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Court favors Brunswick in lawsuit over inn feasibility study

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Court favors Brunswick in lawsuit over inn feasibility study

BRUNSWICK — A judge has dealt a blow to a local hotel owner's lawsuit over the town's tax rebate plan for the developer of Maine Street Station.

Peter Anastos, a Yarmouth resident and principal owner of of Maine Course Hospitality Group in Freeport, sued the town after it approved a program that will return to JHR Development approximately $907,000 in property taxes collected on the proposed 54-room inn. 

Anastos, who also owns the Fairfield Inn & Suites on Old Portland Road and is partial owner of about a dozen hotels around the state, sought access to the study the town used as a basis for deciding JHR Development needed a tax rebate program to finance the inn.

Anastos claimed the document is subject to the state's Freedom of Access law. The town countered that the study, which was viewed by the Town Council, was confidential because it contained proprietary data and trade secrets about JHR that could be exploited by competitors.

Superior Court Justice Robert E. Crowley ruled in favor of the town on June 7. In the final paragraph of his decision, Crowley said Anastos "simply wants the study to gain a business advantage."

"While Anastos disagrees with providing public assistance for JHR's proposed inn," Crowley added, "his arguments supporting public disclosure of the study overlook the fact that releasing the study could result in a competitive disadvantage to JHR."

Anastos on Friday said he was disappointed with the decision and hasn't ruled out an appeal.

He also said he plans to pursue another claim the town didn't properly consider the detrimental impact the rebate program would have on existing hotels, which he said are already experiencing high vacancy rates.

He argued that another hotel, particularly one receiving public funding, would force others out of business.

"This doesn't change the overall suit," Anastos said. "(The rebate) is supposed to provide economic assistance to create new business, not take away business from other people."

Anastos also rejected Crowley's statement that he wanted the study to gain a competitive advantage, adding that a portion of the document had been widely circulated to local commercial real estate agencies by JHR President Hilary Rocket.

Anastos added that his attorney, Ken Cole, of the firm Jensen, Baird, Gardner & Henry in Portland, hoped to convince the court to depose town staff to determine if the study contained information that the inn would hurt other hotels in town. 

Cole was unavailable for comment Friday.

Meanwhile, Town Manger Gary Brown said Friday that the town stands by its decision to award the rebate program, which will return to JHR an average of 85 percent of property taxes collected on the inn through a 10-year agreement.

"We're pleased that the court decision confirmed that the (Town Council) was appropriate to not disclose confidential information," Brown said.

Brown added that the town attorney had been meeting with Anastos' lawyers to discuss the second portion of the suit.

Town officials have called the inn the lynch pin of Maine Street Station, a $14 million joint development project between JHR and the town. The town and JHR signed a joint development agreement in 2007, and since that time the project's overall value has declined as the town's investment has increased.

The project was originally valued at $36 million. Town officials have attributed the falling valuation to the project's reduced size, from 15 acres to 5.5 acres.

The town's investment is now 36 percent of the overall value.

Steve Mistler can be reached at 373-9060 ext. 123 or smistler@theforecaster.net