PORTLAND — The city was dealt a blow last week when developer Ocean Properties bowed out of negotiating to redevelop the Maine State Pier.
A spokesman for Ocean Properties said the decision was made after the company evaluated projects it currently has in the works.
“Over the last two years as the recession has deepened, Ocean Properties has invested in other areas,” attorney Harold Pachios said. “There is only so much they can put on their plate.”
Pachios said the problem is a “human resources” issue, not a financial issue.
“They are in a unique cash position where these are internally financed,” he said. In 2007, when Ocean Properties and The Olympia Cos. were competing for the chance to develop the city-owned pier, Ocean Properties said it had the cash in hand to pay for the project, while Olympia needed outside financing.
A request for proposals for the project was put out in October 2006, mainly because the structure was in disrepair from years of neglect. The City Council rezoned the land and the project hinged on the potential developer investing as much as $18 million in repairs. The council voted in December 2007 to negotiate for redevelopment of the 89-year-old pier with Olympia.
Talks with Olympia were terminated in November because of the city’s dispute with the state over who owns the ocean floor beneath the pier. The city wanted to move along with the development despite the conflict being unresolved. Olympia said it would have a hard time securing financing for the project if ownership of the submerged lands was not clear.
City spokeswoman Nicole Clegg said the city has not filed a lawsuit against the state to resolve ownership of the submerged lands. She said the decision will most likely require formal direction from the council.
Following the announcement that negotiations had ended, the council moved quickly to negotiate with Ocean Properties, which was still interested.
Just days before Ocean Properties’ Jan. 15 decision to pull out, the city set up a series of public meetings to discuss the project, and representatives for the developer reportedly had preliminary meetings with Planning Department staff.

The city is now left with a pier that needs millions of dollars in repairs and is for the most part vacant. Tenants of the building, including the city Transportation Department staff, were evicted last summer.
In a prepared statement Jan. 16, Mayor Jill Duson said she asked City Manager Joe Gray to present a list of options for rehabilitating the pier and to present those options to the council in February. One option is expected to be seeking federal help.
“At a national level, we know that there will be funding for infrastructure,” Duson said, since President Barack Obama has said he is committed to providing funding to fix America’s infrastructure.
City spokeswoman Clegg said she expects the possibility of suing the state over ownership of the submerged lands will also be an option.
She said the city has not been contacted by any other developers interested in taking on the pier project.

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