Report: Controversial building sale in Bath involved no corruption
An investigation into the sale of a city-owned building points to ‘honest’ mistakes and a violation of the Freedom of Access Act.
By J. Craig Anderson canderson@pressherald.com
Staff Writer
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.
An investigation into the controversial sale of the MidCoast Center for Higher Education building in Bath (seen above) 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.
Gabe Souza/Staff Photographer
Related Documents
PDF: Bath Investigation Report
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.
(Continued on page 2)
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