Bath Iron Works plans new shipyard facility pending tax deal with city

The 900-ton composite deckhouse of the DDG 1000 warship under construction at Bath Iron Works is hoisted onto to the hull of the ship in this 2012 file photo.
General Dynamics | Bath Iron Works
The 900-ton composite deckhouse of the DDG 1000 warship under construction at Bath Iron Works is hoisted onto to the hull of the ship in this 2012 file photo.
Posted Aug. 02, 2013, at 1:30 p.m.
Last modified Aug. 02, 2013, at 6:19 p.m.

BATH, Maine — Bath Iron Works has announced preliminary plans to build a new outfitting building — just slightly smaller than the existing Ultra Hall — and make other major improvements at the shipyard pending approval and a new tax break agreement from Bath.

In a proposal to city councilors submitted Friday, officials from General Dynamics, which owns Bath Iron Works, wrote that they hope to begin this year building a 51,315-square-foot building, approximately 11 stories tall, at the south end of the shipyard, adjacent to the existing 68,000-square foot Ultra Hall.

The building would contain two 200-ton bridge cranes and provide space for shipbuilders to install the structures of ships in the building’s two bays, and outfit them with piping, ventilation, pumps, electrical consoles and other equipment, BIW spokesman Jim DeMartini said Friday.

BIW also hopes to tear down various older buildings and replace them with a new blast/paint building, and upgrade other facilities. Construction would be completed in 2015.

According to the company, the project would add to approximately $500 million of investment by the company of the last decade — investment “incentivized” by the U.S. Navy, Maine and Bath through payroll tax credits and three existing tax increment financing agreements with the city.

According to the proposal, that investment has allowed BIW to reduce costs and secure contracts for, among other ships, three DDG-1000 Zumwalt-class destroyers.

But in June, a U.S. Navy announcement that BIW had secured four, and possibly five contracts to build DDG 51 destroyers — versus the five awarded to BIW competitor Ingalls Shipbuilding — “sent a strong message about where BIW stands relative to its competition,” the proposal stated. “Although BIW was awarded four ships, the inescapable fact is that BIW was not the winning bidder.”

The proposal also stated that “In order to improve our competitive position to win future work, BIW must reduce the cost of building ships in Bath, Maine, to a level the Navy can afford and at a price which is lower than our Mississippi competitors.”

On Wednesday, the City Council will hold a workshop to begin preliminary discussions about the project. A new tax increment financing agreement would require approval by the City Council and the Maine Department of Economic and Community Development. The proposed agreement would return a percentage of property taxes on new development to BIW

On Friday, DeMartini declined to offer more specific details of the proposed project, including what percentage of property taxes on new value the company would request be returned to them.

BIW has two 25-year tax increment financing agreements with the city that return a percentage of property taxes on the original shipyard and the land-level transfer facility completed in 2001 to the company.

A third district was created in 2008 when the city built Wing Farm Business Park which includes BIW’s $40 million Ultra Hall. This area does not return any property tax revenue to BIW.

DeMartini said the new project is not designed to increase or decrease employment, but to allow the company to “streamline our processes so we can become more affordable.”

On Friday, Bath City Manager Bill Giroux declined to discuss the proposal before councilors had an opportunity to review it.

“We’re very happy to see that Bath Iron Works is considering new investment in the shipyard,” he said.

The council will hold a workshop on Wednesday after the regular City Council meeting, which begins at 6 p.m. at Bath City Hall.

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