A controversial bill that would have exempted aviation businesses at Brunswick Landing from paying property taxes has been withdrawn — for now.

The immediate impact of the move: Brunswick won’t have to worry about repaying $116,700 in property tax collected from Kestrel Aeroworks.

George Gervais, commissioner of the state’s Department of Economic and Community Development, removed the bill Monday.

Whether it will be resubmitted later in the session remains to be determined.

For now, municipal officials are declaring a temporary victory in a sort of game of legislative “chicken” among the town, the base redevelopment agency and the state government’s business recruitment arm.

Midcoast Regional Redevelopment Authority and Brunswick officials have squabbled for two years about the way the former naval air station is being repopulated with residential and commercial tenants.

MRRA officials say they are being prevented from offering the most attractive and effective deals to bring in tenants. Conversely, town administrators complain they are left out of the loop when deals are made, and that the town and its residents are suffering for it. It’s about property taxes. The crux of the current disagreement is whether fledgling aircraft company Kestrel Aeroworks is responsible for paying property taxes. Brunswick says it is, Midcoast Regional Redevelopment Authority says it isn’t.

Kestrel is one of 21 tenants currently operating at Brunswick Landing.

The startup airplane manufacturer employs 35 to 41 people in Brunswick. The Midcoast Regional Redevelopment Authority courted Kestrel because it expected to land the company’s prospective 600 assembly line and custom manufacturing jobs; Kestrel settled in Brunswick because its principals believed they would get a tax break.

But one year ago, Kestrel instead opted to site its aircraft assembly plant in Superior, Wis., claiming that neither MRRA nor Maine could meet an incentive package from Wisconsin that included tax increment financing — which is a way of diverting property taxes for use by developers over a set period.

Near the end of 2012, the town and the redevelopment agency squared off in a potential lawsuit over payment — or nonpayment — of the company’s property taxes.

Although MRRA eventually paid Kestrel’s bill of $116,700, it did so under protest, then enlisted the help of Gov. Paul LePage’s administration.

Earlier this month, Gervais — who also sits on the Midcoast Regional Redevelopment Authority Board of Trustees — submitted LR 492, “An Act to Clarify the Property Tax Exemption for Municipally Owned Airports.”

Midcoast Regional Redevelopment Authority Executive Director Steve Levesque has complained that a 1950s law that makes airports operating from municipally-owned facilities tax-exempt is inconsistently applied throughout the state, preventing his agency from attracting tenants.

But Brunswick officials, smarting from decreasing school enrollments and drastic cuts in state education funding proposed in LePage’s biennial budget, say they need every dime of revenue they can get.

If LR 492 had passed, the town would have had to reimburse the money MRRA paid on Kestrel’s behalf.

Attempts to contact Gervais Tuesday were unsuccessful. However, in a statement provided by DECD Communications Director Drew Morris, Gervais explained the bill’s withdrawal as necessary because it “failed to fully clarify all of the issues” and that its title “misrepresented the intent of the legislation.”

Levesque learned of the bill’s withdrawal Monday afternoon, but said he didn’t know why it had been removed.

“I don’t know, I haven’t had that discussion with (Gervais),” Levesque said. “(MRRA’s) board members had several discussions about clarifying legislation and endorsed the concept of the bill, but we haven’t seen the language in the bill itself.”

Two weeks ago, Brunswick Town Manager Gary Brown hired high-profile Augusta law firm Preti Flaherty to lobby for the town in MRRAbased matters. Whether that hiring had anything to do with LR 492’s removal depends on whom is asked.

“I think it definitely shows that the town, by standing up for its rights, was heard,” said Town Councilor Ben Tucker, also an Augusta attorney. “The town is absolutely willing to give incentives when appropriate. But these specific bills that were introduced in Augusta, both last year and now, would have short-circuited the town’s ability to make those decisions in the best interests of its taxpayers,” he said.

He referred to potential legislation in spring 2012 that, if passed, would have required Brunswick to return 80 percent of tax increment financing district revenue generated by Brunswick Landing’s tenants.

“I can’t speak for DECD’s motivation, but I’m sure there were a number of different factors,” said Andrew Cashman, chairman of the Brunswick Democratic Town Committee and also a Preti Flaherty attorney.

“If you look a the totality of it, it seems to indicate there’s been a shift toward a more conciliatory (attitude), and the town welcomes that,” Cashman said.

The bill can be reworded, changed, overhauled or even completely rewritten until the time it goes to the printer. After that, changes would require an amendment.

Topsham attorney John Moncure, a vice chairman of the Midcoast Regional Redevelopment Authority Board of Trustees, said the board had no input on the bill.

“All we really cared about was uniform application statewide so that it would be a level playing field,” Moncure said.

“We really know very little about what the proposed legislation was going to say, or why it was withdrawn. We’ve been witnesses to this process, and little more than that.”

jtleonard@timesrecord.com

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