An investigation into the controversial sale of a city-owned office building in Bath found no evidence of corruption but did identify a number of “honest, human mistakes” by city officials that needlessly kept residents in the dark, according to a report issued Friday.

Those mistakes included a violation of the Freedom of Access Act that occurred in April, when the Bath City Council voted informally during a budget meeting to list for sale the MidCoast Center for Higher Education at a price of about $800,000, said the 30-page report, by retired Maine Superior Court Justice Robert Crowley.

No advance public notice was given about the vote, as is required by state law, Crowley’s report said.

“There is no question that the City Manager failed to provide public notice that the April 8, 2013, budget meeting would involve a discussion of real estate matters in general or (MidCoast Center) in particular,” the report said. “Though no members of the public attended that meeting, it is possible that the public would have attended had proper notice been given.”

Crowley found that city officials also failed to properly notify residents about two closed, executive sessions in January and February 2013 to discuss a possible sale of the building.

The executive sessions were legal, his report said, but the council should have been specific in saying they were being conducted to discuss the proposed MidCoast Center sale.

“Unnecessarily shrouding these two executive sessions in secrecy served to later fuel the public’s concerns of impropriety,” it said.

The council hired Crowley in October for up to $7,500 to conduct an independent investigation into the building’s sale after a handful of city residents, including former prospective buyer Larry Scott, complained that the sale process had been unfair and improper. Crowley reviewed all related documents, communication and meetings, and he interviewed city staff, all nine councilors, Scott and other critics of the sale.

Bath officials sold the office building, valued at $6.5 million by the city assessor’s office, for $799,000 in April after receiving an offer from a Phippsburg-based developer, Robert Smith. The property was neither appraised nor listed for sale publicly to generate competing bids.

Bath residents including Scott and retired attorney Michael Wischkaemper have said since April that the property was worth at least $1 million.

City officials have said that MidCoast Center’s tenants had been leaving one by one for a newer office development at the former Brunswick Naval Air Station, and that they were under financial pressure to sell the building quickly.

Since April, Smith also has decided to sell the property. His real estate broker, Edward Herczeg of KW Commercial, listed MidCoast Center for sale on Maine’s multiple listing service in October for $1.65 million.

So far, it has not sold at that price. Still, Scott has said the much higher list price is a sign Bath residents did not get what they deserved for the property.

Neither Smith nor Herczeg agreed to speak with Crowley during his three-month investigation, the report said. Crowley did not have legal authority to compel their testimony.

In his report, Crowley said it is impossible to know whether Bath officials would have gotten a higher price for the building had they listed it for sale on the state’s multiple listing service, where most real estate investors and brokers look for properties.

Crowley said he was unable to determine how Smith had discovered MidCoast Center was for sale, but he said it is possible one of the building’s tenants had told him. In exchange for Smith’s offer of $799,000, city officials agreed to keep the sale a secret until after a City Council vote on the sale to Smith.

The council voted unanimously to sell the building to Smith without any prior public discussion. That was a poor decision, Crowley’s report said.

“Disappointingly, the Council never undertook any real deliberations or discussions in executive session or otherwise regarding the valuation of (MidCoast Center), the advisability of the suggested listing price … or the propriety of withholding the listing from the (multiple listing service), despite their clear obligation to do so pursuant to the Municipal Code,” it said.

Things got even worse when the council held a July 24 public comment session about the sale but refused to answer any of the public’s questions, the report said. “This conduct was the antithesis of the free flow of information envisioned by (the Freedom of Access Act) and served absolutely no purpose other than to infuriate the public,” it said.

Crowley’s report also indicated that a series of emailed questions by Wischkaemper went ignored by city officials because they felt intimidated or threatened by his demeanor. It added that Scott and Wischkaemper were needlessly confrontational at times with city officials.

“When Councilor (Carolyn) Lockwood emailed (City Manager Bill) Giroux and Council Chair (Bernard) Wyman asking whether there was a ‘standard answer’ to the questions, Wyman picked up the telephone and advised, ‘Don’t answer those guys,’ ” it said.

Wyman said late Friday that he was withholding comment on the report until he could have time to review it more carefully.

Lockwood said the report gave a fair assessment of what went wrong, including the council’s mistakes.

“I know we’ve learned quite a bit from it,” she said. “I don’t think that’s going to happen again like it did.”

Wischkaemper did not respond to phone and email messages late Friday, but Scott said the report shows that Bath city staff and elected officials need to be better trained at their jobs.

“You have a group of individuals who really don’t know what they are doing,” he said.

Scott agreed that city leaders did not appear to be acting out of corruption, but he said that makes some of their actions even more perplexing.

“I’d almost rather see corruption than stupidity,” he said.

J. Craig Anderson can be contacted at 207-791-6390 or:

[email protected]

Twitter: @jcraiganderson

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