Hotel owner sues Brunswick over tax rebate for Maine Street Station inn
BRUNSWICK — A local hotel owner is suing the town over information used to justify a tax rebate plan for the developer of Maine Street Station and a proposed 54-room inn.
Peter Anastos, a Yarmouth resident and principal owner of of the Maine Course Hospitality Group in Freeport, filed the lawsuit March 8 in Cumberland County Superior Court in Portland.
Anastos, who also owns the Fairfield Inn & Suites on Old Portland Road and is partial owner of about a dozen hotels around the state, is seeking access to the feasibility study used as the basis for deciding that JHR Development needed a tax rebate program to finance the inn. The project is the so-called lynchpin of the $14 million joint development project between JHR and the town.
The rebate program, now under review by the state Department of Economic and Community Development, would award JHR Development an average of 85 percent of property taxes collected on the inn through a 10-year agreement.
The rebate is estimated at $907,000 and would be tacked on to the town's $5.2 million investment in Maine Street Station.
Anastos said Monday that the suit is part of a multi-front effort to oppose the rebate, which he said would give JHR an unfair competitive advantage over other Brunswick hotel owners, and possibly force one of them to close.
Anastos and other hotel owners spoke against the rebate program during a March 1 public hearing. Each claimed that the local market couldn't support another inn, much less one that will be rebated 100 percent of its property taxes for the first five years of the agreement.
Although Anastos is the only plaintiff in the lawsuit, he said the owners of the Comfort Inn on Pleasant Street and the Parkwood Inn on Gurnet Road have pledged financial support.
In addition to the lawsuit requesting the feasibility study under Maine's Freedom of Access Act, Anastos said the town didn't fully consider the impacts the tax rebate program would have on local hotel owners.
"This was a done deal," Anastos said.
He said none of them have opposed the town's investment in Maine Street Station until now.
"All of us supported the site clean-up, the grants, everything in the $5 million," Anastos said. "But this (tax rebate program) is like giving (JHR) $10 dollars off per room night. We can't compete with that."
The town, meanwhile, contends the feasibility study isn't subject to the state's Freedom of Access law because it contains proprietary, confidential information about JHR.
Patrick Scully, the town's attorney, said in a Feb. 26 letter that the study contained "trade secrets."
Anastos refuted that claim Monday, arguing that he'd even asked to see the study with redacted financial information.
"I've seen a thousand of these things," he said. "It contains market information, that's all. And that's a key thing for us because ... we want to know if the study shows that the inn and (rebate) will be injurious to competitors."
Proof that the town considered the rebate's effect on competitors is also key component of the statue governing the program, part of the town's proposed downtown Tax Increment Financing District.
Whether or not the town sufficiently weighed the impact was raised during the March 1 public hearing. Prior to the Town Council's 7-2 vote to approve the rebate program, the council was advised by its attorney that discussing the impacts during hearing satisfied the requirement.
But Anastos isn't convinced the town conducted due diligence.
"They never even looked at," he said.
Anastos also disputed claims by some councilors that the Maine Street Station inn would serve a different market niche than other Brunswick hotels. Proponents of the rebate said the inn would most likely attract parents of Bowdoin College students.
"Those people are staying with us now," Anastos said.
Town Manager Gary Brown could not immediately be reached for comment.
Steve Mistler can be reached at 373-9060 ext. 123 or firstname.lastname@example.org