The city is holding up the sale of the old police station to the Children’s Theater of Maine because of the owners’ failure to fulfill a contract obligating them to convert it into a commercial property.

Paul Gore and Joe Mazzone, who purchased the building from the city last year, have reached an agreement with the Children’s Theater and have approached the city seeking to alter the deal they made at the time they purchased the building. Gore confirmed on Monday that the building was under contract to the Children’s Theater but declined to disclose the purchase price.

Gore and Mazzone bought the building from the city for $450,000, which was $100,000 below the established value of the building, with the stipulation that they invest an additional $250,000 in the building or add at least 5,000 square feet of new construction in the next three years. If those conditions were not met, Gore and Mazzone agreed to pay the city an additional $100,000.

In addition, Gore and Mazzone told the city they planned to move their Port City Graphics business to part of the property while using the rest as a small business “incubator,” renting space to small start-up businesses.

The city maintains that the building was sold to Gore and Mazzone on that premise, and are seeking to hold them to the terms of their original deal.

Gore said he planned to go forward with the original proposal until he and Mazzone received a significant offer for the building shortly after closing on the sale. Since there were three years left on Port City Graphic’s lease at the Dana Warp Mill, he said the offer “shifted their thinking,” and led them to market the building even after the first proposed sale fell through.

“We realized if there was an offer like that maybe it was more valuable to someone else,” he said.

In addition, Gore said it became clear that since the space was not large enough for all of Port City’s operations, it would be difficult to operate out of two locations. He added that he and Mazzone decided to move away from the small business incubator concept because they did not have time to market the concept while still running their business.

When the issue came before the City Council on July 11, a motion by Councilor Ann Peoples for the city to accept a $100,000 payment in exchange for releasing Gore and Mazzone from the terms of the agreement was not seconded. After that motion failed, the council voted, 4-1, to go into closed session to discuss the issue.

Councilor Gary Groves cast the sole vote against going into closed session. No action was taken after the closed session, and the issue was tabled and is on the agenda for the next council meeting on Aug. 1.

In a July 19 letter from City Administrator Jerre Bryant to Gore and Mazzone obtained by the American Journal, Bryant said the initial $100,000 offered by Gore and Mazzone to void their deal with the city was not sufficient.

“While your suggested $100,000 payment might cover a portion of the discounted sale price, it falls far short of the future tax revenue the city anticipated from the property as a private, small business incubator facility,” said Bryant. “A conservative analysis of the property tax income the city would derive from such a facility, based on its current assessed value and the minimum investment of $250,000 in the property within four years, yields an additional $180,000 in just the next 10 years.”

Bryant concluded the letter by saying that Gore and Mazzone must either continue with their original plan for the building, or seek another commercial use for the property.

“I have reviewed the concept with the city solicitor who feels you are prohibited from utilizing the property for a use other than that which you proposed in your purchase offer to the city, either by sale or lease,” said Bryant. “It is my recommendation that you either proceed with your proposed development of the property as a small business incubator, or explore other potential uses that are more consistent with that proposed use that might be more acceptable to the city.”

Bryant was out of the office on vacation this week and unavailable for comment on the letter.

Gore said he believes the proposed sale of the building to the Children’s Theater would be a good one for the city. He added that he and Mazzone have increased their offer to the city, and will be discussing the new proposal with Bryant when he returns to the office on Aug. 1. Gore declined to discuss the specifics of the offer, except to say it was larger than their initial one.

“Hopefully, we think we’ve come up with a solution that will work for everybody,” Gore said. “It’s an attempt to get everybody to a mutually acceptable decision.”

City Councilor John O’Hara, who voted against the sale of the building last year, said he was unwilling to release Gore and Mazzone from their obligation. “The city did not force them to sign that agreement,” he said. “They were willing partners in that agreement.”

While he has no issues with the Children’s Theater of Maine wanting to come to Westbrook, Mayor Bruce Chuluda said he also feels the city would be better served if the building were used as a commercial property. “My concerns really rest with the fact that their proposed sale is not in keeping with the agreement they made,” Chuluda said. “This is not in keeping with the spirit of what these folks sold the City Council and more importantly the residents of Westbrook.”

O’Hara bluntly expressed the same sentiments as Chuluda. “These people came in and promised us nirvana and gave us nothing,” he said.

Gore said he believed the Children’s Theater would be a great benefit to the city. He said the non-profit company was planning to make a significant investment toward improving the property. “I think it would be well received by the people of Westbrook,” he said.

Regina Nappi, president of the board of directors of the Children’s Theater of Maine, said if the group would move all of its operations from Portland to Westbrook.

Plans call for a smaller theater to be built in the old rescue building adjacent to the main building, Nappi said. The old police station would be used for a larger theater space, as well as for office and classroom space. She said long-term plans call for a new building to be constructed on the site, housing a 150-to-200 seat theater. “We’re very excited about the building,” Nappi said.

While he wants to see Gore and Mazzone held to the terms of their original deal, O’Hara did acknowledge that the Children’s Theater of Maine would be a benefit to Westbrook, bringing people to the downtown. “The Children’s Theater of Maine is a very fine institution,” he said.

Nappi said the Children’s Theater of Maine, founded in 1924, is the oldest kids theater program in the country, and it serves about 25,000 kids per year through its various camps and programs.

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