Olympia pier deal dead
Submerged land ownership dispute sinks talks
By Chris Busby
The Olympia Companies’ bid to redevelop the Maine State Pier is over.
The Portland City Council’s Community Development Committee voted unanimously tonight to recommend that the full Council terminate negotiations with the developer, a move the Council is certain to endorse, either at its meeting next Monday or when the new Council is seated next month.
Attorney Jamie Broder, who was retained by the city for the negotiations, said nearly all the details of a master development agreement were agreed upon. The sticking point that sunk the deal was the city’s position that Olympia begin “due diligence” work on the pier — assessing traffic, infrastructure and other pre-construction issues — upon execution of the master development agreement this year. Olympia had countered that it was unwilling to undertake that work until the question of whether the city or the state owns the submerged land beneath the pier is resolved. That could take a year or longer, Broder said.
The due diligence work was expected to cost about $500,000. A deposit of $150,000 would also have been required.
Maine Attorney General Steve Rowe recently sent a letter to city officials reiterating the state’s belief that it owns the submerged land. According to state law, the city would thus only be able to lease the pier property for 30 years. Olympia has said it needs a 75-year lease to secure financing for the project.
The city obtained title insurance for the property, but that was not enough to satisfy the developer’s concerns. Olympia spokesman Sasha Cook expressed disappointment, but had little else to say about the impasse.
City officials are holding a news conference at City Hall tomorrow morning to discuss the deal’s demise. Most declined comment until then.
Councilor Nick Mavodones said the new Council will discuss how the city should proceed. Options range from negotiating with Ocean Properties — the politically connected, New Hampshire-based company that lost its bid for the pier to Olympia — to starting the pier redevelopment process over again, with a new request for development proposals or qualifications.
The new majority on the Council is comprised of Democrats who favored Ocean Properties’ pier proposal over Olympia’s. They include newly appointed Mayor Jill Duson, Mavodones, Councilor Dan Skolnik, and Councilors-elect Dory Waxman and John Coyne. Given the ongoing turmoil and downturn in financial markets and other economic strife, it’s quite possible that majority will push to begin talks with Ocean Properties. OP had said it could finance its $100 million project itself and would not be stymied by a 30-year-lease limit.
Waxman will certainly face pressure from Council colleagues in the minority faction and observers outside City Hall to recuse herself from any vote involving Ocean Properties, which is believed to be still interested in redeveloping the pier. Waxman previously worked for the developer as a “community liason” promoting OP’s pier plan, and both the company and supporters of its proposal contributed heavily to her campaign.
However, even if Waxman stepped aside, there may still be five votes on the Council to begin talks with OP. The political pressure to get a huge development deal started during these tough times could persuade councilors who previously opposed OP’s plan to pursue it anyway.