Olympia pier deal already in doubt

An illustration of The Olympia Companies' plan for the Maine State Pier. (image/courtesy Olympia)

Olympia pier deal already in doubt 
In wake of state rebuke, talk of starting over

By Chris Busby

No one thought it was going to be easy, but few figured The Olympia Companies’ plan to redevelop the Maine State Pier would unravel so soon. 

Olympia needs to jump a long series of financial and regulatory hurdles to make its vision for the pier a reality. Last week, it ran headlong into the first barrier – a state law limiting the length of lease terms for publicly owned waterfront land – and fell flat on its face.

On Friday, a state legislative committee voted unanimously to kill a bill that would have allowed the city to sublease the pier property to Olympia for 75 years or more, rather than 30 years, the current limit. Olympia spokesperson Sasha Cook had said the longer lease term was essential to the company’s effort to secure financing for the $100 million development, which would include an office building, a hotel, retail space, a public park, a new cruise ship berth at the adjacent Ocean Gateway terminal, and $18 million for repairs to the pier itself. 

City councilors now say they have no idea how, or if, the project will proceed. Speaking privately, given that negotiations with Olympia are ongoing, several said a scaled-back version of the project may be possible, but also expressed a willingness to go back to square one: reevaluate the pier’s needs and function, and then issue a new request for development proposals informed by what’s been learned so far. 

Olympia has no Plan B at this point. Asked how the state’s rejection of the lease-extension bill might change the company’s plans, Cook said, “we haven’t even contemplated it yet.” Cook remained confident, however, that some compromise is possible. “I have no doubt we’ll be able to work with the city,” he said, adding that the company has been “extremely pleased with the cooperation” the city has provided thus far.

The city lobbied hard for the lease extension, but its efforts were complicated – and, some say, derailed – by a longstanding dispute with the state over which government entity actually owns the pier and the land beneath it. The city claims that a deed it holds dating back to the early 1980s, when the property was transferred to city control in a deal involving former tenant Bath Iron Works, gives it ownership rights over the pier and the submerged land under and around it. State officials disagree, asserting that all submerged lands a certain distance off the Maine coast are owned and controlled by the state.

City spokesperson Nicole Clegg did not return calls seeking comment late Friday, but in a memo sent to councilors by City Manager Joe Gray last Thursday, Gray said the city will not take legal action “in support of our position that we already have a deed.” 

A course of action that also appears unlikely: working with Ocean Properties, the development company whose bid for the pier was declined in favor of Olympia’s, despite OP’s professed ability to finance the project itself and its willingness to proceed under 30-year lease terms.

Ocean Properties executive Bob Baldacci, one of the governor’s brothers, said his company’s proposal for the pier is still on the table if city officials are interested. But OP didn’t make any more friends in City Hall when the Walsh family, which owns the company, hired a lobbyist to oppose the lease-extension legislation. 

Baldacci said granting a lease extension for the Maine State Pier “would set a dangerous precedent” and “open up a Pandora’s Box” of lawsuits by other pier owners seeking similar extensions. Ocean Properties has waterfront facilities in Bar Harbor; Baldacci said lobbyist Bob Tardy was working on behalf of two limited liability companies associated with that development.

Councilors aren’t buying it. “It seems to me it’s nothing but a ploy to get at Olympia and see if they can derail this bid process once again,” said Cheryl Leeman, who chairs the council committee leading negotiations with Olympia.

“I think it would be a shame if we had to be diverted from this [process] because of this issue,” said fellow committee member John Anton. “If this particular project fails because of regulatory or market issues, I can accept that,” he said last Thursday. “But to have it fail for legislative reasons would be frustrating to me.”

Asked how the city should proceed if the bill fails, Anton said, “we’ll cross that bridge when we come to it.”


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