2016-08-04 / News

Saco Island’s Unit 91 discussed at public meeting

By Ben Meiklejohn
Staff Writer

SACO – The fate of Unit 91, property the city acquired Jan. 11 because of a tax lien, was discussed at a city council workshop this week. The property, which makes up 25 percent of the total space of the Island Terrace Owners Association, is occupied by several commercial tenants and includes the platform upon which the pedestrian bridge rests on the Saco side of the Saco River.

“This particular property is in a prime location in the core of our downtown and it has not been developed to the level of its potential. I think the times are right,” said Economic Development Director William Mann at the Monday, Aug. 1 workshop.

The property was conveyed to the condo association by Unit 91 LLC in December of last year in exchange for more than $300,000 in condo and other fees owed to the association by the LLC. Mann said the association was unaware that there were still unpaid taxes on the property, and when a tax lien for more than $11,000 matured on Jan. 11, association leaders informed the city they would be unable to make the payment, and the city acquired it by “operation of law.”

Ward 4 City Councilor Kevin Roche said he was frustrated with the expenses the property was burdening the city with. City Administrator Kevin Sutherland said the city had spent more than $80,000 on the property since acquiring it, including bringing an elevator and staircase up to code.

“We have skipped over liabilities associated with this property,” Roche said. “This happened in January. It should no longer be a surprise … We're just finding out about this right now.”

Roche said expenses for the property hadn't been fac- tored into the new year's budget.

“Is it our plan to continue to pick the contingency fund?” he asked.

Mann said the property is assessed at approximately $700,000, but there were still issues with the heating and outstanding issues with parking. The draft request for proposal submitted by Mann offers access to 40 parking spaces in a parking garage directly underneath the property.

“If we go through the RFP process, we'll recoup losses we've seen, but it also puts us in the ball game. This is a prime opportunity for the right developer,” Sutherland said.

Ward 1 City Councilor David Precourt said he was upset the easements on Saco Island have not been resolved with property owners, referencing negotiations with Saco East developers, when the city acquired that property due to a bank error when the bank had sent payment for an outstanding tax payment that was $112 short. The city ultimately conveyed the property back to Saco East.

“When we were withholding this process and the east side was on the limb, we were supposed to be getting easements cleared up,” Precourt said. “I thought we were going to have that all settled before we released the east side.”

“We got a written agreement to act in good faith, and we're working with them to continue that process … it is what it is,” Mann said.

Sam Zaitlin, who is part of the Saco East development group, as well as the LLC that conveyed Unit 91 to the condo association, said during the hearing, “To put it in a nutshell, there are two key issues outstanding – one is the issue of easements and access, and the other, even more important, is the whole question of parking, and that's an entirely complicated matter.”

Zaitlin said he does not hold the opinion that the city has a right to the 40 spaces of parking associated with Unit 91.

“My understanding was that we were going to resolve all of these issues in good faith. I don't see that good faith yet,” said Mayor Roland Michaud.

“We have a similar complaint,” Zaitlin said. “We had a mistake from the bank for just over $112. What does the city do? It takes the property for $112. Your mistake with Unit 91 was there was no due diligence before you leaped into the abyss and now you're finding out.”

Precourt responded back, “And you want us to look at the people who were left with the debt?” referring to the condo association that was given Unit 91 in lieu of $303,000 it was owed in condo fees, and the property's unpaid tax bill.

“We didn't take the property, we acquired the property under state law. When we became a member of ITOA, we realized there were a lot of issues to resolve,” Sutherland said.

“This affects Unit 3 and Unit 7 because if the city takes parking, then that adversely affects us,” Zaitlin added.

Mann said Unit 91 comes with limited access to 40 parking spaces under the unit.

Roche said he felt too much economic development was being coordinated behind closed doors.

“What kind of ideas are we going to have for Saco East other than for kids to hang out and smoke some stuff?” he said. “When it comes to economic development, why is everything so secret in this town? Why can't we discuss it? We met and discussed not to take Saco East, and what are the discussion about Saco Island? Nothing you can share?”

Sutherland said he would schedule a workshop to discuss all of the developments on Saco Island, including negotiations of easements.

“The most important decision the city can make is who to sell the unit to,” said Island Terrace Owners Association President Paul Culloton after the meeting. “Since 1994, it's been a rollercoaster ride with litigation after litigation … it was a breath of fresh air when the city took it over.”

Return to top