2016-01-15 / Letters

Dam removal already impacts real estate

To the editor:

It is not often that I feel compelled to write to a letter to a newspaper. However, this has changed as a result of some recently published letters indicating that local property values will not decrease with the removal of the three Mousam River dams. For example, in a letter to the editor an author states that “the discussion of property values is fraught with preconceived notions not based upon facts” and concludes that “scientific studies repeatedly show that property values of land adjacent to rivers go up, not down, when dams are removed.”

To support this position, some of these authors have referenced studies published by American Rivers and Trout Unlimited, the University of Wisconsin Madison, Bates College and the Massachusetts Division of Ecological Restoration.

While I respect these authors’ opinions, the reliance on these studies to support that there will be no loss of property values for land adjacent to the Mousam is seriously flawed.

First, the various studies were published from seven to 14 years ago (2009, 2008, 2006, 2002). Referencing outdated studies, based on market data even more outdated, is of little value to the current Mousam River Dams/property value debate.

Second, all real estate markets are unique; so attempting to equate activity in one market to another is not applicable. For example, there is no direct correlation between the Augusta/Waterville real estate market in 2008 (Bates College study) and the 2015 Kennebunk real estate market.

Third, not all river environments are the same in physical attributes, water quality, current amenities, etc. Historically, Mousam River property owners have paid a premium to live near the river, with its healthy and vibrant environment, easy access and views. Quite the opposite was true for Kennebec River properties.

The Bates study clearly stated that “location in proximity to environmental disamenities such as dirty rivers, landfills, etc., reduce property values. People are willing to pay more to be further away from the negative.”

Fourth, not all dams are created equal. The basis of the Bates College study was the analysis of property values before and after the removal of the Edwards Dam on the Kennebec River. This dam was 917 feet wide (24 feet high). In comparison, the Kesslen Dam is 128 feet wide; the Twin Mill Dam is 196 feet wide; and the Dane Perkins Dam is 133 feet wide. No comparison.

So let’s move away from this one-sizefits-all approach and look at several recent Kennebunk- specific actual events:

 The loss of a potential sale of a Kennebunk property near the Mousam River. The buyer forfeited the security deposit and walked away from the sale due to the drastic alteration of the river at the draw-down (which exactly matched the projected condition of the river in the recently published Wright-Pierce River Modeling Results Chart ).

 When a Kennebunk real estate broker disclosed the topic of the KLPD Dam Alternative Study as part of a disclosure requirement, potential buyers were no longer interested in even looking at Mousam River properties.

 A local bank had an appraisal performed for a property on the Mousam River near the center of town, for an equity line of credit loan.

The appraisal reflected a drastic reduction in value from an appraisal performed less than a year prior (same local lender, same qualifications, an appraiser sent from New Hampshire for the second appraisal) The stated reason for this devaluation was that the river was no longer viewed as an asset and that the property would eventually require expensive flood insurance and additional liability insurance, which would permanently attach to any future resale.

While the initial appraisal reflected a $10,000 increase in the value of the property (loan approved), the second appraisal, minus the riverfront premium, decreased the property value overall by $40,000. The loan was denied.

When FEMA redrew floodplain maps several years ago for areas along the Mousam, it utilized data collected for more than a century. Many riverfront properties were facing huge spikes in insurance costs. Property owners applied for and received an exemption that is currently in place. If dams are removed and the Mousam is permanently altered, this data no longer applies.

Question: Will FEMA initiate new floodplain analysis, and what would be the financial impact to property owners and municipalities for additional flood/ liability insurance if the river is drastically altered by removal of all three dams?

In conclusion, the negative impact of even the potential removal of the dams is already occurring in the Kennebunk real estate market, with the deadline for the final decision still over a year away. Property value losses; reductions in sales; restrictive policies/requirements at lending institutions and insurance companies are real.

Any further reduction in our property values will result in lost tax revenue to the town that will be offset by increased property taxes for all Kennebunk property owners.

Chauncey Copeland

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