BNAS: The Field of Dreams series

Those of you who don't get or read the Brunswick Times Record, and you are legion, probably haven't seen the op-eds of mine they've run over the last few months. So here, free of charge, is the series. And this is the only place you can get them, since the archive function at the Times Record has become largely non-archival.

Part I:

Brunswick Naval Air Station: Field of Dreams?

Before explaining this title, I’d like to advance an odd hypothesis: flies cause garbage. If this shocks and perplexes you, let me restate it:

- Vacant schools stimulate local birth rates

- New and larger facilities make newspapers more successful

- Empty office and retail space drives business growth

- Unused industrial space fuels economic expansion

These assertions illustrate a common logical fallacy, one at play in the press releases and media coverage of redevelopment efforts for the Brunswick Naval Air Station.

Readers may recall “Field of Dreams,” starring Kevin Costner, a movie I love. It is based on “if you build it they will come.” This dream is relevant to our local circumstances; let me explain.

We’re frequently presented with rosy forecasts for Brunswick Naval Air Station redevelopment. How many times have we read “the phone is ringing off the hook,” but with no specifics?

We’re given projections of as many as 13,800 jobs, annual wages of $730 million, and property tax revenues of $19 million. Such figures were publicized in the Times Record and elsewhere, and they stem from a report funded by base redevelopment officials.

The specific report containing these figures was written by consultants, who were hired by other consultants, who were hired by an agency, established by the state, which has now been replaced by an authority. Government in operation is a wonder to behold, isn’t it?

I obtained and read the report, and I began to suspect that the figures quoted above were based on nothing more than the “Field of Dreams.” Hoping there was more to it than that, I contacted the head of the MRRA and asked. I was told my suspicion was correct.

These wildly optimistic figures are not based on a detailed assessment of global, national, state, or local economic conditions; they are not founded on local or regional demands for business space; they do not consider Maine’s and Brunswick’s anti-business attitudes and policies; nor do they factor in what has occurred in nearby base closures, like Loring, Pease, or Dow. And it’s safe to say the figures reflect primarily private sector activities, instead of government agencies and non-profits like colleges, homeless shelters, etc.

Instead, and I quote, “the methodology they used is standard build-out analyses for comprehensive planning purposes.”

Let me be very clear what this response from the MRRA means. One computes the square footage of the various facilities that could be reused or built anew, and assumes specific uses for them. The available space is then divided by assumed space per type of employee to arrive at a maximum employment estimate. Those employment counts are multiplied by assumed annual incomes to arrive at maximum annual wage estimates.

To reiterate: the projections of employment, economic impact, and tax revenues are based entirely on square footage that could someday be available, and an array of assumptions derived from it. In other words, the “if you build it they will come” theory.

Which is why I put forth the opening hypothesis and its corollaries. If we are to accept the projections of the consultants’ report, than my theory and its corollaries that follow from their “professional expertise” should have merit.

Put aside the results of recent tests of this theory, such as the Red Mill just across the bridge in Topsham, or the gorgeous building just south of Chilton Furniture in Freeport. Both were finished well before the recession began. They and the empty spaces on Main Streets everywhere must be the exceptions that prove the rule, right?

We don’t know how intensely our Town Council has been following base redevelopment personally or officially, and we don’t know how much the council considers it their obligation to fully understand what is going on. If they have, wonderful. If they haven’t they should dive in now, because the future of this town is at stake in more ways than one. And that future is in their hands.

I didn’t spend more than a few hours digging in to this subject, but that is enough to raise serious concerns about the underlying foundations of the redevelopment effort, and how rigorously we are being informed. And I lament the willing acceptance by the media, including the press, of any MRRA releases, without challenge, when that press should have a healthy skepticism in protecting our interests.

I don’t know about you, but I’d like the economic projections for the future of this town to be based on something more tangible than a tag line from a movie.

Oh…and one more thing. If economic development is this easy, I can build a 20 story office building on my “back forty.” All I’ll need is a full grant from state and local government to cover the costs, and I could bring as many as 2000 new jobs to the Brunswick area. I hope all cognizant officials will give my proposal their full and sincere consideration.

