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New storm swirls around Scarborough condo project

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New storm swirls around Scarborough condo project

SCARBOROUGH — Seven years after brothers Nick and Peter Truman first proposed converting their 22-unit beachfront motel into eight luxury condominiums, the pair is still sparring with the town. 

Nick Truman said The Lighthouse Inn at Pine Point has been unfairly targeted by the Zoning Board of Appeals, which in November imposed unique conditions intended to prevent the Trumans from establishing a "condotel."

ZBA Chairman Mark Maroon last week said he believes the town and the Trumans will end up in court over the conditions, which require the project to meet eligibility guidelines for Fannie Mae mortgages.

Those guidelines require condos to be owned by owner-occupants rather than investors, and prohibit any one condo owner from owning more than 10 percent of a condo building – which in the case of The Lighthouse Inn would be more than one condo.

The ZBA imposed the Fannie Mae condition to address neighbors' concerns with the project at Pine Point Road and King Street, Maroon said.

"Condotel" is jargon for a condominium building operated like a hotel, where individual owners rent their properties to vacationers. Some Pine Point residents were concerned a converted Lighthouse Inn would become a condotel and attract raucous renters. Condotels are not illegal in Scarborough.

Maroon said earlier in June that the Trumans should have had their project "pre-approved" by Fannie Mae and "violated the town's trust" by not doing so.

The Trumans and their attorney say such pre-approval is impossible, and that Fannie Mae approval can't be obtained until after the condos are built and 70 percent sold. 

"This was an ambiguity in the board's approval," said Gene Libby, attorney for Nick and Peter Truman.

Nick Truman said he and his brother were pressured into accepting the Fannie Mae condition in November, even though they didn't understand what they were being asked to do. 

"We didn't know what (Maroon) was talking about," Truman said. "But we were trying to get the thing approved. If he'd asked me to stand on my head in the corner, I'd have done it."

Truman expects owner-occupants to buy the townhouse condos, but is upset that the town thinks it has a right to tell the future owners of his condominium building how or whether they can rent their properties. Pine Point is full of condo and cottage rentals, he said, and putting restrictions on his units would put him at a competitive disadvantage.

"If they want to control these condominiums, they can buy them," Truman said Wednesday. 

At  a meeting last week to consider whether the Trumans would receive a six-month extension of their ZBA approval, Maroon said the board is justified in applying new conditions to the Lighthouse Inn because "condominiums are collapsing everywhere you look." The conditions are intended to protect the neighborhood from vacant units and "blight," he said.

During that meeting, Maroon tried to enact additional restrictions to ensure the Trumans' condos be used as homes, not profit centers for absentee owners. He ultimately failed, and the board approved extending the original appeal.

Truman said the condos will get the necessary approval. Plus, condominium documents filed with the Planning Board include a provision requiring rentals to span no less than a week, which the Trumans say will alleviate the appearance of a "condotel."

While the Trumans ultimately got their extension, it wasn't before some harsh words were shared by Libby and Maroon.

"Other than prostrating myself on the floor and signing in blood, I don't know any other way to say that (the Trumans) are going to sell to owner-residents," Libby said. "In fact, the existing conditions require it."

"You have the potential for eight units to all be rented weekly," Maroon said. "I don't care what you call it. That's a condotel."

Truman said he hopes to begin the hotel-to-condos conversion in the fall. The Trumans now must complete subdivision and site plan review with the Planning Board before construction can begin. 

The brothers have already received preliminary approval from that board, which was a higher hurdle to jump than final review.

"The design of the project and what's involved meets the standards," Town Planner Dan Bacon said Wednesday. "Since (preliminary approval) was issued there are only a few more tweaks they need to make."

But the condo project's future is still uncertain.

Dave Grysk, the code enforcement officer, said ambiguous wording in the Fannie Mae condition could cause complications when the Trumans seek occupancy permits. 

"This is just 'Twilight Zone'-esque," Truman said. 

Mario Moretto can be reached at 781-3661 ext. 106 or mmoretto@theforecaster.net. Follow him on Twitter: @riocarmine.