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Negotiations end for proposed Harpswell aquaculture center

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Negotiations end for proposed Harpswell aquaculture center

HARPSWELL — The town has ended negotiations for a proposed aquaculture facility at Mitchell Field after the Board of Selectmen could not reach an agreement with the project's organizers.

Town officials and selectmen had been negotiating for the proposed Harpswell Oceanic Center at Mitchell Field with the project's board and its commercial affiliate, RAS Corp., since June 2011.

HOC's bid for a lease began after the town passed an ordnance in March 2011 to allow the Board of Selectmen to sign multi-year leases for the area without approval from the annual Town Meeting.

Prior to the board's 3-0 vote Nov. 1 to discontinue the negotiations, Selectman Jim Henderson read a statement citing concerns about the nature of the lease and the impact it could have on the town.

The town determined the lease would not be in Harpswell's best interest, Henderson said, because it could force the town to make loan payments or surrender the property to creditors if HOC defaulted. 

Henderson said the terms would also not hold HOC accountable for "any misrepresentations, fraud, or environmental programs that may arise for its business, since HOC, unlike well-established businesses, has virtually no corporate assets."

"Therefore, the town concludes that at this time, because HOC is unable to agree to the non-negotiable items as listed above, there is no basis on which to continue negotiations and no further negotiations are currently planned," he said.

Also at the Nov. 1 meeting, HOC President Joanne Rogers read a prepared statement expressing disappointment with the failed negotiations and the importance of securing a site for the facility.

"We are very disappointed that we have not yet been able to come to an agreement on these terms and do not have a lease that would allow our activities to move forward here in Harpswell," Rogers said.

The Harpswell Oceanic Center was being planned as a nonprofit aquaculture, education and research facility, she said.

Rogers said HOC could not reach an agreement with the town in "three critical areas: land value/rent for the Mitchell Field Marine Business District, viability of the business and lease provisions that are generally commercially acceptable."

Allen Shaver, an HOC board member and adviser for RAS Corp., said Monday the town wasn't sure about the aquaculture facility's viability.

"I think what existed here is a real lack of confidence for what we were going to do," Shaver said.

He said the HOC board had set several performance and development milestones to make sure HOC was on track. If they missed any of them, Shaver said, the board would give Mitchell Field back to the town.

Another part of the contention over the lease terms, Shaver said, revolved around how HOC would sub-lease a portion of the property to RAS for commercial development.

He said the town expected 1.5 percent of the gross revenue created by RAS – a stipulation HOC could not accept.

"You will never accept money from private investors (with a fee like that)," Shaver said. Instead, he said, HOC was willing to give a percentage of its gross revenue to the town, although the amount would be lower than what RAS would have been required to give.

The town would have also required approval of any ownership transfers for sub-lessees of HOC, Shaver said, an unusual requirement for a lease agreement like this.

In addition, the HOC board member said the town's expectation for the HOC board to offer personal guarantees on any debts was unrealistic, because the board consists entirely of volunteers. The personal guarantees would have allowed a creditor to lay claim on the guarantors' assets if HOC defaulted, he said.

"We're volunteers. We're just creating something for the town," he said. "It's not customary in commercial arrangements."

For now, Shaver said any HOC development will have to wait while the board looks for other property.

"Our view is that RAS Corp. will go establish business somewhere else," Shaver said, "and HOC is being put on hold."

Dylan Martin can be reached at 781-3661 ext. 100 or dmartin@theforecaster.net. Follow him on Twitter: @DylanLJMartin.