Ocean Properties’ less flattering side
City to examine lawsuits, permit problems
By Chris Busby
Ocean Properties, the New Hampshire-based hotel development company vying to remake the Maine State Pier, trumpets its portfolio of stunning projects, from the Westin Key West Resort, Marina and Cruise Port, down in Florida, to the Harborside Hotel and Resort, up in Bar Harbor. The company’s Web site, oplhotels.com, has links to upwards of 100 (mostly) posh hotels and resorts it’s built in the United States and Canada over the decades.
But as jaw-dropping as these accomplishments are, the company’s behavior behind the scenes in recent months has some observers raising their eyebrows, too.
Consider the situation in Portsmouth, where the company has a headquarters and several Marriott hotels.
Last year, Ocean Properties joined another plaintiff in a lawsuit challenging the Portsmouth City Council’s decision to amend zoning and waive parking fees for a hotel, conference center and parking garage development. A judge later ruled that Ocean Properties lacked standing to be a plaintiff in that case, and decided the case in favor of the city last February, though that decision is reportedly being appealed by the other plaintiff.
Meanwhile, Ocean Properties has another lawsuit before the court challenging the city of Portsmouth’s decision to bond $15 million for the parking garage in that same project, the Portsmouth Herald reports. That suit is still pending.
These legal actions prompted the Portsmouth paper to castigate the company in an editorial last October. “[I]t is clear both suits constitute an attempt to delay a project that will compete with Ocean’s hotels,” the Herald wrote. It quoted the city attorney as having said, “‘The pattern has been that Ocean Properties puts every possible issue into litigation.'”
There’s a different pattern developing in Bar Harbor, where the Bangor Daily News reports that the town’s planning office compiled a list in 2005 detailing “10 violations where [Ocean Properties] did work on [a waterfront property] before obtaining the proper work permits from local, state or federal officials.”
The latest snafu, which the Bangor paper reported last Friday, involves construction of a pool house on the site that town officials say is larger than the version presented on plans they previously approved.
Last Wednesday, the Bangor Daily News had another odd tale to tell. Earlier this month, while the planning board in Bar Harbor was discussing Ocean Properties’ proposal to double the size of the pier at its Harborside Hotel, the developer’s representative abruptly announced that the company is withdrawing its application.
And while the Bangor daily was printing its article on the pool house, the Miami Herald was reporting that city officials in nearby Hollywood are freaking out over another Ocean Properties project. In an article by reporter Todd Wright published April 20, the paper said Ocean Properties has yet to submit plans for a 17-story Marriott it signed an agreement to build in December of 2005.
Ocean Properties “doesn’t return phone calls from [Hollywood] City Manager Cameron Benson, has ignored the city’s request for status updates and canceled several scheduled meetings to talk about the project,” Wright wrote. “‘We are losing hundreds of thousands of dollars the longer this project does not get done,'” a city commissioner said. “‘I want to see if they are in breach of contract.'”
Ocean Properties officials have explanations and justifications for these recent dust-ups with the locals, and some Portland city officials say they’re eager to hear them – once they get a full accounting of the company’s legal history.
Portland City Councilor Kevin Donoghue, a member of the Council committee charged with evaluating the two proposals for the pier, said he intends to ask Portland’s city attorney for a full report on Ocean Properties’ legal wranglings over the years. Donoghue and the committee”s chairman, Councilor Jim Cloutier, both said the company’s legal history and record of dealings with other municipalities will be taken under consideration as part of the evaluation process.
The company’s dealings with officials in Hollywood, Bar Harbor and Portsmouth are “absolutely relevant,” said Donoghue.
“We’d make note of any pattern of failing to follow through on permits or engaging in litigation,” said Cloutier, though he added, “as a lawyer, you know I can’t be too heartbroken if somebody resorts to a decision-making process, whether it’s in the courts or mediation or whatever it is.”
