Threats and confusion plague State Pier process
Uncertainty reigns on eve of committee vote
By Chris Busby
The debate over the future of the Maine State Pier is devolving into a series of disputes so tangled and contentious that even a statesman of George Mitchell’s stature would be hard pressed to make sense of it – never mind making peace.
Granted, it’s not helping that Maine’s esteemed former senator is slinging mud himself on behalf of one of the two companies vying to redevelop the public pier.
The first four months of the city’s formal evaluation process have been characterized by near constant sniping between the rival would-be developers – the Portsmouth-based hotel/resort development giant Ocean Properties, which Mitchell has joined forces with for this project, and The Olympia Companies, a smaller, Portland-based firm. There’ve been insults, cheap shots, allegations of political corruption and, most recently, threats of a lawsuit.
Add to this the general angst and confusion surrounding the process itself, which has divided the city council committee charged with reviewing the two teams’ proposals. Members of the council’s Community Development Committee (CDC) have said little about either proposal in their numerous public meetings to date. However, hints and suggestions from state officials and city staff have sent the teams scurrying back to the drawing board several times to make major changes on the fly.
“Quite honestly, we have not had one meaningful discussion on whether the minimum criteria, in toto, have been met,” said City Councilor Kevin Donoghue, a member of the CDC. “This has just been a political chest-puffing battle so far.”
The CDC is expected to vote on a recommendation to the full council tonight. Committee chairman Jim Cloutier said he expects the council will vote in late August on whether to begin negotiations with one of the developers.
If the pace and complexity of the process thus far is any indication, that timeline is optimistic. Furthermore, recent developments indicate the council vote will hardly spell an end to the wrangling, confusion and rancor now associated with the task of repairing the pier.
It seems the real battles are only just beginning to take shape.
“I’m not sure we can stir up the murky water underneath the pier any more than we have at this point,” said City Councilor Dave Marshall, who’s been attending the CDC’s meetings on the pier proposals. “It’s a mess.”
“If their intention was to fuck this up, [city officials] could not have done a better job,” one prominent participant in the process privately remarked last week.
Here’s a look at some of the conflicts on the horizon at present…
The Olympia Companies vs. Portland
There is now a distinct possibility the city will be sued by The Olympia Companies if councilors vote to pursue development negotiations with Ocean Properties.
As The Bollard reported April 1, Olympia objects to the CDC allowing Ocean Properties to change its proposal during the committee’s evaluation process.
In a June 22 letter to the committee, Olympia president and CEO Kevin Mahaney wrote, “If the City were to award Ocean Properties the bid based on their modified submissions, Olympia would likely win an appeal of the decision in court based on well-established legal precedent.”
“The city is definitely on shaky legal ground,” said Donoghue, whose council district includes the pier.
Donoghue also objects to any consideration of modified proposals at this stage, but his view is not shared by Cloutier or fellow committee member Jill Duson, both of whom say they will consider changes made after the Feb. 22 deadline for submissions.
“The advice we have from our attorneys is we’re doing fine,” Cloutier said. As for Mahaney’s now specific threat: “I don’t pay any attention to it.”
“We feel it’s a fair and open process,” said Ocean Properties executive Bob Baldacci. His take on Mahaney’s letter: “I think it’s a very credible threat, and I think it’s unfortunate to take that approach during this process.”
Ocean Properties vs. Portland
If city councilors decide to pursue Olympia’s plan for the pier, it’s also quite possible Ocean Properties will file suit, based on their recent history with city officials in Portsmouth.
As noted in our April 25 article, the company joined another plaintiff in a suit against that city last year. The lawsuit was based on Portsmouth officials’ decision to amend zoning and waive fees for a major development proposed by a competing company.
Though a judge ruled Ocean Properties lacked standing to participate in that case, the company has filed a separate suit against the city to block it from borrowing money to build a parking garage that would serve the same project.
Back in April, Baldacci said Ocean Properties’ concerns about the Portsmouth project are about maintaining “a level playing field” and doing “what’s good for taxpayers.” In a more recent interview, he expressed similar concerns about Olympia’s proposal.
Baldacci, a brother of Gov. John Baldacci, believes Olympia’s plan would require local, state and federal laws and policies that regulate coastal development to be “overturned.” In other words, the “playing field” would have to be changed to accommodate Olympia’s plan.
“In order to implement [Olympia’s proposal], it would take years and hundreds of thousands of dollars of taxpayer money or developer money” just to get the necessary permits, Baldacci said.
Taxpayer money would be spent if the city made an effort to help Olympia seek exemptions or changes to waterfront regulations. In his June 22 letter, Mahaney suggests the city do just that.
Noting his belief that Maine Department of Environmental Protection (DEP) officials are wrongly interpreting the state’s Natural Resources Protection Act, Mahaney wrote that rather than redesign the project, “we believe the better course is for the City and Olympia to work with the DEP and the Office of the Attorney General to sort through potential issues.”
Maine vs. Portland
The CDC’s discussion of the two pier proposals is taking place in the shadow of a dispute between city and state officials that could render either plan moot.
As the Portland Press Herald reported in April, the Maine Department of Conservation (DEC) is questioning the legality of the city’s rezoning of the pier property. And underlying those concerns is a dispute over who – the city or the state – owns the submerged land beneath and adjacent to the pier.
Attempts to clarify the ownership issue through state legislation have gone nowhere in recent years. Discussions between city and state officials are said to be ongoing.
This dispute took most city councilors by surprise – the daily paper had to take legal action to force the city attorney’s office to release information about it.
“The council should have been given a heads-up that this was an issue,” City Councilor Cheryl Leeman told The Bollard last spring. “Clearly, it’s a huge bump in the road.”
