2018-10-05 / Community

Port signs contract for North Street lot

By Duke Harrington Staff Writer

KENNEBUNKPORT — Just one week after voters at a special town meeting authorized spending up to $10 million to buy an 87-acre parcel at 49 North St., selectmen have signed a contract for the property.

In a series of votes at its Sept. 27 meeting, the board signed a purchase and sale agreement for the property. The board also authorized Town Manager Laurie Smith to act on their behalf to close the deal, hired Joe Cuetera of Boston-based Moors & Cabot Investments to act as the town’s bond broker and awarded a bid to Norway Savings Bank. The bank will finance the $10 million purchase until the bond sale can be completed.

“Within a few weeks this will be executed and the land will be ours,” board chairman

Ed Hutchins said, addressing rumors he said have been circulating around town about how selectmen intend to use the property.

“We don’t know where this will take us,” Hutchins said. “What we have now is options, which we did not have last week. But the public will have the chance for input as we go. So, if you hear rumors around town, most likely that’s probably what you’re hearing. We will be discussing this into the months and years. This is not going to be a quick and easy project, no matter what it may turn out to be, especially if we want to do it right.”

“This is, I think, one of our biggest, most important lands ever,” Selectman Allen Daggett said. “I think there will be a lot of good things coming from this.”

“This is going to benefit the town now and going into the future, for our kids and their kids,” Selectman Sheila Matthews-Bull agreed.

More than 160 voters attended the Sept. 19 special town meeting at Village Fire Station, located directly across the street from the lot. That turnout was nearly triple the number of people who generally show up for Kennebunkport’s town meeting in June.

The property has been held since 2006 by Thomas Macone of Stoneham, Massachusetts, who patched together three separate lots he bought for $3.75 million in all, using the corporate name CDMK LLC. That firm was approved in 2009 for an 80-unit housing development, known as Olde Port Village.

Macone’s plan called for three apartment buildings totaling 12 living spaces, along with 34 duplex buildings, all to be built along a winding road connecting North Street to School Street. Also in the plan were a recreation building, a swimming pool and two tennis courts. But instead of moving in the bulldozers, CDMK instead put the full approved subdivision up for auction in 2010.

At the height of the Great Recession, it found no buyers.

Then, last year, Macone reportedly ran into trouble when the mortgage holder, Michael Solimine Jr. of MJS Realty Trust, called the loan. With the site listed as going up for a foreclosure auction, selectmen quickly rallied to what they deemed a “once-in-lifetime deal.”

Given the property’s proximity to Dock Square and the fact that it is considered to be one of the last big, undeveloped lots in town not otherwise locked into a conservation easement, selectmen scheduled a May 2017 special town meeting to ask voters to bond up to $5 million, so the town could get a seat at the June 3 auction.

Macone was able to work things out and the auction never came off. On May 31, 2017, CDMK signed a new mortgage for $2.54 million with Gosder Cherilus of Wakefield, Massachusetts.

Macone then announced plans to begin construction in June 2017, but suffered a heart attack. Because of the health setback, the planning board voted 4-0 at an October meeting that year to grant Macone a special 16-month extension on approvals for construction. Around that time the Maine Department of Environmental Protection also granted a four-year extension on its permits.

Macone, who had already been granted two local extensions in the past, had until Dec. 31 to achieve “substantial completion” for Phase 1 of his Old Port Village development project, to include installation of sewer and water lines, and the laying of roads.

Town Manager Laurie Smith said during the special meeting that after the town missed its chance last year, several townspeople approached her to express support should a second such opportunity ever arise.

And so, a few weeks ago, with CDMK finalizing the infrastructure for Phase I of development preparatory to construction of the actual housing units, and with support from selectmen, Smith met with Macone to broach the topic of a sale.

The agreed-upon price was double the 2017 offer, Smith said, because it was no longer a distressed sale. Back then, she noted, the town had hoped to score a deal at the foreclosure auction, and never did fix a market value on the lot.

“Currently the property is not under auction or any fire sale,” Smith said. “The current owner does not have the property for sale and town staff along with the board of selectmen have examined the costs and associated mortgages committed to the property as well as consulted with professionals to determine our best estimate to current value.”

The bond-anticipatory note with Norway Savings Bank will “most likely” be for one year. The Sept. 20 bid from the bank fixed the interest for that loan at 3.3 percent, meaning an interest cost of $334,583. The full $10.33 million would then be paid off with the proceeds of the bond sale, once arranged by Cuetera.

For his services, Cuetera charges $1.50 per $1,000 of bond issues, plus $5,000, along with $4,800 in other “advisory expenses,” for a total of $24,800.

“I like to think that’s good money well spent,” Cuetera told selectmen. “For a $10 million bond issue, my fee is probably about 0.05 percent of the overall financing. And for that I am going to bring you 20, 30, 40 lower basis points than anyone else could.”

For every 10 basis points he saves the town by issuing a private bond sale, as opposed to going through the Maine Bond Bank, could save the town $100,000 in interest over 10 years, Cuetera said. In addition, the bonds would be callable in 10 years with no penalty.

“Basically, what we do is soup to nuts,” Cuetera said. “In other words, I am the best man at the wedding, or the caterer. You’re the bride and groom. You’re supposed to be the smiles, let me worry about washing the dishes.”

Staff Writer Duke Harrington can be reached at news@kennebunkpost.com.

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