Almost 20 years after it was purchased for redevelopment, the Kennebec Arsenal is sitting in disrepair.

Four years after Augusta city officials deemed the buildings to be dangerous, the city of Augusta and Main Street I LLC, the property’s owner, have reached a proposed settlement on its future development.

Here are three things to know about the Kennebec Arsenal and the next steps on the road to redevelopment.

VACANT FOR ALMOST 20 YEARS

Tom Niemann, a North Carolina developer and the primary owner of the limited liability company that owns the Arsenal, bought the property from the state of Maine in 2007 for $280,000 with the agreement he would preserve, maintain and repair the property to keep its value as a historic place.

The original plans were to develop the buildings into a mixed-use site with retail, office space, a boutique hotel and residences. But since the sale almost 20 years ago, little progress has been made.

The Kennebec Arsenal, a group of eight granite buildings overlooking the Kennebec River, was built by the federal government between 1828 and 1838 and is a National Historic Landmark. The building is considered to be one of the best examples of an early 19th-century military depot, according to Maine Preservation.

However, due to the lack of activity over the past two decades, the property has deteriorated significantly.

The lack of action in developing or maintaining the property has been the subject of repeated legal action from the state and Augusta city officials and complaints from community members.

PAST LEGAL ACTION

City and state officials have expressed frustration with the lack of progress a number of times.

State officials sued Niemann in 2013 for neglecting the property, requesting it be returned to the state or alternatively seeking a $1 million bond and assurances from Niemann that he would protect, preserve and develop the property. Niemann denied the allegations, and the lawsuit was later dropped after an agreement was reached in which Niemann said he would better maintain the site going forward.

In 2017, Niemann’s company paid $60,000 owed to the Greater Augusta Utility District for liens and stormwater fees to avoid foreclosure.

Augusta residents formed the Concerned Citizens for Augusta Historical Preservation of the Kennebec Arsenal group and urged city councilors to take action in 2021 after growing frustration with the lack of development.

In August 2022, the Augusta City Council declared the property dangerous and gave Niemann 90 days to address the building concerns before pursuing further legal action. Niemann’s company filed a complaint shortly thereafter requesting the dangerous building determination be reviewed in the Kennebec County Superior Court.

PARTIES PROPOSE TO SETTLE

Now, both parties have reached a proposed settlement that could resolve the litigation pending City Council approval.

The settlement proposal states that Main Street I LLC is in the process of finalizing a funding plan for redeveloping the property. If the plan is not finalized 90 days after the settlement agreement is approved, litigation will continue.

City Manager Jared Mills said Main Street I is pursuing funding from private investors and financial institutions involving low-income housing tax credits. Mills also said Main Street I has obtained permits for the construction of residential buildings with some office space.

Main Street I would also be obligated to obtain certificates of occupancy, a document stating a building adheres to codes and is safe to occupy, from the city for the six buildings slated to be redeveloped within one year of the funding plan finalization. If it fails to receive the certificates, Main Street I would be required to pay the city $60,000 and the city would obtain a court order requiring the company to address any remaining violations within three months.

Main Street I would be required to pay the city $75,000 as a settlement payment when the funding plan is finalized.

Main Street I would be required to replace its sole managing member, Niemann Capital LLC, with a panel of three co-managers: Mike Scholtz, an investor; Richard Parkhurst, a local developer focused on renovating old buildings in Augusta; and Niemann Capital.

A third-party construction manager would be appointed to oversee the redevelopment, and Parkhurst or another person or entity approved by city officials will serve as clerk of the works for the redevelopment. Main Street I would be required to provide a weekly progress report and will be responsible for paying the cost of the clerk of the works.

Mills said the riverfront property has seven main buildings and one accessory structure. Six buildings are currently involved in the permitting process, with the seventh likely to be developed later.

Main Street I would be free to redevelop the seventh building, known as the Old Max, on the same or a different timeline. Mills said Main Street I will likely be using the Old Max building as a staging area for construction, meaning its development would have to come later.

The Old Max building was built between 1907 and 1909 as a maximum security building for the Maine Insane Asylum, according to the Maine Historic Preservation Commission.

Both parties will dismiss the pending litigation if the terms of the settlement are followed. Legal action may continue if they are not.

Niemann declined to comment on the settlement proposal as it is still an outstanding legal matter.

The City Council will consider the proposed agreement during its meeting Thursday in City Council chambers at City Hall, 16 Cony St.