BRUNSWICK — A Cumberland County Superior Court justice has dismissed a lawsuit that challenged a tax increment financing agreement valued at more than $900,000 between the town and the developer of Maine Street Station.
Local hotel owners, including Linwood Austin and Peter Anastos, and former town Councilor Karen Klatt argued that the town failed to adequately consider the impact on existing businesses of a new, 54-room inn at the $14 million downtown project.
They also claimed the Town Council failed to comply with public hearing requirements, created a TIF that was excessively large, and violated the Town Charter when it approved the TIF and a credit enhancement agreement for JHR Development.
But according to the March 18 decision by Justice Nancy Mills, the law only requires the town to consider the potential effects of the TIF on other hotels, which it did. There are other factors the town weighed when deciding to grant a TIF, according to court documents, including job creation, redeveloping a vacant area, and bringing businesses to downtown.
The court concluded that “from the evidence before it, the Town could have rationally found that the benefits of the proposed Development Program (which included the TIF) outweighed the potentially negative impacts on existing businesses.”
The plaintiffs’ second claim was that the town made changes to the Development Program after the close of the public hearing, essentially denying them opportunity to speak.
But the court found that Anastos, Austin and Klatt had “a reasonable opportunity to present testimony prior to the town’s decision” by speaking at a council meeting and submitting written testimony, and that the town had adequately informed them of the proposed development program.
The court also dismissed the third claim, that the 90-acre TIF exceeded the “traditional” downtown area, and the fourth, that the town violated its charter when it approved a credit enhancement agreement by resolution and not ordinance. JHR Development claimed the agreement was necessary to help it obtain financing for both the inn and Maine Street Station.
The TIF refunds 100 percent of the taxes paid on the inn in the first five years, declining to 50 percent over 10 years.
Despite the dismissal, Anastos said he is not done litigating.
“It’s a long road, it’s to me something we’re not going to let go of,” he said.
Anastos said the ongoing construction of the hotel proves the developer did not need a tax break, which was estimated last March at $907,000, to proceed with the project.
“The hotel developer told the town he had to have the TIF to build the hotel, and with it tied up in court he still built it,” Anastos said.
But JHR’s lawyer, John Moncure, said the developer was credit-worthy enough to qualify for financing from Bath Savings Institution even without the TIF.
“If the TIF was not allowed, he could pay the debt,” Moncure said.
BRUNSWICK — In another legal victory for the town, the Maine Supreme Judicial Court on Thursday upheld a decision by the Cumberland County Superior Court denying hotel operator Peter Anastos access to information he requested.
Anastos sued over the town’s refusal to let him see a feasibility study done by JHR Development regarding the construction of a 54-room inn as part of the Maine Street Station development.
Anastos argued that the entire study was not protected from disclosure, and the town could only redact certain parts of it. He also argued that the town had not shown that the study contained proprietary information.
But the supreme court found that the study “constituted proprietary information because it contains not only specific information, but also an analysis of that information that would be advantageous to JHR’s competitors and would disadvantage JHR if released.”
Because of this, the court found that redaction was not appropriate, and concluded that the entire feasibility study was exempt from disclosure.
— Emily Guerin