GREAT DIAMOND ISLAND — Before fire gutted the Inn at Diamond Cove early Saturday, workers were putting finishing touches on the restored Army barracks in anticipation of an inspection for a certificate of occupancy, the hotel’s owner said Monday.

Crews of close to 100 workers had been ferried out to Great Diamond Island each day, laying carpet, painting and installing trim and molding in anticipation of the inspection Dec. 19, said David Bateman. The 44-unit seasonal hotel, where the restoration started in February, was supposed to open for business in late May.

“This is absolutely devastating for the crew that’s been out there working,” Bateman said of the destruction, which Portland officials estimated at $5 million to $9 million.

On Monday, state investigators assisted by members of the federal Bureau of Alcohol, Tobacco, Firearms and Explosives and the Portland Fire Department interviewed more than 60 people at the Ocean Gateway terminal in an effort to pinpoint the cause of the blaze, which was visible for miles and first seen by a Casco Bay Bridge tender at 4:25 a.m.

Portland Fire Chief Jerome LaMoria said it could be days or even weeks before investigators determine the cause because of the size of the structure, the extent of the damage and the number of people to interview.

With so many witnesses and workers, the first round of interviews is to determine who might know something of importance and warrant a second interview, said state Fire Marshal Joseph Thomas.

KEY PROJECT IN HISTORIC AREA

Late Monday, rolls of brand new carpet, ready for installation, lay on the porch of the 100-year-old barracks, now a brick husk holding a jumble of burnt timbers and twisted metal – the entire roof gone.

Yellow police tape encircled the structure, which consists of a main building and two wings. The remains of a rear foyer overlooked a large swimming pool under construction.

Bateman, the owner and developer, said 65 workers were going out on a ferry Saturday morning and had to turn back because of the fire.

He said he and his partners, who formed an investment group that also owns the Portland Harbor Hotel, will meet to decide their next step. He said the project had ample insurance.

The group has a consultant resubmitting documentation to the National Park Service to determine whether salvage work on the site would still be eligible for historic preservation tax credits. Bateman said he met with structural engineers and an insurance company representative Monday to devise a way to stabilize the building.

“Make no mistake. This is an extremely important project for the community,” he said.

Bateman said the hotel would give the public access to one of the largest historic districts in the state, covering 193 acres, with 30,000 square feet of building area on the National Register of Historic Places.

The former barracks and a nearby hospital building stand in the heart of Diamond Cove, near the central parade ground of the former Fort McKinley. The Army installation operated on the northern end of the Casco Bay island from about 1900 through World War II. Officers’ quarters and accessory buildings have been converted into condominiums.

Bateman said he has been involved in historic renovation at Diamond Cove for 20 years.

SOME OPPOSITION TO THE HOTEL

The city owned the barracks and the hospital building after seizing them from a previous owner for back taxes. Officials tried for years to get someone to redevelop the dilapidated structures, but developers were reluctant to take on the project. City officials pushed for the hotel plan and a zoning change to allow it.

The project was controversial, as some island residents adamantly opposed a hotel in what they considered their residential neighborhood. They sued to stop it before the litigation was resolved about a year and a half ago, allowing the project to go forward, Bateman said.

Asked whether he thought the project angered anyone so much that they started the fire intentionally, Bateman said, “I couldn’t comment on that. You would like to think it wouldn’t.”

Investigators have not suggested that the fire is suspicious.

Thomas, the fire marshal, said the presence of so many workers raises the number of potential ignition sources, such as tools and heaters.

Bateman said the workers were not using space heaters inside the building because its heat pumps were operating. He said all heating sources were outside the building.

At 10 p.m. Friday, a security worker walked the grounds of the private complex and saw nothing unusual at the hotel site.

UNABLE TO SAVE BURNING BUILDING

Only about 20 year-round residents live on Great Diamond Island, a primarily seasonal community that is part of Portland.

Bill Finney, a year-round resident who has been on the island for about 10 years, said he was looking forward to the completion of the hotel. He said his wife got photographic updates of the progress as a member of the Island Coalition Group.

“They were doing a really nice job,” he said. “It’s really unfortunate.”

His wife also is a member of the island’s volunteer fire crew. She was roused early Saturday by a neighbor, who had been alerted by a firefighter on Long Island. He went to the fire, which had been burning for some time when he arrived.

Firefighters couldn’t even attempt to save the building but instead focused their efforts on keeping nearby buildings from catching fire, said LaMoria, the fire chief.

Portland sent about 20 firefighters aboard the city’s main fireboat, the City of Portland IV, and its smaller fireboat, the Cavalarro. The water cannon on the City of Portland IV could not the reach fire because the building is not on the shore.

Firefighters used two fire trucks stationed on Great Diamond Island. There also is a hydrant system, which was expanded in anticipation of the hotel project.

The fire was under control by 10 a.m. Firefighters continued to put out hot spots until Saturday afternoon.

Because the hotel was still under construction, it did not have a working sprinkler system.

Deputy Fire Chief Robert Stewart said the fire was seen early Saturday morning from far away.

“It looked like the sun was rising from the wrong direction,” he said. “It gave off quite a glow.”

David Hench can be contacted at 791-6327 or at:dhench@pressherald.com