Suspicion and concern grow over State Pier development
Potential developers get until Feb. 22 to craft proposals
By Chris Busby
Portland officials hope the Maine State Pier will be the site of a world-class development project by the end of this decade, but developers of the world will have less than four months to craft proposals for such a project.
That short timeframe has raised concerns the publicly owned pier will not attract a wide range of plans from private developers, who will need to do extensive (and expensive) work to put a viable proposal together for the complex waterfront property.
It’s also raised suspicions that city officials are tailoring the proposal process to fit the needs of Ocean Properties, a national hotel and resort development and management company with personal and political ties to city and state officials.
As The Bollard reported last spring, Ocean Properties executive Bob Baldacci (brother of Gov. John Baldacci) and former Portland City Councilor and Mayor Peter O’Donnell (an employee of the state Department of Economic and Community Development) were pitching Ocean Properties’ plans for the pier in private, one-on-one meetings with city councilors nearly a year ago.
As late as last month, O’Donnell was bending the ear of City Council candidates, trying to gain support for the latest incarnation of Ocean Properties’ plans.
Last spring, city councilors who agreed to meet with O’Donnell and Baldacci said plans called for a luxury hotel on the pier. The Bollard subsequently viewed an architectural sketch drawn up for the company that showed a seven or eight–story hotel, a cruise ship terminal, and space for retail shops and a museum on the pier.
When city councilors and planning staff drafted new zoning for the area this past summer, they initially proposed allowing a hotel to be built on the pier, a suggestion that provoked the threat of a citizen-initiated “people’s veto.” A citizen-initiated referendum in the late ‘80s banned hotel and condominium development on the water-side of Commercial Street.
Councilors subsequently amended the zoning to allow hotel and office development on land at the foot of the pier, rather than on the pier itself.
Ocean Properties’ plans seem to have changed accordingly, and now call for a hotel and parking on land at the foot of the pier, said Kirk Goodhue, a real estate broker running for the City Council seat representing District 1, which includes the pier. According to Goodhue, O’Donnell told him last month that Ocean Properties has been in discussions with prominent Portland restaurateur Dana Street and owners of the Rosemont Market and Bakery to occupy retail space on the pier.
O’Donnell refuses to speak to The Bollard, and requested last spring that this publication never attempt to reach him for comment again. Neither Street nor bakery owner John Naylor returned calls seeking comment.
Bob Baldacci said Ocean Properties is still reviewing the draft RFP. “We haven’t made a decision on our proposal, to be quite frank,” he said. “We’re still assessing it.”
Timing is everything
Having changed the zoning at the Maine State Pier, the City Council directed its three-member Community Development Committee (CDC) to work with city staff to craft a formal Request for Proposals (RFP) to develop the property. Last week, the CDC held a meeting to finalize the RFP and get public input on it before it’s advertised.
Committee members Jim Cloutier, Nick Mavodones and Jill Duson spent a considerable amount of time discussing whether Compass Park, the public park next to the pier, should be included in the request for development plans. The committee ultimately decided to add language in the RFP suggesting the park can be developed for private use – though developers would be encouraged to provide an equal or greater amount of public space elsewhere in the pier’s vicinity should they propose to do that.
Aside from a few other technical changes, the main issue was the length of time developers will have to submit their proposals.
Former Portland City Councilor and Mayor Anne Pringle said she kept a tally of those who spoke at the CDC meeting, and noted that of 14 speakers, eight urged the committee to allow more than three or four months for proposals, and two supported a shorter timeframe.
Those two were Ron Ward, an attorney representing Ocean Properties, and Chris O’Neil, a former state legislator working as the Portland Community Chamber of Commerce’s “liason” to city officials on this issue. Both Ward and O’Neil work for the Portland law firm Drummond Woodsum & MacMahon; Ward is also an active member of the Portland Community Chamber.
Among those urging a more protracted process was Nicholas “Nico” Walsh, an attorney representing The Olympia Companies, local developers of several area hotels and commercial properties – including the Hilton Garden Inn, located diagonally across the street from the pier. Olympia President and CEO Kevin Mahaney also spoke in favor of a longer bid window, as did former Portland Planning Board member John Anton, who initially led calls for the “people’s veto,” but is now, like Olympia, considering crafting a proposal to develop the pier.
