2016-07-28 / Front Page

Saco Isle. property under scrutiny

By Ben Meiklejohn
Staff Writer


Unit 91, part of the Island Terrace Owners Association, was foreclosed on by the city of Saco on Jan. 11 due to unpaid property taxes. The mezzanine property, which the Saco River pedestrian bridge connects to on the Saco side, is home to several commercial vendors that lease space there. City Planner Bob Hamblen estimates the city has spent $70,000 since owning the property. (Ben Meiklejohn photo) Unit 91, part of the Island Terrace Owners Association, was foreclosed on by the city of Saco on Jan. 11 due to unpaid property taxes. The mezzanine property, which the Saco River pedestrian bridge connects to on the Saco side, is home to several commercial vendors that lease space there. City Planner Bob Hamblen estimates the city has spent $70,000 since owning the property. (Ben Meiklejohn photo) SACO – After nearly 40 minutes of deliberation about whether the city should sell Unit 91, a tax-acquired property on Saco Island, the planning board tabled a motion to make a recommendation to the city council after it was revealed that notice of a public hearing on the matter may not have been adequately posted as required.

The planning board met on Tuesday, July 19 at 5 p.m., but the board’s agenda was not posted on the city website until just before noon that same say. An owner of abutting property, Sam Zaitlin, said he also did not receive notice of the board meeting.

According to the statute on public notice of meetings, notice “shall be given in ample time to allow public attendance and shall be disseminated in a manner reasonably calculated to notify the general public in the jurisdiction served by the body or agency concerned.”

“There clearly wasn’t adequate time for a member of the public to be notified,” Zaitlin said.

The property, which includes approximately 30,000 square feet of space and is part of the Island Terrace Owners Association, was seized by the city on Jan. 11 due to unpaid property taxes. The property is above parking on Saco Island and is where the pedestrian bridge over the Saco River lands on the Saco side.

“The tax lien was left unpaid. It’s not an unusual situation. Just about yearly, the city comes into ownership of two or three properties due to unpaid property taxes,” said City Planner Bob Hamblen.

“In the past month, as part of the process of what the city should do with the property, the possibility of residential units has come up but no decisions have been made,” Hamblen said.

The property includes leases to several commercial vendors that were already occupying space before the city acquired the property. Dirigo Property Management, which managed the property before the city acquired it, has continued to manage the collection of rents.

Hamblen said the city is spending approximately $7,000 a month on the property and only collecting about $4,000 in rent. The city has also had to spend money repairing and maintaining the property, including fixing an elevator to bring the property up to code. Hamblen estimated the city has spent $70,000 since the property was acquired.

“(City Administrator) Kevin Sutherland has directed (Economic Development Director William Mann), ‘Let’s move this thing,’” Hamblen said. “This is an anchor. In another situation, it might be fine, but given the circumstances, it could be expensive.”

Hamblen said the intention was for the city council to vote on the item at its Aug. 1 meeting.

Hamblen said when he asked all the department heads for input on what to do with the property, only one person responded – Finance Director Cheryl Fournier.

“She gave me a flip reply, said something to the effect of, ‘It’s a money pit, move it,’ or, ‘Get out from under it, it’s a losing proposition.’”

The property had formerly been owned by Saco Island West, but Zaitlin, who is part of the development group, said the group had given the property to the condo association in December of last year, one month before the city claimed it for unpaid taxes. Unit 91 comprises approximately 25 percent of the Island Terrace Owners Association’s total property.

On Feb. 29, Karen Goodwin, property manager for Dirigo Property Management, sent a letter to the leasees of Unit 91, informing them that the city was their new landlord.

“In other words, your current lease is no longer in effect and has been voided by the city’s foreclosure,” Goodwin wrote. “The city is certainly willing to negotiate a continuation of your occupancy on the same, or very similar, financial terms … It is the city’s intention – to the extent possible – to afford you the same rental rates, although the occupancy terms may require consideration if the rental rates are disparate and non-market.”

Zaitlin said although the city acquired the unit from Island Terrace Owners Association, the unit is still part of the overall condo association and the city is therefore a member of the association and should be paying the association the nearly $6,000 a month in condo association fees that is attached with the property. Zaitlin said Saco Island West also provides the heating and coolant services for the property, for which the city also owes approximately $10,000.

“We should put a lien on the city’s property for outstanding fees,” Zaitlin said.

At the meeting, Zaitlin said he was concerned with the draft RFP for the property, which claims that a future owner of the property would have access to parking.

“The most important issues are legal issues that essentially have to do with (City Attorney) Tim Murphy’s letter to the city manager in the very end of March,” Zaitlin said. “In that letter, he clarifies what is very complicated title information. In that summation, Tim makes a couple of assertions we don’t agree with and that has to do with public access and parking lots.

“If the city continues to assert what we take to be Tim’s intent, we would clearly take the city to court because it would impede our ability (to develop) in breach of what’s been agreed so far. That’s what is comes down to … If Tim’s interpretation is correct, then our development plans in Building 3 and Building 7 would be adversely affected.”

In the March 29 letter from Murphy to Sutherland, which Zaitlin referenced, Murphy wrote, “The absence of express easements should not be seen or interpreted to mean rights do not exist. In large parts, rights by necessity exist. An additional argument are (sic) that rights of prescriptive use have been established now over time. So, on balance, I do not see denial of access as a significant legal threat even in the absence of expressly written easements, at least as regards more general day to day public use.”

“If that were true,” Zaitlin said, “then the city could claim rights to the parking lot of Shaw’s. ‘Well, the public has been using it for so long that it’s the city’s now.’”

The planning board voted unanimously to table the item until sufficient public notice has been posted.

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