And you can do the same; so what are you waiting for? Remember, “if you build it, they will come.”

Part II:

BNAS: Field of Dreams, Part II

Apparently there’s only one reason that Maine has the most dismal economic outlook of any state in the nation, and is in the grasp of a demographic winter. Some say we are “managing our demise,” and it’s hard to argue we aren’t.

That one reason must be a shortage of free real estate available for development and economic growth. Especially free real estate that has been cleared of vegetation and holds improvements and infrastructure.

Fortunately, we are being told, economic salvation is at hand. The cleared land and improvements becoming available for development as the federal government shuts down the Naval Air Station are, it seems, the “silver bullet” in our economic development arsenal, not to mention the runways and aviation infrastructure that will be left idle.

So what if Maine is 35,000 square miles in area - some 3 to 20 times larger than any other New England state? With a population density that places it in the bottom fourth of all states? Pointing this out only betrays a cynical and pessimistic point of view.

Luckily, Brunswick and the state are working hard to preserve “Land for Maine’s Future” and “Land for Brunswick’s Future” to fend off economic development pressure. Heck, we’ll show those greedy, job-creating capitalists.

No doubt an aerial video mapping of the state would find only a few acres here, a few acres there as yet undeveloped and fit for economic growth. This must be the cause for the jubilation over the pending availability of Naval Air Station property.

What a relief! Finally, in this overdeveloped region, a rare chance to do something constructive!

Given this positively splendid opportunity, please bear with me as I try to clear up some minor confusions.

In a prior column, I cited MRRA projections that property tax revenue could increase as much as $19 million from base redevelopment. That supposes a 2/3 increase in taxable valuations in Brunswick. Or the equivalent of nearly 5000 new homes with tax levies of $4000 each. Must be the tooth fairy is a “silent partner.”

Then, a minor snag. Almost every candidate for base redevelopment falls into the non-profit category, meaning non-tax paying. Or they are government entities. Each of these expects to obtain acreage and the related property improvements at no cost (meaning at the expense of taxpayers.) Let’s look at those we’ve heard about:

- Bowdoin College – an educational institution exempt from property taxes.

- Southern Maine Community College – ditto.

- Southern New Hampshire University – ditto.

- Embry Riddle Aeronautical University – ditto. This organization, in particular, was celebrated as a harbinger of a phenomenal aviation based future for the redeveloped base. I called them a while ago, and asked what their typical enrollment per semester is. Answer – “about 50 students.” Then I asked what percentage of the student body is uniformed Naval personnel. Answer – “about 99.5%.” Math aside, it’s clear they served a military population looking to advance their careers. With the military aviation element gone, where would they find a new and previously undiscovered group of aviation students anxious to enroll?

- Brunswick Park and Gardens – certain to be a non-profit entity exempt from property taxes, and expecting a no-cost gift of real property.

- Assorted town government facilities, recreation sites, etc. All tax exempt and all expecting no-cost property transfer.

- Potential DOD/Coast Guard reserve organizations – all tax exempt.

Oxford Aviation is the one private sector enterprise cited as a splendid anchor for base redevelopment. Great! I’m looking forward to the economic growth they’ll provide for Maine (instead of simply relocating existing activity.) I have a few questions, though.

Reports are their current location at Sanford Airport cannot accommodate the larger aircraft they want to service, while BNAS can. I could be wrong, but didn’t Air Force 1, a 747, regularly land at Sanford Airport during Bush administrations? Does Oxford really have planes bigger than 747s that it wants to bring into Brunswick for paint jobs?

Is Oxford claiming that longer runways and larger apron areas will grow their business base? How many contracts have they declined because they simply didn’t have the room to accommodate the aircraft at Sanford? How many because the planes could not land at Sanford, even though a high security 747 and entourage could?

Is Oxford claiming the business they propose to conduct in Brunswick is in addition to their business in Sanford, or is it, in reality, simply relocation to a larger base? Was any “political” encouragement involved?

Progressive disclosure is in effect on the Oxford case. F. Lee Bailey, noted aviation contractor, is now suggesting that a taxpayer funded expansion to BNAS facilities would be helpful. It’s beginning to look like the Oxford proposal has more to do with generous economic benefits from the taxpayers than it does with business expansion. What do you think?

