GARDINER — City councilors said they won’t rush to make a decision about the city’s membership in the Kennebec Regional Development Authority, which the city attorney said Gardiner joined incorrectly in 1999.
At a public hearing Wednesday, the first on the issue since the attorney gave his opinion to councilors last November, only a former city councilor spoke.
Additional Images
Logan Johnston, who lost his bid for re-election in November, urged councilors to consider the benefit of staying in the organization the city has already poured hundreds of thousands of dollars into to build FirstPark, a regional business park in Oakland.
“It seems to me to be foolish to knowingly throw that money down the rat hole,” Johnston said.
The 24 Kennebec and Somerset County communities that formed the Kennebec Regional Development Authority, the governing body of FirstPark, have lost more than $5 million on the investment over the last 16 years, and Gardiner has lost more than $300,000. The city pays nearly $32,000 annually to the development authority and receives $14,000 back, according to the city’s budget.
The city’s attorney, Jonathan Pottle from Eaton Peabody, wrote in his review of the state law that established the authority that the city should have held a referendum vote in 1999, not just a council vote, to decide whether to join the group and to appoint representatives to the authority’s general assembly.
Some residents have suggested at previous council meetings that the city should take the development authority to court to get out of the arrangement. Pottle gave five options for the city in his memo: continue to make the annual contributions to the organization, hold a city election to approve prior actions, stop contributing to the organization, seek a court ruling declaring the city’s rights and obligations, and notify the organization that the city must put the issue to voters.
When the issue was previously raised by the city in 2008, another attorney with the city’s law firm told the previous city manager that if there was an error in how the city joined the development authority, it’s unlikely the courts would let the city walk away from the current debt already incurred and that is still being paid off.
Johnston, the only person who spoke at Wednesday’s public hearing, said if the city went to court to seek a ruling, the city could risk not recouping the money it’s already invested along with the future payback once the debts are paid off.
“I freely acknowledge that joining FirstPark was probably not the best thing to do, but a previous council was enamored with the project and agreed to join it,” he said.
From a practical point of view, it seems to be a mistake to make another bad decision following the bad decision to join the organization, Johnston said.
Authority officials told the city last year that Gardiner didn’t need to hold a referendum vote to join because it has a city council-style of government. Craig Nelson, attorney for the development authority and one of its founders, also told the city that its clerk certified that the process required by the state law took place, and that’s what the group relied on when it took on the debt to build the park.
City Manager Scott Morelli said councilors will discuss the issue again, but they haven’t yet made a plan for when that might happen.
Councilors also met in executive session to discuss another legal issue, an outstanding loan owed to the city by a downtown restaurant that closed in November.
The city awarded a $40,000 loan to Alex Parker’s Steakhouse two years ago, and nearly $37,000 is still owed to the city. Morelli told the Kennebec Journal in December that the city planned to sue the restaurant, but it has since decided to hold off and try to resolve the issue without going to court.
After discussing it in executive session, councilors directed Morelli to sell off equipment in the restaurant for at least $10,000 to recover part of the loan amount.
Councilors also approved sending a letter of intent in support of a hard cider-making company’s plan to apply for a $300,000 Community Development Block Grant. The business, Lost Orchard Brewing Co., received approval from the city in October to open the hard cidery in the former Gardiner Congregational Church on Church Street.
The company’s founder, David Boucher, of New Harbor, told councilors the company plans to close on the purchase of the building in the next few weeks and begin production soon afterward. The federal grant would be used to expand production to a larger facility, possibly in South Gardiner, Boucher said.
Paul Koenig — 621-5663
Twitter: @paul_koenig
Send questions/comments to the editors.
Success. Please wait for the page to reload. If the page does not reload within 5 seconds, please refresh the page.
Enter your email and password to access comments.
Hi, to comment on stories you must . This profile is in addition to your subscription and website login.
Already have a commenting profile? .
Invalid username/password.
Please check your email to confirm and complete your registration.
Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.
Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.