Balancing Act
Oct 1, 2007 12:00 PM, By Elaine Misonzhnik
The life and culture in Portland, Maine, has always revolved around the sea.
The city's history goes back nearly 400 years, when it was founded as a small fishing hamlet. Through the years, its economy flourished due to the famed lobsters and other seafood pulled from the ocean. Ships radiated from its port, bringing the daily catch down the Eastern Seaboard. And even though the days of Portland living and dying by whether the season produced a good catch or not are over — its economy today is more reliant on its place as a regional financial hub — its residents remain fiercely invested in what plays out on their waterfront.
So it should be no surprise that a proposed plan to redevelop the historic, but dilapidated, Maine State Pier has ground to a halt and been mired in controversy. The saga started in 2001, when city officials convinced the state to transfer the property into their hands. At first, the city wanted to find users for the seven-acre site in its existing maritime industrial form. After several years passed with no takers, Portland decided to redevelop the property, but postponed the project in favor of other planning initiatives.
Finally, in October 2006, realizing that the pier was crumbling and the city lacked funds to redevelop the facility with city money, Portland turned to the private sector. It issued a request for proposals and ended up with two bids — one from Portsmouth, N.H.-based Ocean Properties, Ltd., the other from Portland-based Olympia Companies — to breathe new life into the site. Both firms proposed projects mixing office, hotel and retail uses. Each of the projects promises to generate more than $20 million in new real estate tax revenues for the city, in addition to revitalizing a valuable, but underused, piece of real estate.
You would think Portland's 64,000 residents would be happy.
You would be wrong.
Concerns run the gamut. Residents feel like they've been left out of the process, or worse, that corruption and cronyism are at work. Some have complained about the transfer of public property into private hands. Others have pointed out that the proposals put out by Ocean Properties and Olympia Companies are too similar — and not imaginative enough. The most serious objections, however, concern charges that government officials, including Portland Mayor Nicholas Mavodones, struck a secret deal with Ocean Properties to rig the process. The charges arose after the city allowed the firm to make changes to its development proposal after the Feb. 22 RFP submission deadline.
“This is a key part of our waterfront, it's one of the very few pieces of waterfront left that is publicly owned and a lot of people have high hopes about what could be there,” says Jeff Ingles, managing editor of the Portland-based newspaper the Phoenix. “But the two proposals that have come in are functionally identical.”
In addition, the fact that U.S. Senator George Mitchell, who is a Democrat, made his support for Ocean Properties' bid a matter of public knowledge for Portland's largely Democratic City Council hasn't helped public relations, Ingles adds. “People in Portland are upset because, for one, we should have more of a choice than we do, and if we really have to settle for the non-choice that we have, it shouldn't be a political football,” he says.
As a result, the proposed redevelopment remains at a standstill. In late August, city officials postponed making the decision on which developer should get the bid from Sept. 5 to Sept. 17. But after the Sept. 17 City Council hearing failed to deliver the five votes needed for consensus, it looks as though the city may have to start the whole process over from scratch. In the aftermath of the meeting, the head of Ocean Properties threatened to pull out of the project altogether, while the head of Olympia Companies said he was mulling reworking his firm's bid.
Portland provides a classic example of exactly how not to pursue a public/private partnership and how muffing the process can prove costly for developers and governments alike. For good or for bad, however, public/private partnerships are becoming a necessary way of doing business. Developers who want to get projects built will need to become adept at navigating what can be a very onerous process. The trick, pros say, is getting the balance right. Public/private partnerships — because they involve taxpayer money or other help from government officials — thrust development from the back room to the spotlight. So developers need to become much more sensitive to public perception. And that's no easy task.
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