Unfortunately, most of the above are not economic expansion, but instead, relocations to take advantage of generous taxpayer funded and subsidized land and facilities. Virtually none expect to pay full value for what they will occupy.

Funny how when those in power propose such arrangements, they’re ‘tax incentives’ and ‘public investments.’ When their opposition proposes them, they’re ‘tax breaks’ and ‘corporate welfare.’ Political moral relativism is alive and well!

(note: Jim Horowitz, CEO of Oxford Aviation, responded to this column with a letter to the editor.)

Part III:

Field of Dreams … or Field of Photoshop?

(Originally Published in the Brunswick Times Record Friday, June 19, 2009; See annotations to that version at the end)

In recent commentaries, I’ve addressed redevelopment of the Brunswick Naval Air Station, invoking the imagery of Field of Dreams. Its “if you build it they will come” tag line seemed to fit. Jim Horowitz, president of Oxford Aviation, thoughtfully responded to the second of the commentaries.

Inspired by Horowitz, I’m moving forward on imagery. It now seems more appropriate to build on an “if you Photoshop it they will spend their money” theme. I will explain.

But before I do, a few comments regarding Horowitz’s letter (“Oxford Aviation responds,” May 12). He says the 3,000-foot runway at Oxford County Regional Airport is “the limiting factor stunting our ability to grow into the larger corporate market.” Why did he fail to mention the 40 percent longer runway (4,200 feet) at his Eastern Slopes facility in the Fryeburg area? And I hope he’s noticed that the current administration is working hard to kill off “the larger corporate market.”

Horowitz implicitly corrected me on Oxford’s relationship with Sanford Airport by ignoring it, and probably for good reason. I was swayed by all the hoopla around Oxford establishing a “Sanford Jet Division” at that operational airport. Published reports, including some on the Maine State Web site; “Sanford Jet Division” photos on Oxford’s Web site; personal appearances by Gov. John Baldacci; and promotional rhetoric from F. Lee Bailey all convinced me it was real. Not to mention public dollars invested, venture financing arranged, and preparatory work begun. Sanford most likely isn’t a welcome subject for Horowitz to revisit.

Celebrated as the Sanford plans were, they followed on the heels of a flirtation with Pease Tradeport in Portsmouth, N.H., a superbly located and equipped airport when compared to Sanford and Brunswick. It has an operating avionics business, suggesting “cluster” or “hub” potential. New Hampshire’s business friendliness and economic and demographic factors are far superior to Maine’s. Yet reports are that Horowitz was making advances on Sanford while courting Pease.

Oxford’s commitment to Sanford proved short lived. Financing with OSO LLC, an investment firm, “fell through,” according to news reports. Reports also said OSO “declined to say why,” and “Horowitz did not return several calls seeking comment.” I tried contacting OSO myself to no avail. Sanford was left holding a sizeable bag for its efforts, although it appears that Horowitz still holds a lease on property there.

Recession specifics aside, one has to wonder why venture capital financing dried up. Did due diligence reveal enough financial and business case problems to sour the idea? If the proposal didn’t make sense then with private financing, why would it make sense now, deeper into recession, with taxpayer financing?

Or was Horowitz not willing to give up control to secure the financing, which is what venture capitalists usually require?

Now Brunswick and the MRRA are being romanced by Horowitz and F. Lee Bailey, and like a wealthy and lonesome spinster, the attention is flattering. The significant opportunity to leverage a vast public property and untold taxpayer funds is clearly appealing. Bailey could teach Vince the Shamwow Guy and Billy Mays a thing or two. Try these: “a tremendous opportunity for Brunswick, far beyond anything I had imagined” (only $19.95!); and “further cement Brunswick as a global leader in the aviation world.”

Don’t you have to start before you can lead?

Such hyperbole is seductive to an anxious and receptive public. While there is only a “letter of intent” to show for Oxford’s commitment to Brunswick, Horowitz is so devoted to us that Oxford’s Web site proudly depicts the huge new $42 million hangar at BNAS fully painted in Oxford regalia as the “Brunswick Jet Division,” opening in 2009, complete with a commercial jetliner heading inside (www.oxfordaviation.com/facilities.html).