Walsh gave the committee a timeline that suggested developers be given at least nine months to put a proposal together. He said the complexity of the site and the multitude of regulatory hurdles a developer would have to negotiate to build on the waterfront necessitate the longer timeframe.
“It can take 30 days for developers to even know about [the RFP],” Walsh told the committee.
Duson was inclined to support a six-month bid process. Mavodones said he supported giving developers no more than four months, and “could live with 90 days.” Cloutier noted that some councilors expected a 30-day process, and personally advocated for 90 days.
Cloutier said it could take a full year after bids are in before construction begins, and cited the possibility an economic recession could hit the nation in 2008, negatively impacting a project in the planning or construction phase. Echoing comments made by Ward and O’Neil, Cloutier said in a subsequent interview that longer timeframes increase the risk a project will fall apart due to changing financial conditions.
A “wired deal”?
Several people at the CDC’s Oct. 11 meeting mentioned the fact Ocean Properties has already been working on plans for the site, and suggested the shorter bid process gives them an advantage over competing developers.
“They’ve already got a leg up,” Pringle said that evening. There will be “a fairness issue,” she added, if the bid process is not longer than three or four months.
In a subsequent interview, Pringle said she was “very surprised” the CDC set the Feb. 22 deadline after hearing a majority of those present at the meeting advocate for more time. “If, in the end, Ocean Properties is selected because they are better prepared to respond to a short RFP, it raises issues,” Pringle said. “Is it really a level playing field for other developers who may have an interest? The city needs to be sensitive to that.”
Anton was more blunt. “I went into [the Oct. 11 CDC meeting] a lot less suspicious this is a wired deal for Ocean Properties than when I left,” he said. “The whole thing smells.”
City officials are hoping lease revenue will help pay for repairs to the pier, which could cost upwards of $15 million or more. Anton said a longer bid process would generate more proposals, and thereby put the city in a better position to get a good financial deal.
City Councilor Cheryl Leeman agreed, saying a longer process is necessary to attract more bids and ultimately get a deal “in the best interest [of]… the taxpayers in Portland.”
Councilor Will Gorham, a real estate broker whose council district includes the pier, said he feels the bid process should be four-to-six months long. The two candidates challenging him for his council seat this fall agree that a three-and-a-half-month process is not long enough.
Challenger Kevin Donoghue, a close observer of city planning matters, supports a nine-month bidding window, given that Ocean Properties “has already been working on it for a year.”
“Three or four months is way too short for anybody to realistically come up with a plan – unless, of course, somebody already had nine months to work on it,” said Goodhue, Gorham’s other challenger.
Former Planning Board member Cyrus Hagge, a building contractor running for the District 2 Council seat this fall, also said the bidding process should be longer. “It’s a very complicated project [the city is] proposing, and in order to have a good, national competition, you need to have more time,” Hagge said. With a Feb. 22 deadline, “your proposals are going to be very sketchy,” he added.
Developer Drew Swenson, part of the team selected through an RFP process to develop land near the pier, agreed, saying more time would be necessary to put together a “quality” proposal that meets the city’s expectations for the pier, which he called “the linchpin” of development on the eastern waterfront.
Swenson’s development team is busy preparing to build a parking garage, office tower, condominiums and townhouses in the area, but has considered submitting a proposal for the pier, he said.
In an interview after the meeting, Cloutier defended the CDC’s Feb. 22 deadline. He said he got a call after the meeting from “one of the biggest developers in the United States,” whom he declined to name, and said that developer was satisfied the Feb. 22 deadline provides a “reasonable’ amount of time to submit a proposal.
Of the differing views expressed at the CDC’s Oct. 11 meeting, Cloutier said, “What we witnessed was some pushing and shoving between Olympia, which wanted to put Ocean Properties at a distinct disadvantage, and Ocean Properties, which wanted to put Olympia at a distinct disadvantage.”
Cloutier’s committee left open the possibility the deadline could be extended if developers call the city and request more time. He also said the committee expects developers to submit “concept” plans, rather than highly detailed proposals.
City Finance Department staffer Ellen Sanborn said small ads announcing the RFP will run in a few newspapers beginning late this month and in early November. Those publications will likely include the New York Times and theWall Street Journal. An ad may also be placed in The Journal of Commerce, a marine trade publication that covers the shipping industry. Sanborn said she hopes “word of mouth” among developers will also help spread news of this development opportunity.