WESTBROOK – The clock is ticking toward the foreclosure sale of the 65 acres earmarked for a giant retail project in Westbrook, even as the local developer works to stave off the sale and save the project.

Earlier this month, the Maine Supreme Judicial Court rejected an appeal by 500 Westbrook LLC, which had asked the court to reverse the foreclosure judgment handed down last year by the Cumberland County Superior Court.

The Dec. 6 decision in favor of Kimco Capital Corp., of New Hyde Park, N.Y., means that 500 Westbrook LLC, which is owned by Westbrook developer Jason Snyder, must repay $1.9 million in mortgage debt and interest by March 6 or Kimco has the ability to sell the property, located between Stroudwater Street and the Westbrook Arterial, at a foreclosure auction. Kimco’s attorney, Michael Nelson of Jensen, Baird, Gardner and Henry of Portland, did not return calls seeking comment by the American Journal’s deadline Wednesday.

Snyder said last week he has been working “literally day and night for the past year and a half” on the project, and he will be working right up until the deadline to try and find financing to repay Kimco and stop the foreclosure sale.

However, Snyder said that the contract zone for the property, which was approved by the City Council in December 2008, is stopping many potential lenders from investing in the project. Snyder said the requirements of the contract zone are too strict and lenders have told him that a project under the restrictions of this contract zone is not feasible in today’s economy.

Snyder, the owner of both the land and the holding company, 500 Westbrook LLC, filed for federal bankruptcy protection last fall, amid lawsuits from creditors and the estate of his late business partner.

With much fanfare, Snyder announced his plans to build Stroudwater Place in February 2008, which he described as a $300 million, 1.65 million-square-foot, upscale retail and recreational development project. Chief among his backers was high-profile partner Arthur Emil of New York, known for, among other things, owning Windows on the World restaurant at the top of the World Trade Center in New York.

But Emil’s death in August 2010 put a damper on the plans, and Emil’s estate has filed a separate lawsuit attempting to dissolve its partnership with Snyder altogether. While that lawsuit has not been settled, Snyder said, the action has been put on hold.

“We’re working together to figure out a global solution to the problem,” Snyder said. “So all of that litigation business has been put aside for the time being.”

The main problem facing Snyder is the looming foreclosure sale, which would effectively kill his dreams for the project. Snyder, who said he has invested thousands of hours working on the project over the years, said Stroudwater Place is more than just a business deal for him. He said he has a great sentimental attachment to the property.

“It happens to be the property that is on my birth certificate,” he said. “I was born on the property, it’s obviously sentimental. I’m fighting as hard as I can to try and save the day.”

What is standing in his way, Snyder said, are the restrictions put forth in the contract zone for the property.

“The problem is the contract zone itself,” he said. “(The contract zone) requires very high standards.

“Any people who have looked at the contract zone, have been essentially scared away from it,” he said. “That’s because of the nature of the requirements. They (lenders) said that the requirements of the contract zone are too restrictive and because of the general economy, a developer can’t build to that level of quality that the contract zone requires.

“This has been the major reasoning that I haven’t been able to get financing yet,” Snyder continued. “But I’m still working on it and I’m going to continue to work on it up until the very end.”

According to the contract zone requirements approved by the City Council in 2008, the property can be developed in phases, but there are requirements for each phase. The first requirement is that an outdoor farmers market area and a public transportation facility be built at the site within two years of the first 100,000 square feet of commercial space. The second requirement calls for a “central common/outdoor gathering space” before the development reaches 800,000 square feet of occupied commercial space. Then, before the development passes the 1.2 million-square-foot mark, the developer must build “an indoor ice skating facility, arena or similar civic facility” at the site, or provide money to help the city build and operate a similar facility elsewhere in the city.

City Planner Molly Just said Wednesday a contract zone, such as the one approved for Stroudwater Place, is a way for the city and a developer to work to create a specific zoning district, “but there has to be a public benefit,” she said.

The amenities such as the farmers market, the transportation facility and the ice rink/arena would be considered the public benefits in the case of this project, Just said.

At the time the contract zone was approved, Snyder said, all of those public amenities were initially in the plans.

“When we were going through the planning process, these are all things that we wanted to do because we wanted to provide something wonderful for the (local) economy,” he said. “Quite frankly, we sought to do the highest quality development in the state of Maine. It would be a centerpiece for the community.”

Snyder said that the prospective lenders that he has talked to have told him to approach the city and try to get the contract zone change, but he said he hasn’t done that yet.

“If I did that (try and get the zone changed), I would want to have Kimco on board with that,” he said. “Given where we are in the process, that has not happened.”

But, Snyder added, he wouldn’t rule out approaching the city to change the zoning of the property.

“It’s a possibility, it’s a very likely possibility down the road that we would approach the city for a rezone,” he said.

If Snyder were to come back to have the property rezoned, Just said, he would have to first notify the city planning office. After that, the new contract zone proposal would have to go back before the Recreation and Conservation Committee, which, Just said, reviews all contract zone and subdivision proposals and makes recommendations to the Planning Board.

After the Recreation and Conservation Committee made its recommendation, Just said, the Planning Board would have to hold a public hearing on the matter before making its recommendations to the City Council, which would hold its own public hearings before voting to approve the changes to the contract zone.

Additionally, Just said, “the Planning Board must approve an overall master plan for the property, concurrently with the first site plan for the first building(s). The Planning Board must still approve each building/portion of the development. The contract zone only enables the landowner to seek approvals for development that meets the standards of the contract zone.”

Just said that 500 Westbrook LLC has not presented an overall master plan for the property to the Planning Board.

But before any of that can happen, Snyder must find an investor or investors to step in and save the property from auction. He said he wants to continue to work with Kimco to try and find a solution and that he wants everyone involved with the project “to walk away with something.”

“I want to do right by them and do the best that I can to get something in place,” he said. “I am working feverishly to get this done.”

Bill Baker, Westbrook’s assistant city administrator for business and community relations, said that Snyder has nothing pending with the city in regards to the project at this time.

“If he can salvage his proposal and make it go forward, it has great potential benefits for the city,” he said.

With a foreclosure sale looming, Jason Snyder says Stroudwater Place’s contract zone is too restrictive.
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