The competing bidder for the pier property, The Olympia Companies, will be subject to the same scrutiny, the councilors said. Cloutier stressed that the companies’ qualifications to complete the project are the most significant factors in the evaluation process, but also said he’d like to find a way “to understand how [the companies’] employees think of them.”
Portland-based Olympia – a much smaller and younger company than Ocean Properties – doesn’t appear to have a lengthy history of squabbles, legal or otherwise, with communities it’s worked in, though a deal with the city to develop a parking lot off Marginal Way fell through several years ago, much to the city’s disappointment. That story will likely be rehashed during the evaluation process. (Olympia officials said a decision by the University of Southern Maine not to pursue student housing on the site led to the demise of the mixed-use project; Cloutier vaguely recalled other complicating factors, as well.)
Ocean Properties officials say the hotel in Hollywood is still “on track” and its design will be forthcoming. The company’s chief financial officer, Richard Ade, told The Bollard today that Ocean’s representatives met with Hollywood officials earlier this week and assuaged their concerns over the project’s future. He called Wright’s reporting on the situation “a little aggressive,” and questioned the accuracy of the article’s assessment of Ocean’s interactions with city officials there.
Hollywood City Commissioner Peter Bober, who suggested the city look into whether its contract with Ocean had been breached, did not return a call seeking comment today.
Ocean Properties principal Bob Baldacci, brother of Gov. John Baldacci, called the discrepancy over plans for the Bar Harbor pool house “an unfortunate situation,” and said the company met with town officials yesterday to discuss it. “The town thought it was larger; we were able to show them yesterday that it was smaller,” he said, noting that some adjustments were made once ground was broken for the structure.
Regarding the Bar Harbor pier plans, Baldacci said they haven’t been “pulled,” but are being redesigned and reengineered, and will be resubmitted soon.
Baldacci defended Ocean’s litigious response to the Portsmouth project. “We have no problem with any hotel developer coming into the market and playing by the rules and building facilities with their own money,” he said. “But in this instance, they’re not [doing that] and they’re asking for certain special exceptions above and beyond.
“We objected because we felt that’s a project the developer ought to pay for,” he added, referring to the garage bond.
A call to Portsmouth City Manager John Bohenko was referred to the city’s legal department, which did not respond.
Ocean Properties and Olympia will both need Portland officials to bend zoning rules in order to get their projects built as envisioned. Both are also seeking public investment, in the form of property tax breaks and other concessions, to undertake the pier’s private redevelopment.
Just as Ocean Properties is objecting to Portsmouth’s accommodations for the project there, Baldacci conceded that hoteliers here could raise objections to Portland’s efforts to foster hotel development at the public pier.
Baldacci didn’t seem overly concerned about that prospect. The same cannot be said for Donoghue, whose Council district includes the pier property.
“I think we should be wary of our situation,” he said. “Whenever we enter into [special zoning agreements] and tax breaks, questions of fairness will always arise.”
Given Ocean Properties’ aggressive litigation in New Hampshire, The Bollard asked Baldacci whether that wariness is justified here. “As long as there’s a level playing field, we have no concerns or objections,” he said, then added: “I’m not saying there haven’t been instances where we have to take a position. In Portsmouth, we feel there is not a level playing field being created and it’s not good for taxpayers.”
“We’re not litigators, we’re not looking for a fight,” said Baldacci. “We’re in a market, and our only concern is people play by the rules.”
Olympia shares that concern – specifically, it’s concerned that Ocean Properties is breaking the “rules” by changing its project during the evaluation process. Only time will tell whether that concern grows into a more formal – or legal – objection, or whether Ocean Properties will also find reason to cry foul, but one observer predicts litigation of some sort is inevitable.
John Anton, a former Portland Planning Board member and vocal critic of the city’s pier redevelopment process, told committee members at a meeting on the matter tonight that they need to clarify and document their decision-making process.
“You’re gonna get sued,” Anton bluntly warned.