Brunswick LRA, Navy Agree on Revenue-Sharing Deal for 1,100 Acres
The LRA for the former Naval Air Station Brunswick became the latest beneficiary of recent changes to the rules governing economic development conveyances (EDCs) after reaching a deal with the Navy over the transfer of about 1,100 acres at the base located on the coast of Maine.
Under the agreement, the Midcoast Regional Redevelopment Authority (MRRA) will sign a $3 million promissory note with the Navy, requiring the authority to make annual payments over 20 years. Under the deal’s revenue-sharing component, the Navy would receive 25 percent of the authority’s lease revenue after it reaches $7 million annually. After annual lease revenues reach $42 million, the Navy would receive 50 percent of that revenue. Revenue sharing would remain in effect through 2034.
The agreement requires the authority to charge fair market value for properties and to reinvest profits in the project. The deal is projected to generate about $10.6 million for the Navy over its life.
“This approach will allow MRRA to affordably purchase the property and push ahead with implementing the reuse plan, while allowing the U.S. government to participate in the success of the redevelopment effort going forward,” said MRRA Executive Director Steve Levesque.
The agreement takes advantage of language Congress included in the fiscal 2010 defense authorization bill to provide DOD more flexibility when negotiating economic development conveyances with communities. Most significantly, the legislation lifted the requirement for the military to seek fair market value for EDCs at BRAC properties. The most recent deal to take advantage of the legislation was reached in July when the LRA for the former South Weymouth Naval Air Station, Mass., and the Navy struck an agreement over the transfer of 800 acres in an agreement that incorporates an upfront payment along with a share of land sales.
Maine Sen. Olympia Snowe (R) sponsored the original version of the legislation relaxing the rules for EDCs, the Defense Communities Assistance Act, in 2009.
DOD is expected to issue a final rule implementing the new statutory language regarding EDCs shortly.
MRRA and the Navy are scheduled to execute the purchase agreement by Oct. 31, with final closing expected to occur 30 days afterward, reported the Times Record.
The Navy is conveying other parcels of the 3,200-acre naval base at no cost under public benefit conveyances to the Brunswick Executive Airport, Southern Maine Community College, Bowdoin College and the town of Brunswick.