That “photo” would lead you to believe they are already established at BNAS, a bit presumptuous and audacious under the circumstances, especially with nothing more than a so-far private letter of intent to show for the commitment on Horowitz’ part and on the taxpayers’ behalf.

As we consider a future with Horowitz, we should not forget the “broken hearts” left behind, and ask if we are vulnerable to similar fickle and politically driven opportunism. Optimism is great, but if anyone should know the deal isn’t done until the deal is done, it’s Oxford and those who have worked on development plans with them, including John Richardson, commissioner of Maine’s Department of Economic and Community Development, and other Midcoast Regional Redevelopment Authority officials.

Final questions

There isn’t enough space to address other salient details, so I’ll close with pertinent questions:

• How will John Richardson’s current state position and possible aspirations for higher political office influence negotiations and the eventual outcome for the public interest?
• Why are MRRA lawyers hiding Oxford Aviation’s letter of intent from public view? What parts of it don’t they think we should see? Isn’t MRRA supposed to be serving our interests?
• Why wouldn’t OSO or Horowitz answer on Sanford? What happened to that agreement, with a lease signed and public funds lined up, and in better economic times than we find ourselves now?
• Does Oxford have the financial stability, credit record, and backing to deliver on its promises? Has it delivered on those promises in the past? Is its record worthy of committing a $42 million hangar to them, and spending millions more annually to operate the airport for their benefit? What will the return on taxpayer funds be?
• On what basis does Oxford think it can take business away from well-established commercial jetliner service providers?
• If you were Jim Horowitz, would you keep both existing sites open after opening a mega-facility at Brunswick? Wouldn’t you consolidate common functions and operations for efficiency and greater competitiveness? If you did, would you still assert that all the jobs at Brunswick would be new, instead of relocated?

In summary, there’s more than enough grounds for healthy skepticism, especially when it’s the public treasury that seems to be taking on all the risk. In a state that is immensely challenged on both the revenue and expenditure accounts, we should demand iron-clad assurances and full disclosure of what is at stake.

The following expands on what was published:

The word “possible” before the term “John Richardson’s…..aspirations for higher office” was added by the Times Record editors. Apparently they are not familiar with Richardson.

In a subsequent review of file data, I came across a Forecaster article published in April of this year (link).

In the article, F. Lee Bailey, or “Lee Bailey,” as John Richardson calls him, had another “Shamwow” moment or two:

"We're looking for a paint booth that will accommodate an aircraft about the size of a (Boeing) 737," Bailey said. "There are only a few companies in the country that can paint an airplane that big."

"We think (a Brunswick operation) would become well-known throughout the world very quickly," he added.

After the meeting, Bailey that reiterated that assessment, adding that a first-class exterior painting operation would make Oxford Aviation "overloaded very quickly."

And then this, which is extremely revealing of how Bailey approaches a case:

"Fortunately for us, the American public has the attention span of a 4-year-old,"

Bailey's work with Oxford is good training for recognizing short attention spans, given their inability to take a deal to completion.

The same article points out that the 6000 ft runway at Sanford is a limiting constraint, even though it is twice as long as the too short runway at Oxford, accommodates Air Force 1, a mammoth 747, and is longer than, for example, the 5700 ft runway at Orange County Airport in Southern California, which is a thriving commercial airport.

"Company officials have since made assurances that the Brunswick expansion is a better opportunity because runways there will allow the company to work on larger aircraft that can't land at Sanford."

I think this is where the term “upselling” comes in handy. 3000 ft at Oxford Airport was the “limiting factor” even though he had a 4200 ft runway at Eastern Slopes. We can be sure he told Sanford that he needed their 6000 ft runway to expand to “larger aircraft.” Then we find out this spring that the 6000 ft at Sanford was a “limiting factor.”

Perhaps he’s looking to bring in the Space Shuttles for a new paint job and interior refurb before the program is retired. Now THAT would make a name for Brunswick! The “Cape Canaveral” of the Northeast! Can’t you just see F. Lee Bailey plugging that one on TV?