What is the BDC?
The Brunswick Development Corporation (BDC) has been in the news lately after its purchase, for about $1million, of four properties at the corner Stanwood and Pleasant Streets. The BDC plans to convey the properties to the town for use as a new police station. Because taxpayers will not have to pay for the land; the project will be that much cheaper. There is no doubt that Brunswick will have to borrow less money to build the police station because of the BDC’s purchase of the land.
Who is the BDC and where does their money come from?
As the Times Record always reminds us: “The BDC was established in February 1995 when the corporation borrowed $1.7 million from the town and built the Brunswick Technologies building. After repaying the town, BDC then sold the building for $3.1 million.” It is a nonprofit “local development corporation” organized under Title 13-B of the Maine Revised Statutes. Its articles of incorproation, filed with the secretary of state include this language:
“This corporation is formed for the following purposes: to foster, encourage, assist, support, and promote the development, establishment, settlement, or resettlement within the Town of Brunswick, Maine of industrial, manufacturing, fishing, agricultural, recreational or other business enterprises for purposes of stimulating economic growth in the Town in part by providing support incentives for business to construct and expand facilities incorporating new techniques, combatting community deterioration, lessening the burdens of government, providing for increased tax base within the Town: and the corporation shall constitute “local development corporation” pursuant to 5 MRSA sec13081 (6).”
So using taxpayer raised funds as capital, the BDC invested in a building, repaid its loan to the town of Brunswick and made a profit. The profit is the basis of its operating capital which it can use to fulfill any of the business purposes outlined above.
Does the Town Council control the BDC?
No. According to its by-laws the BDC is managed by its board of seven directors including the Town Manager, Gary Brown, its finance director, John Eldridge, two town councilors, Joanne King and Suzan Wilson and three “public directors,” Joanne Favreau, Larisa Darcy, and Bill Morrell. In theory the council members are chosen by the council, in practice they’ve been appointed by the chair. The public directors have been chosen by the other four directors.
The Town Council, as a whole, exercises no control over the BDC.
If the BDC’s purpose is to promote business enterprise why is it purchasing land for the town to use as a police station? Is this legal?
The justification offered is that this land purchase falls within the area of “combatting community deterioration” and “lessening the burdens of government.” The argument is that the buildings on that corner were blighted and removing them will ultimately stimulate other growth in the area in addition to the new police station. Morevoer, by reducing the overall costs to the taxpayer the purchase reduces the burden of government. Finally the proposal includes the concept that the town would trade a piece of town owned land to the BDC for the land at Stanwood and Pleasant; the BDC could then use the swapped piece of land for purposes that are more clearly business related thus fulfilling their mission. Although there is no explicit agreement at this point, the operating assumption is that the town will likely give the BDC the current town hall building at 28 Federal Street in exchange for the land at Pleasant and Stanwood Streets.
The town attorney has provided the Town Council an opinion that the transaction between the BDC and the town is legal. The contents of the opinion itself remain confidential. In any event a challenge to the BDC’s action can only be brought by a member of the BDC or by the State’s Attorney General.