MRRA Annual Report 2014
Redevelopment activity on the properties at the former Naval Air Station Brunswick continued at an exciting pace in 2014. There are now over 50 entities (public and private), including 14 that are new to the State of Maine, doing business at Brunswick Landing and the Topsham Commerce Park. We are proud to announce that we have resident businesses in each of our six target sectors: aerospace, composites, information technology, biotech, renewable energy and education, in addition to other complementary business sectors. Collectively, these entities employ over 450 people with a promise of double that number in just a few short years.
The redevelopment effort has welcomed nearly $200 million in private and public sector investments ($150 million private, $50 million public) made to the properties over the past 3.5 years. Besides attracting individual business entities, we have been fortunate to attract five major real estate developers who are acquiring and redeveloping properties at both Brunswick Landing and the Topsham Commerce Park. In fact several of these companies continue to apply revenue proceeds from prior sales and leases at the former base and are reinvesting in other properties here. We are truly blessed and appreciative of the quality of the developers who are making this place part of their investment portfolio. Some notable examples of this phenomenon include the following projects that have occurred just this year:
MRRA sold the former communications headquarters building to Affordable Midcoast Housing (AMH), which accommodates Oxford Networks and their state-of-the-art secured data center. The acquisition of this property was made possible by the sale of the former Navy Hotel from AMH (previously acquired from MRRA) to Rousseau Enterprises to develop a new senior congregate housing facility;
JHR Development sold the former Commissary building in Topsham (previously acquired from MRRA) to Wicked Joe Coffee Roasting Company to establish their high-tech, energy efficient production facility;
The Priority Group, after rehabilitating of the former Navy Lodge and Recreation Center into beautiful facilities, has now turned its attention to the construction of new modern high quality buildings at the gateway of Brunswick Landing; and
Tom Wright, upon his acquisition of the former Family Services Center, has turned that facility into a multi-tenant services building and has redeveloped the former Vet Clinic to house a second Wild Oats Café location.
The redevelopment effort also continues to assist in the recovery of the local, regional and state economies impacted by the base closure. Equally important to the economic growth of the region is the success and growth of the Southern Maine Community College (SMCC) campus and Brunswick Executive Airport (BXM). The combined SMCC and University of Maine campus now contains nearly 900 students and staff. BXM is on pace for over 12,000 flight operations this year. Over $40 million in various construction contracts, mostly to local and in-state firms, have been awarded by MRRA since the Navy base closed. In addition, over $65 million has been added to the local tax rolls in Brunswick and Topsham. Just this fiscal year, over $1.8 million is being paid in real estate taxes from redevelopment of former base properties.
As one can imagine, the property mix and ownership patterns at the former base are becoming quite diverse. There are now 11 different property owners on the former base property, with several others currently under contract. In addition, over 30 buildings, comprising over 730,000 square feet are owned by entities other than MRRA and the Navy. We still have an inventory of over 500,000 SF for lease or sale to good job-creating businesses. We are also very excited about our new venture, TechPlace, a 95,000 SF small business incubator and manufacturing technology accelerator, which will open its doors in early January and provide a fabulous opportunity for the creation and growth of new businesses in a collaborative environment.
In conclusion, we are very pleased with our success to date on the redevelopment effort, but we also realize there is still a long ways to go to achieve the ultimate vision. Our progress has been consistent with the Reuse Master Plan and we are meeting and even surpassing our performance metrics.
We remain very passionate and excited about what this reuse project is becoming — Maine’s Center for Innovation.
Steve Levesque, Executive Director
Redevelopment of the former NASB continued at a brisk pace in 2014. There are now 56 entities doing business at Brunswick Landing and Topsham Commerce Park. More than 450 jobs have been created and more than $65 million in valuation have been added to the Towns of Brunswick and Topsham tax rolls.
One of the most exciting projects for 2014 is TechPlace, Brunswick Landing’s Technology Accelerator/Incubator. TechPlace will support the business development needs of early stage companies in a shared workspace. It will give entrepreneurs a place to network, research and develop ideas, build prototypes, test products, assemble, grow, and become successful manufacturing and technology companies. Phase I construction of TechPlace is nearly complete at the 93,000 SF former Navy aircraft maintenance facility at Brunswick Landing with opening scheduled for January 2015.
New businesses at Brunswick Landing and Topsham Commerce Park for 2014 include: RollEase, Frosty’s Donuts, Beltane Solar, Wicked Joe Coffee Roasting, Wild Oats, Jamaport, Family Focus, Rousseau Enterprises, Maine Aviation Corporation, and Blue Dog Daycare. By the end of the year, we expect to add another half dozen businesses in TechPlace.
Several other companies expanded their operations in 2014. Tempus Jets signed a lease for the entire east bay of Hangar 6 and is also leasing space in Hangar 5 and Building 250. Oxford Networks expanded its data center by 10,000 SF and added 12 new positions. Providence Service Corp., Brunswick Landing’s largest employer, also expanded its office.
Affordable Midcoast Housing (AMH) and Priority Real Estate Group purchased more property at Brunswick Landing. AMH bought Building 87, the Oxford Networks Building, and Building 516 “Night Flight.” Priority purchased land along Admiral Fitch Avenue and has recently broken ground on a new building for Sunray Animal Clinic.
