The Maine Department of Transportation is taking land on West Commercial Street in Portland by eminent domain to expand the International Marine Terminal, allowing it to link with an existing rail line so cargo can be offloaded from ships onto freight trains.

Both the state and the landowner, Phineas Sprague Jr., described the taking as a “friendly acquisition,” but they are still negotiating a fair price for the land.

“We want to give the properly assessed value of the land,” said MDOT spokesman Ted Talbot.

Neither Sprague nor Talbot would discuss the price being offered for the land, because of the negotiations.

The land – the exact acreage of which is unclear – is being taken for a project that would allow longshoremen to unload containers from ships and put them on trains at the marine terminal, increasing speed and efficiency. Containers are currently transported by trucks.

The state would own the rail line between Cassidy Point Drive, near Merrill’s Marine Terminal, and the line’s current terminus at a rail and truck propane terminal near the intersection of West Commercial and Beech streets.

John Henshaw, executive director of the Maine Port Authority, said the state would expand the terminal so it meets with the rail line.

Patrick Arnold, the authority’s director of operations and business development, said the rail line would then be extended by 750 to 800 feet into the expanded terminal. The state is also expanding a staging area where containers are fastened to chassis – a “critical and valuable function” for the port, Arnold said.

In 2012, Sprague bought from Pan Am Railways and Unitil the land now being taken for a new boatyard he’s in the process of building. Then the Icelandic steamship line Eimskip decided last year to make Portland its only port of call in the U.S. and its North American headquarters.

The state had the right of first refusal to purchase the land, but Talbot said the state did not see a need for it until Eimskip came along.

Sprague said he wants Eimskip to succeed in Portland, so he supports the terminal expansion. He traveled to Iceland to assure Eimskip he would cooperate and later altered the design of his boatyard – after it had been approved and permitted by the city – to accommodate the transaction.

However, the state is offering less for the land than what it will cost for him to acquire additional land for his boatyard, Sprague said.

“My only issue is that I get paid fairly for the land they take,” he said. “They’d have to pay Portland rates for the land. And land on the Portland waterfront is expensive.”

The U.S. Constitution requires “just compensation” for taking property by eminent domain. The value is determined through an appraisal process that considers the fair market value of the property being taken and “severance damage,” or loss of value, to the remaining parcel, according to the MDOT’s “Landowner’s Guide to the Acquisition Process.”

According to the Portland Assessor’s Office, Sprague paid about $875,000 for the 15 acres he bought from Pan Am in 2012. No sale price is listed for the seven acres he bought from Unitil, and Sprague would not disclose the price.

Sprague described the negotiations with the state, which have evolved from a commercial real estate transaction to eminent domain, as “an extremely painful experience.”

Talbot said there is no firm deadline to reach an agreement. However, the state would like to put the rail expansion, as well as improvements to West Commercial Street and Beech Street, which is next to the ramp leading onto the Casco Bay Bridge, out to bid in July.

That work would likely entail sidewalk and intersection improvements, including a traffic light, for truck traffic and pedestrians, according to City Hall spokeswoman Jessica Grondin.

Talbot would not disclose how much land is being taken by the state. A public notice of condemnation indicates the state is taking about five acres, plus all rights and interests in the intertidal and submerged lands in the Fore River.

Sprague said the state is increasing the amount of land it’s taking from 4.5 acres to 18 acres.

Eimskip has also expressed an interest in building a cold-storage facility next to the International Marine Terminal, but Talbot said that project is not currently being discussed.

Randy Billings can be contacted at 791-6346 or at:

[email protected]

Twitter: @randybillings