Five reasons not to turn the Maine State Pier into the next Maine Mall
Last month, the Portland City Council voted to continue closed-door negotiations with the private developer bidding to redevelop the Maine State Pier. The Olympia Companies proposes to build a luxury hotel, restaurants, cruise ship facilities and retail shops on the publicly owned property. Olympia’s plans also include a waterfront office building and park on city-owned land at the base of the pier, and parking for the whole project somewhere in the area (the developer has yet to disclose the location).
Earlier negotiations with Olympia produced a so-called “term sheet” that outlined the project and the financing and process necessary to complete it. The goal of the current talks is to finalize a master development agreement that would legally bind the city and the developer to move forward with a 75-year lease. If all the details can be hammered out in the next couple months, that deal would then go to the council for a vote.
A year ago, The Bollard satirized the city’s absurd decision to pursue such a deal in a piece titled, “The Bollard Boardwalk: Our Vision for the Maine State Pier.” Now, with Portland officials poised to pick up a pen and sign away rights to our pier for the next 75 years, it’s clear to us that satire is not a strong enough way to warn the public about this colossal folly. It’s just not funny anymore.
So we ask you to consider the following five reasons not to make the Maine State Pier the next Maine Mall. Prepare to be infuriated.
I can’t do what ten people tell me to do. So I guess I’ll remain the same.
— Otis Redding, “(Sittin’ On) The Dock of the Bay”
Reason 1: It’s unnecessary
The Maine State Pier is deteriorating due to natural causes. Over time, saltwater and sea worms have slowly eaten away at the wood pilings supporting it. The pier’s not about to fall into the harbor, but the strain today’s gigantic cruise ships place on the 86-year-old structure is obviously not extending its useful life.
City officials want the pier strengthened so cruise ships can tie up there for decades to come. But as they abruptly remembered last year — in the midst of deciding which developer gets the repair job — there’s a much better and cheaper way to handle cruise ship traffic: build a megaberth (a long dock capable of berthing modern cruise ships) at the brand new Ocean Gateway marine passenger facility next door.
In fact, earlier this decade, the Portland City Council approved plans for Ocean Gateway that included a megaberth, and even secured the permits necessary to build it. They knew then what they’re
trying to forget now: Ocean Gateway is the best place to park cruise ships and manage all the passengers and traffic they generate.
But Ocean Gateway ran way over budget and was delayed for years. The city — which built the $21 million facility using a mix of city, state and federal funds — ran out of money to finish the project, so the megaberth got cut.
It’d cost less than $7 million to build a megaberth at Ocean Gateway. The cost of shoring up the Maine State Pier for the same purpose: $18 million.
Or so we’re being told. The $18 million estimate is inflated, because it takes into account the work necessary to not only handle the weight of cruise ships, but also the weight of all the buildings Olympia wants to put on top of the pier. Without those buildings, the bill to shore up the pier for cruise visits would be a fraction of that sum.
Not that it matters. Cruise ships will come to Portland whether they can dock here or not. In Bar Harbor, a destination that gets a lot more cruise visits than Portland every year, passengers have to be tendered (ferried) into town from ships anchored in the harbor. It takes about 15 minutes.
So this is really about sparing seafaring tourists that small inconvenience, in hopes doing so will entice the major cruise lines to send more of their foreign-flagged, floating casinos our way.
When city officials dare to dream, they picture Portland as a “homeport” for a cruise line, or at least a regular “turnaround” destination on a regional run. To be competitive with other ports on the East Coast vying for the same business, we need an attractive, modern passenger facility. Cruise-tourism advocates have been lobbying for that for years.
That’s why we just spent $21 million of public money to build most of Ocean Gateway. Now, instead of figuring out how or whether to come up with a few more million bucks to finish the project, we’re asking a private developer to spend $18 million to fix the Maine State Pier?
Pass the pipe, councilors. I’m not baked enough yet to see the logic.
Reason 2: It’s impractical
It’s more accurate to say we’re asking The Olympia Companies to spend $100 million to fix the Maine State Pier.
That’s the rough estimate of the total cost of their project, and unless they develop all of it, Olympia says they won’t have enough income to justify the $18 million repair bill. Plus, the city is requiring Olympia to secure permits and financing for the entire project before construction begins, lest they bail out after building, say, just the waterfront office building. So it’s $100 million or nothing.
We already asked Olympia for $7 million to build the megaberth. Last September, before the council selected them over a rival developer, Olympia said sure, they’d put $7 million into an account dedicated to building the megaberth if they were selected.
During negotiation of the term sheet, they reneged on that promise. Bottom line: they couldn’t afford to build the megaberth and their mega-project on the pier, so they dropped the megaberth.