Also of note, in fiscal year 2014, we collected more than $1 million in lease revenue and sold nearly $5 million in property. These gains allowed MRRA to pay off its $3 million note with the Navy 10 years earlier than expected, saving nearly $1 million in interest and banking fees. In addition, MRRA sent the Navy a revenue sharing check for nearly $1.5 million based on FY14 sales and lease revenue.
Brunswick Executive Airport
Brunswick Executive Airport (BXM) has seen significant increases in air traffic and aviation businesses since it opened three and a half years ago. There are currently 26 aircraft based at BXM and Tempus Jets’ arrival has significantly increased the number of aviation-related jobs at the airport.
Brunswick Executive Airport has been selected to participate in the FAA’s Military Airport Program (MAP). This program provides special funding to assist airport authorities to convert former military airfields into civilian airports. To date, the airport has received over $14 million in FAA and State grant funding for these improvements.
Recently completed projects include:
- Improvements were made to the airport electrical systems to improve reliability and increase energy efficiency. These improvements included construction of two new airfield lighting vaults, installation of new energy efficient lighting regulators, construction of a new approach lighting system for Runway 1R, and demolition of two dilapidated buildings.
- Concrete and joint repairs were completed on the primary runway and taxiways.
- The Hangar 5 roof was repaired and new boilers were installed.
- Obstructions were removed from the approach path to Runway 19L, greatly enhancing airport safety.
- The former Navy Air Operations building was renovated to serve as an air terminal building and home for our Fixed Base Operator, FlightLevel Aviation. MRRA also moved its offices to the building in August.
- A new Snow Removal Equipment (SRE) Building will be constructed to provide maintenance and storage facilities for the airport SRE.
- The fire protections systems for Hangars 4, 5 and 6 are being upgraded and brought into compliance with current code requirements.
- Hangars 4 and 5 are being renovated to increase energy efficiency and system reliability.
- Stormwater drainage improvements will repair several areas of failed drainage systems.
Future MAP Projects include wildlife fence improvements, runway centerline light removal, construction of a new general aviation hangar, repairing airport parking lots, and removal of several acres of unused pavement.
Utilities, Infrastructure, and Environment
MRRA has continued to work with Village Green Ventures (VGV) on their proposed development of a project to construct an anaerobic digester and associated “green energy” generation facility at Brunswick Landing.
MRRA and VGV have finalized a Power Purchase Agreement and ground lease. The facility will be located on a 4.25 acre parcel on the south end of the parking apron of Brunswick Executive Airport and when completed will have the capacity to generate up to 1 megawatt of electricity. Village Green Ventures hopes to break ground in December 2014 and expects to have the plant operational to full capacity by the spring of 2015.
When operational, the proposed facility will be capable of generating about 40 percent of the current electrical requirement at Brunswick Landing thereby greatly reducing or eliminating electricity delivered over CMP’s distribution grid to the campus. This project is an exciting concept and consistent with MRRA’s mission and redevelopment plan for a renewable energy center at the Brunswick Landing.
As part of a project funded by a grant from the Economic Development Administration, MRRA has demolished 23 buildings at Brunswick Landing totaling 69,922 square feet and four buildings in the Topsham Commerce Park totaling 21,575 square feet. These buildings had been determined to be unsuitable for reuse/redevelopment. McGee Construction of Gardiner, Maine started demolition in March 2014 and completed the job in May 2014. These sites are now primed for redevelopment.
MRRA Signs Long-Term Power Purchase Agreement
In August 2014, MRRA signed a new electricity purchase agreement with Constellation NewEnergy (through Maine Power Options). Under this new agreement, MRRA will be buying electricity at a fixed price of $0.06956 per kilowatt hour for 37 months. The agreement includes capacity pass through charges of about $0.01 per kWh.
Adding in the distribution charges MRRA pays to Central Maine Power to get the electricity to campus (on average between $0.03 and $0.035 per kWh), MRRA expects to be able to deliver electricity to the organizations doing business at Brunswick Landing and connected to MRRA’s electrical distribution system for well under the 14.9 cents per kWh projected by the Maine Public Utilities Commission for this winter in an October 6, 2014 Portland Press Herald article.
|FY 2014||FY 2013|
|Rental Income and Fees||$2,712,872||$1,841,738|
|Tranient Aircraft & Fuel Flowage Fees||82,511||69,300|
|Sponsorship – Air Show||–||68,750|
|Total Operating Revenues||$5,297,835||$4,116,218|
|Salaries, taxes and benefits||$1,321,950||$1,435,381|
|Other Purchased Services||622,001||363,507|
|Bad Debt Expense||123,681||–|
|Total Operating Expenditures||$10,846,041||$10,499,459|
|Operating profit (loss)||$(5,548,206)||$(6,383,241)|
|Non-Operating Revenues (expenses)|
|Gain or (loss) on Sale of Property||359,271||(7,730,303)|
|Total Non-Operating Revenues (expense)||$2,192,259||$(3,230,426)|
|Loss Before Contributions, Transfers and Impairments||$(3,355,947.00)||$(9,613,667.00)|
|Transfer to Subsidiaries||(10,000)||–|
|Impairment of Capital Assets||(7,219,693)|
|Change in Net Position||$(2,850,877)||$3,311,339|
|Net Position, beginning of year (restated**)||$123,730,223||$119,984,837|
|Net Position, End of the Year||$120,879,346||$123,296,176|
|*||Adjusting Journal Entry JE2 by Runyon Kersteen and Ouellette capitalized prior year expenses totaling $790,861 and increased Net Position at the beginning of FY 2014.|