Critics stir as former Bath hospital is for sale again

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BATH — A property the city sold in May, which has been at the center of an ongoing debate over City Council transparency and accountability, is for sale again – at twice the price the city sold it for.

The city bought the Mid Coast Center for Higher Education for $1 and sold it to Phippsburg developer Robert Smith for $799,000. The City Council unanimously approved the sale April 17.

Critics of the sale have claimed the city failed to practice due diligence when it set the sale price, and did not sell the 9 Park St. building in an appropriate way.

The property is now listed by Edward Herczeg of Keller Williams Realty, with an asking price of $1.65 million.

Although Bath assessed the property at $6.5 million, Paul Mateosian, the assessor and assistant city manager, has called that a “cost-approach number,” based on what it would cost to build a hospital that size, minus depreciation. He said the assessment did not reflect market value.

City Manager Bill Giroux maintains that the city’s sale price was reasonable.

“The new owner must think it’s worth ($1.65 million),” Giroux said Friday. “It’s a listing price; time will tell what a sale price might be. I don’t know if he’s had success stabilizing the tenant situation; that certainly was our concern in minimizing the city’s risk going forward.”

“As tenants (left),” Giroux addes, “it would have had to have been subsidized by the taxpayers, as it had been for most of the time the city owned it.”

The city listed the property with a real estate agent, and received a full-value offer from Smith six days later, according to Giroux. He also said the city agreed not to advertise the property until the council could consider Smith’s offer.

Washington Street resident Larry Scott, a critic of the way the city sold the property in May, let city councilors and staff know how he felt about the latest development in an email distributed Thursday, Oct. 3.

“This is the property that was sold by the city on May 31st for $799,000,” Scott said. “It would seem that a potential profit of $851,000 in a 4 month period should give you pause to rethink your earlier evaluations. With the $5,000 down payment, a return of 170.2 times your original investment in four months gives a return of over 510.6 times your cash investment per annum.”

Scott told the City Council in June that he was not saying the building should not have been sold, or that the price was necessarily too low, but that “you will never know if the price is wrong.”

Another critic of the city’s sale, Michael Wischkaemper of York Street, said previously that “the city has a duty to get the best price it can when it sells property for commercial purposes. … This sale violates that principle. You can’t get the best price for a large commercial property like this with a secret, private sale.”

Asked by the Bangor Daily News Friday if he thought he could get the $1.65 million he is asking for the former hospital, Smith said, “Larry Scott seems to think so. Maybe he’ll buy it.”

Smith noted, though, that Scott has never contacted him concerning the sale.

Smith, who said he is tired of the “negative publicity” generated by the sale, told the BDN he has “done close to 70 projects and never had an issue in my life.”

Controversy surrounding the sale led the City Council on Oct. 2 to select Robert Crowley, a former Maine Superior Court judge, to conduct an independent investigation into the sale and issue a report on the matter.

A council decision in August to maintain confidentiality about a closed meeting where the sale was discussed prompted a petition campaign by some residents to recall several councilors. The council’s reversal of that decision led the petitioners, including Scott and Wischkaemper, to suspend the campaign.

The Keller Williams listing calls the property a prime office location, mentioning that it has been updated with state-of-the-art wiring, is used by Southern Maine Community College, is “especially well suited for classroom settings,” with “ample parking” and “good cash flow.”

Beth Brogan of the Bangor Daily News contributed to this story. Alex Lear can be reached at 781-3661 ext. 113 or [email protected]. Follow him on Twitter: @learics.

A Maine native and Colby College graduate, Alex has been covering coastal communities since 2001, and currently handles Bath, Topsham, Cumberland, and North Yarmouth. He and his wife, Lauren, live in the Portland area, and Alex recently released his third album of original music.