State, town pass the buck, delay Scarborough pawn shop

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SCARBOROUGH — A local business owner says his attempt to open a pawn shop in Scarborough is being held up by the town’s lack of a local licensing ordinance.

Town officials say he can obtain the license he needs through the state, which makes a local ordinance unnecessary.

“When I went to the town and asked about putting in a pawn shop they said no one had asked to do that before,” Tom Bennett said. “Everything was a go until I went in and talked a little further.”

Bennett said he has everything ready to open Coastal Pawn and Gifts in the Southgate Plaza at 426 Route 1, including thousands of dollars worth of merchandise he purchased on Web sites like eBay and Craig’s List.

But he’s caught in a “Catch-22” that has bounced him from town planning staff, to the state and back to Scarborough’s Ordinance Committee.

“(The town doesn’t) have anything in place,” Bennett said. “I’m trying not to rock the boat, but I’m getting edgy. I wanted to be open by Nov. 1.”

After learning from town staff that he would have to get a pawn shop license from the state, Bennett discovered the state requires a local license, too. The applicant must obtain a state supervised lender license, a process that, by the state’s own admission, is not ideal.

The Web site, under Pawnbroker Licensing Information, warns: “This is an expensive and difficult process, so prospective pawnbrokers are urged to work with their municipality to obtain a license.” It goes on to offer a sample pawnbroker ordinance for consideration by towns and says that town fees usually range from $10 to $50.

Bennett said he looked into the supervised lender license and found it could cost him thousands of dollars.

On advice in an e-mail dated Oct. 28 from William Lund, superintendent of the Maine Bureau of Consumer Credit Protection, Bennett has continued to try to work with the town.

“Most pawn shops get licenses from their towns, because that is usually less complicated than getting a supervised lender license from our office (an applicant for a supervised lender license, for example, must demonstrate a positive net worth of $50,000, and must post a surety bond),” Lund wrote.

To complicate the situation, Bennett signed a lease after being told in August it is a requirement before the town can issue a certificate of occupancy. Bennett said he only signed the lease after he spoke with the town’s attorney, the police and the fire departments. Then, in mid-October, he said he was told he would have to meet with the Ordinance Committee.

Though he has since appeared before the council to request an expedited ordinance process, the committee does not meet again until the end of November, making it unlikely that an ordinance will be in place before next year, Assistant Planner Jay Chace said Thursday.

This would be the first pawn shop Bennett has operated, he said, but he has worked in several of them in the past. He said he doesn’t plan to sell guns, and sees the business as providing a service.

“In this economy many people who can’t qualify for a loan have no access to money if they get caught in a pinch,” he said. “If you need 25, 50 bucks or whatever, where do you go to get that?”

The pawn shop would hold merchandise for a month. After that time, if the merchandise owner hasn’t paid him back with 25 percent maximum interest for the month on items $500 or less, the merchandise will be released for sale to the public, he said.

“In this economy, pawn shops are flourishing,” he said. “If you watch the news, down in Florida there are people pawning their Mercedes,” he said. “People pawn their Picassos and their Renoirs – it’s that bad.”

Peggy Roberts can be reached at 781-36612 ext. 125 or