In retrospect, city attorney Gary Wood told the Press Herald last April that Portland officials should have discussed plans for the pier’s redevelopment with the DEC “much earlier.”
“It just never crossed anyone’s mind that [the DEC was] one of the departments we would need to bring in,” Wood told the daily.
The Great Unknown
City officials aren’t the only ones stumbling through the thicket of regulations governing waterfront development. As evidenced by the major revisions Ocean Properties has made to its site design in recent weeks, the development teams – even with all their legal and construction expertise – are also largely in the dark about what can and cannot be built at the pier.
Early on in the CDC review process, Baldacci and other Ocean Properties team members spoke confidently of how their original plan would meet all relevant state and federal requirements. Only in late May did they discover a fundamental problem with their design: new structures on the pier cannot be larger than those they replace. In this case, that means buildings on the pier cannot be wider or higher than the two-story transit shed there now.
This realization prompted Ocean Properties to move its proposed office building off the pier and onto land at its base. The multi-story garage it previously planned to erect on land nearby is now underground parking for over 300 vehicles beneath the office building and adjacent luxury hotel. On the pier itself, most of the elements of Ocean Properties’ original plan remain, but they’ve been reconfigured and topped by a nearly 1,000-foot-long roof with grass, trees and solar panels.
“This is more or less a precedent-setting development” in Maine, said Baldacci, who characterized the state’s interpretation of relevant laws as “evolving.”
When Olympia met with the DEP last month, Mahaney reports in his June 22 letter that they “suggested” any new development on the pier must be limited to “water dependent” uses, in keeping with the Natural Resources Protection Act.
Mahaney wrote that he and his team think the DEP’s interpretation of the act is “fundamentally flawed.” And he pointed out that the city’s new zoning for the area allows non-marine uses on the pier.
Regardless, in response to this “suggestion” from state regulators, Olympia submitted a revised plan that places most of its hotel on land at the base of the pier, with some upper-story hotel rooms hanging over the roadway off Commercial Street that leads to Casco Bay Lines’ ferry terminal. Hotel dining and meeting facilities would still be on the pier itself, in addition to shops, cafes and a restaurant.
At the CDC’s June 27 meeting, Olympia’s team made it clear they consider their revised design inferior to their original plan.
The two teams’ financial plans are also in flux. Most notably, in reaction to hints from city staff expressed during private financial meetings last month, both developers have now agreed not to seek tax breaks from the city for their projects – both had previously counted on getting big property tax breaks as part of their Feb. 22 proposals.
The financial terms of any lease deal for the pier are unpredictable at this point. Many factors are still either uncalculated or in dispute. And any deal would be subject to closed-door negotiations between city officials and the developer, followed by another council vote once terms of the deal are made public.
The Public vs. City Hall
Beyond evaluation of the two redevelopment plans lies a more fundamental question that remains unanswered: whether private development is the best way to go.
The city council voted last fall to issue a request for proposals (commonly called a RFP) as a means to test the market, to find out what the private sector had to offer. But that request did not bind the city to accept any of the proposals, nor was it an endorsement of the private-sector approach to repairing and revitalizing the property.
From small businesspeople in the Old Port to waterfront advocates and developers, many observers are wary of how large-scale commercial development at the city’s pier will affect surrounding properties and Portland’s economy.
“I think we’ve all been distracted by this silliness, picking which one we’re working with,” said John Anton, the outspoken former planning board member who’s running for a Portland City Council seat this year. “It’s all kind of beside the point. We’ve never gone back and asked ourselves the fundamental question: What do we want to have happen there?… What are the implications for the economy of the harbor as a whole?”
Anton threatened to initiate a so-called “people’s veto” campaign last summer if the council changed the pier’s zoning to allow hotels, office buildings and other non-marine uses. Though that campaign didn’t materialize – in part because councilors decided not to allow hotels on the pier itself – a people’s veto is still opponents’ best option if the council pursues either of the current proposals, Anton said.
Donoghue said any council decision to allow private development of the pier should be put before Portland voters for their approval or rejection in a special referendum. “We need to stir confidence in our people rather than wait for them to show no confidence in us,” he said.
“That would be an interesting referendum, I suppose, because it is very complicated,” said Cloutier, who knows of no precedent for such a vote. “At a certain point, you have representative government and you live with that.”
Duson, the third CDC member, did not respond to a request for comment.
Politics
Political suspicions have dogged Ocean Properties’ interest in the pier for over a year now, and the whispers keep getting louder.
Eyebrows first began rising with news that Bob Baldacci and former Portland city councilor and mayor Peter O’Donnell were holding private, one-on-one meetings with councilors to pitch Ocean Properties’ plans for the pier.
Those meetings took place before there was public council discussion of the pier’s private redevelopment. Shortly after those meetings came to light, City Manager Joe Gray suggested the city consider private redevelopment proposals for the facility, and councilors agreed to advertise the RFP.
One prominent local developer – speaking off the record – said he and many colleagues in big real estate decided not to invest the time and money necessary to craft a proposal for the pier because they figured Ocean Properties already had it locked up.
Mitchell’s involvement – first revealed when the proposals were submitted on Feb. 22 – has provided more grist for the rumor mill. It’s brought Maine’s most famous Democrat together with the Democratic governor’s brother to win favor with an officially non-partisan city council dominated by registered Democrats – some of whom, like potential Congressional candidate Duson, have aspirations for higher office.
In op-ed pieces and public comment sessions during CDC meetings, Olympia’s partisans are increasingly and more explicitly charging that political considerations are at play.
Not surprisingly, given the lack of love between the two teams, Bob Baldacci reacts strongly to such suggestions. “I think it’s a desperate effort on their part to attack,” he said. “That’s been their modus operandi for a long time. Frankly, it’s an insult to the intelligence of the council.”
