility that once generated 4,800 jobs and $330 million a year in income in the region.

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 in Maine.

Steve Levesque, the authority's executive director, told the Portland Press Herald in November that taxing Kestrel Aeroworks could make Brunswick Landing less attractive to prospective aeronautical tenants and complicate the authority's effort to lure other aviation companies to the former air station.

The agency, effectively the landlord of the 3,300-acre base, paid the first half of Kestrel Aeroworks' $116,700 annual tax bill under protest.

Documents show that attorneys for the agency and the town have different interpretations of the tax exemption law. However, the counsel for the agency acknowledged in one email that the town could have legal footing to defend its decision to tax Kestrel.

Ben Tucker, vice chairman of the Brunswick Town Council, told the Press Herald in November that the efforts to change the law prove 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 department originally hoped that the state attorney general would give an advisory opinion on the matter, but the attorney general declined.

The Attorney General's Office "felt like we were asking on somebody else's behalf," he said.

The attorney general can issue opinions at the request of the Legislature and state agencies, but 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 incoming Attorney General Janet Mills will be sworn in by LePage next week.

Kestrel Aeroworks is among the redevelopment authority's 21 tenants at the former Navy base. In January 2012, 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 collect more than $450,000 in property taxes from tenants of Brunswick Landing this year. Kestrel Aeroworks' tax bill represents more than 25 percent of the anticipated collections.

The LePage administration's proposal sets up potential tension in Brunswick's legislative delegation. All four members are Democrats, but one, Sen. Stan Gerzofsky, said Wednesday that he supports the Republican administration's proposal.

He said that if some airports are granting exemptions for operations similar to Kestrel, the company could leave Brunswick for another location.

Kestrel now pays the redevelopment authority $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 Brunswick's efforts to have more say in the future of base.

Gerzofsky acknowledged Wednesday that he has submitted legislation this year designed to prevent cities and towns from blocking redevelopment efforts.

He said the legislation isn't specific to Brunswick. He would not provide specifics, but denied rumors that his bill would strip the town of its taxing power at Brunswick Landing.

Brunswick now has control over tax exemptions at the former base. The town shelved a request by the redevelopment authority this fall to authorize a tax increment financing package that would return $20 million in property taxes to the authority.

That followed tension over a provision in one of LePage's supplemental budgets that would have forced Brunswick to approve the TIF plan. The administration 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."

He said, "We have to get rid of what I call narrow thinking. A town can only think of its borders, but a base closing has regional impacts."

Details of Gerzofsky's bill won't be become public until it is printed.


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




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