MILLINOCKET, Maine — Major Katahdin region landowner Katahdin Timberlands LLC will begin selling more than 700 leased lakefront camp lots in unincorporated parts of Penobscot and Piscataquis counties this year, an action likely to prompt a construction industry boom and greater security for lot owners, officials said Tuesday.
The economic impact of the sales likely will be enormous, said Dan Corcoran, a Millinocket real estate broker and licensed forester who owns North Woods Real Estate.
“It is absolutely huge. This is as big as the mill starting. This will have a tremendous impact on the economy of this area,” Corcoran said Tuesday. “It will open up camp sales to a much broader market and a higher-end market.”
The lots will be offered for sale first to the leaseholder of record at fair market value, consistent with Katahdin Timberlands lease agreement provisions and Maine law governing sales of leased premises, said Marcia McKeague, president of Katahdin Timberlands LLC.
“We would like to emphasize that not all lots will be offered for sale,” McKeague said in a letter to leaseholders mailed Friday. “KTL will focus first on selling those lots which occur in large blocks and have straightforward access to public roads.”
The first sales of as many as 200 to 300 lots are likely to occur late this year. Almost all of the land is on lakefronts, including South and North Twin, Pemadumcook, Millinocket, Ambajejus, Caribou and Cedar lakes, McKeague said. Almost all of the lots already have camps on them ranging from seasonal to year-round residences.
The lots are in Township 1 Range 8, Indian Purchase 4 and Long A Township in Penobscot County; and Township 1 Range 9, Township 1 Range 10 and Township 3 Range 12 in Piscataquis County, Corcoran said.
The lots and buildings are worth $75,000 to more than $400,000, he said.
“These are all lands that have been developed for a long time,” Corcoran said. “Some that have been leased for more than 100 years. They have never been owned by leaseholders before.”
Katahdin Timberlands owns about 1,200 acres in the Katahdin region. The sales will divest the company of most of that acreage, McKeague said.
Timberlands’ sister company Katahdin Forest Management LLC owns about 300,000 acres, placing the two companies among the region’s largest landowners, McKeague said.
One of the last similar leased-lot sales occurred in 2006 and 2007 when heirs of Webber Timberlands Co. — one of Lincoln’s largest landowners, owning half of the town’s 23,000 forestry acres at the time — offered for sale at least 125 leased lots. That led to an explosion in building permits issued on property around Lincoln’s Caribou, Egg, Long and Upper Coldstream ponds and lakes and a tripling of the number of building permits issued overall as new lakefront property owners improved their lots, town officials said.
It also displaced many lifelong Lincoln residents as lakefront property values and taxes climbed. Many moved into the downtown area and sought building permits for housing they bought there, Lincoln officials said.
Corcoran and McKeague doubted that much leaseholder displacement will occur.
“Most of them [leaseholders] will be very happy to be able to purchase lots. Many of them have been asking about buying for a while,” McKeague said. “Many of them are not in a position to buy, so that will create some difficult choices. I think some people will decide to sell to their children or relatives.”
About 90 percent of the lots are recreational properties, not year-round residences as Lincoln has, Corcoran said. Taxes in the unincorporated areas are lower than in Lincoln, which may prevent leaseholder displacement. Many of the properties already are owned by out-of-staters and Mainers not living in the Katahdin region, Corcoran said.
“One of the benefits about the timing of this is that lot values have decreased from their peak [in 2008 and 2009] and interest rates are very low. I think that will be helpful to some people who thought they might not be able to afford it otherwise,” McKeague said.
“I see very little displacement, but I do anticipate investment in properties, a significant increase in improvements to existing buildings and new developments,” Corcoran said.
The leases were often a major impediment to significant building and lot improvement or sales, as leaseholders hesitated to add value to something they didn’t own. That block will be gone now, Corcoran said.
Katahdin Timberlands workers will need several months to determine which lots will be included in the first group to be offered for sale and then prepare them, McKeague said. The landowner will decide which lots to offer, determine the fair market values, prepare offers for leaseholders and then notify qualified lessees individually. Qualified lessees are those in good standing with an active lease, McKeague said.
The company is undertaking the sale at the orders of its parent owner, Brookfield Asset Management, and its desire to invest in greater moneymaking ventures, McKeague said.
“This decision should not be interpreted to mean that Brookfield intends to divest other holdings in the area. For example, Brookfield intends to maintain its ownership position in Acadian Timber, which owns Katahdin Forest Management LLC, for the foreseeable future,” McKeague wrote in the letter to leaseholders.
Follow BDN writer Nick Sambides Jr. on Twitter at @NickSam2BDN.