The mezzanine in front of Unit 91, as seen in this June file photo.LIZ GOTTHELF/Journal Tribune
In January 2016, the city acquired a portion of a former mill building on Saco Island from the Island Terrace Owner’s Association due to unpaid taxes. The piece of real estate, known as Unit 91, is a 30,000-square-foot commercial property that comprises about 25 percent of the Island Terrace Association property, which is otherwise composed of residential condominiums.
The Island Terrace Owner’s Association acquired the property in 2015 from its former owner in lieu of delinquent association fees, but was not interested in managing the commercial property.
Bob Keegan, representing Island Terrace Owners Association, spoke at the public session at Monday’s City Council meeting and said the city stopped paying its association fees in July.
Keegan said the association is a nonprofit, and losing 25 percent of its condo fees means the association has lost 25 percent of its funding.
“The budget pays the bills. There’s no money for anything else,” he said.
Keegan said the board was asking the City Council to put the matter on a meeting agenda. He said the board is also paying the electricity for the unit.
“The association is in a tough spot,” Keegan said. He said the association understands the city was forced to become the owner of the property, and has had to work through some unique property issues. He said the association wants to work with city, but if the city continues to not pay the dues, it will have to foreclose against the city.
City Administrator Kevin Sutherland in a phone interview on Thursday confirmed the city had stopped paying the nearly $5,800 association fees when the fiscal year began in July. He said there is no money in the city’s budget right now for the association fees, and his intention was to pay the association after it sells the property.
The matter will be discussed at a City Council workshop on Monday, and Sutherland said if it is the wish of the Council for the city to begin payments to the association to catch up on what it owes, the city will do so.
The city has spent considerable funds since acquiring the property on repairs and maintenance as well as surveys to address questions of property ownership.
Sutherland said over the years, pieces of the former mill complex on Saco Island were sold off to different entities, resulting in many unclear property matters.
“A lot of things fell through the cracks over time,” said Sutherland.
The city, which would like to sell Unit 91, sought proposals for the property last year, and though there were parties interested, there was concern from potential buyers regarding right of way issues for a mezzanine owned by abutter Saco Island West that must be crossed to get into the Unit 91 property.
Saco Island West and the city recently came to an agreement through which Saco Island West gave the city an easement over the mezzanine at no charge.
“The development of Saco Island has always been marked by complex questions of ownership, murky rights of way, easements, and so on,” said Sam Zaitlin, director of development for abutter Saco Island West in a written statement. “Mr. Sutherland and council members, particularly our ward councilor Nathan Johnston, have been instrumental in breaking this logjam and thus advancing development of the entire island. That effort has produced a lot of progress on several issues in the last few months.”
Sutherland said Saco Island West must make some improvements to the mezzanine as a condition of approval for micro apartments it wants to develop on another building on Saco Island.
Sutherland said now that the mezzanine easement issue has been resolved the city is going to contact five entities that had expressed interest in purchasing the property. He said he believes the city will be able to sell the property and recoup the money it has invested in the property as well as the money it owes the condo association. He said the property is an attractive piece of real estate as the upswing of development in the area continues.
“That property has a lot of value to the community,” Sutherland said.
— Staff Writer Liz Gotthelf can be contacted at 282-1535, ext. 325 or egotthelf@journaltribune.com.
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