It’s hard to say what’s more unsettling: the prospect Olympia lied when they said they could the pay for the berth, or the possibility they earnestly crunched all the numbers and determined they could do it, but grossly miscalculated — just like public officials blew cost estimates for Ocean Gateway, a much smaller and less complicated project.
If Olympia miscalculates again, they can’t drop another part of the project. They’d have to drop out of the deal.
If that happened sooner rather than later, it could save a lot of people a lot of time. The permitting process necessary to complete a marine project of this size and complexity is extensive, to say the least — it involves all sorts of city, state and federal approvals. And Olympia hasn’t made the task of securing those approvals easy for itself.
The state’s position that the city can only lease the pier for 30 years, not 75, may or may not turn out to be a red herring. A bigger hurdle is the pier-top hotel.
Olympia plans to fill in the harbor beneath the part of the pier the hotel would sit on. Whether they can convince state environmental regulators it’s necessary to destroy habitat for a hotel remains to be seen.
When the city council rezoned the area two years ago, it addressed the question of whether hotels should be permitted on the pier. The answer was clear: no.
Now the city is trying to strike a deal for a project that would put a hotel on the pier. If they sign that deal, the council will later be asked by Olympia to make an exception to the zoning law to allow the hotel.
You might assume the same councilors who approved the deal for the project will certainly approve bending the rules so it can be built. But besides the ethical and legal booby traps inherent in granting such an exception, there’s no guarantee there’ll be enough votes to approve it. With three council seats up for election two months from now, the council won’t even be composed of the same councilors.
Then there’s the parking problem. The mystery location of the parking for this mega-project is expected to be revealed as part of the master development agreement, so we’ll just have to wait and see. And before they were selected, Olympia pledged to set aside $13 million dedicated to pay for parking.
Wait, when have we heard that kind of talk before?
Reason 3: It’s a rip-off
The term sheet calls for Olympia to make an $18 million investment in pier upgrades during the first year of the lease. In consideration of this expense, Olympia would pay no rent for the next 19 years, and begin paying the city $1.4 million two decades from now, a figure that would increase by 2 percent every year thereafter.
Two rent-free decades in exchange for $18 million worth of work the developer would have to do anyway before it build its project? At $1.4 million per year, 19 years’ worth of rent equals $26.6 million we’d forgo for this big favor. That’s not a “sweetheart deal,” as some councilors and critics have said. That’s lunacy.
Sure, if this mega-project ever gets built, the city will get about $1 million in annual property tax revenue. That would be nice.
It also would have been nice to get $1 million each from two other $100 million developments approved for land a stone’s throw from the pier: the Riverwalk condo/office/retail project envisioned to rise just east of India Street, and the condo/hotel/retail project proposed for the former Jordan’s Meats plant on Middle Street. Both developments floundered in the past few years, when the economy and credit markets were in better shape than they are now, and both mega-projects are now considered all but dead.
We’re to expect Olympia — which has never even attempted to develop a project of this size, expense and complexity — will succeed where the other two failed, and under worse economic conditions? Even with a massive rent break, that’s a stretch.
If you read our June issue’s cover story, “Chump Change,” you know the numbers tossed around regarding cruise tourism’s economic benefit to Portland are garbage — baseless and inflated. The city has no idea what the cruise industry’s impact here is because we’ve never spent a few grand to do a survey and don’t plan to do one anytime soon.
Restaurants and shops in the Old Port (gift and trinket shops, in particular) are among the few local businesses that get some money from visiting passengers and crew. Olympia’s plans show retail spaces for a “coffee shop,” a “café,” a “fish market,” three buildings labeled “shops,” and a “restaurant” on the pier, in addition to the hotel.
Whatever businesses sublease those spaces from Olympia would have two big advantages over competitors elsewhere in the Old Port: they’d be much closer to the ships and on property for which their landlord, at least for the first couple decades, is not paying any rent. You don’t have to do a study to figure out the economic impact of that scenario.
Would it make local restaurateurs and shop owners feel better to know that most of these competing businesses are planned for the western side of the pier, where the city’s request for pier proposals specifically told developers they should not build?
No, we didn’t think so.
Reason 4: It’s shortsighted
When the Maine State Pier was built in the 1920s, it was used to handle cargo moved by ship and rail. Passengers arriving on steamships (the cruise ships of their day) also disembarked there. In later years, it supported Maine’s fishing industry, and more recently, Bath Iron Works used the site to work on military vessels, and Cianbro completed two oil rigs and a tanker job there.
Over eight decades into its service as a vital part of Portland’s working waterfront, the pier’s future was radically reconsidered because it had a slow year and Bob Baldacci had a big plan.
After BIW left in 2001, city officials were confident the Portland Ocean Terminal (as the facility there is called) would continue to be used for marine-industrial work. Cianbro kept busy there through the fall of 2004, and city staff worked with the company to market the terminal in hopes of landing more jobs in 2005. But even after hurricanes ravaged marine-construction yards in the Gulf, they didn’t have much luck.
So some officials thought it lucky that the governor’s older brother showed up, preliminary plans in hand. Baldacci had recently been hired by Ocean Properties, a major hotel and resort development company based in New Hampshire. He and former Portland City Councilor and Mayor Peter O’Donnell held private meetings with individual councilors to pitch OP’s proposal in early ’06, if not a bit earlier. [See “Ex-mayor, Gov’s brother push waterfront hotel project.”]
Soon the legal and policy barriers to that proposal began to fall. When he presented his annual budget that spring, City Manager Joe Gray told councilors the effort to find more marine-industrial work wasn’t panning out, so they should consider other options. In September, over the unanimous objection of the planning board and threat of a “people’s veto,” councilors changed the pier’s zoning in ways that would allow the type of development OP was proposing.
A couple months later, the city advertised its request for redevelopment proposals nationwide, and only two companies responded: Ocean Properties and Olympia, the Portland-based firm that built and owns the Hilton Garden Inn across the street from the pier.
There’s no need to revisit the circus that followed, fun as it is to recall all the paranoia and political chicanery at play. We bring this up again to point out that Ocean Properties’ interest in the pier — not the public’s interest, necessarily — has driven and framed the debate over its future for the past two years.
I can’t name names, but I can tell you this. Olympia got the narrow majority of votes needed to continue its bid last December because enough city councilors agreed with us: both developers’ plans are overkill and the city needs to step back and rethink the pier’s future. Olympia’s proposal was just the lesser of two evils.
Good luck getting any councilor to admit that. Most consider it political poison to oppose Olympia’s plan now, and not just because they may have voted for it before. The public’s seen the pretty architectural graphics (the grassy park, the glassy office building, the pier-top “village” lined with CG-trees), and we’ve been promised millions in rent and tax revenue for decades to come, at no cost or risk to the city whatsoever.
In a year when Portland has laid off cops, teachers and firefighters, how do you explain your vote to nix the project to voters?
Reason 5: We can do better
See above. That’s how you explain it.
We — as in, the people of Portland, the pier’s owners — may not be able to do more than what Olympia and OP have put on the table, but we can manage the pier’s future more responsibly and more to our own benefit.
The council has yet to take the time to figure out how the pier fits in with the surrounding waterfront. The first question begging an answer: How does building a megaberth at Ocean Gateway change the pier’s purpose?
After Olympia flaked, the city put the megaberth issue on a separate “track” than the Olympia negotiations. Some councilors hope it can be built before Olympia begins pier construction early next decade. Otherwise, construction will have to be halted during cruise ship season (July through October), significantly delaying the project’s completion. (Assuming the permitting process goes smoothly — and you know what happens when you do that — this delay means we’d collect our first property tax dollar sometime around the middle of next decade. A protracted squabble over even one key approval and we don’t collect a dime for at least 10 years.)
Don’t bet on this “track” being a fast one. The fractious council is basically at square one: asking city administrators for suggestions — again.
During closed-door discussions of the pier deal this year, administrators already suggested that councilors consider selling or leasing more city-owned waterfront property near Ocean Gateway in order to entice a developer to build the megaberth for us. To their credit, councilors decided to have a public process first.
If we don’t need to dock cruise ships at the pier and can’t find a marine-industrial tenant, let’s have a public discussion of the alternatives. You’ve already seen our plan, The Bollard Boardwalk. It’s still on the table, as far as we’re concerned — though we’d ax Baldacci’s, the seafood restaurant and tap room (that part really was a joke).
To refresh your memory: Raze the empty blue shed with the whales painted on it to create an open, walkable public space for residents and visitors to enjoy year-round. Concerts and festivals could continue to be held there. There’d be much more room to fish and dock excursion boats. And other than hot dog carts and hippies selling crystals wrapped in hemp, there’s be no private businesses on public property competing with established merchants.
We figure it’d cost a couple million bucks, tops, and a year or so to finish the job. Wouldn’t even have to interrupt cruise season — just tender ’em on in.
The Bollard Boardwalk has the potential to be a statewide, regional, even national attraction, so why not ask the state or Congress for some funding? If they say no, Portland can bond the repairs and pay down the debt over the next decade — about the same amount of time it’d take to get a nickel of property tax from Olympia.
Let’s not forget: it’s our pier. And it happens to be both the longest one around and the pier with the best harbor views. Some consider it the most valuable piece of property in Maine. A 75-year lease is tantamount to selling it — everyone old enough to understand this terrible deal will be dead before the lease term ends.
Before our children and grandchildren look back and curse our foolishness, it’s time to simply say: Enough.