Proposed Harpswell aquaculture center dies on negotiation table

Posted Nov. 06, 2012, at 6:56 p.m.

HARPSWELL, Maine — A proposed aquaculture facility at Mitchell Field will not be built after the town’s Board of Selectmen was unable to reach an agreement with the project’s developers.

The project in question was the Harpswell Oceanic Center at Mitchell Field, which was being planned as a nonprofit aquaculture, education and research facility, said Joanne Rogers, the center’s president.

Town officials and selectmen had been negotiating with the proposed center’s board and its commercial affiliate, RAS Corp., since June 2011.

The center’s bid for a lease began after the town passed an ordinance in March 2011 that allows 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 the Harpswell Oceanic Center, or HOC, defaulted.

Henderson said the terms would also not hold the center 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.

Rogers read a prepared statement at the Nov. 1 meeting 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.

Rogers said the center 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, who’s on the center’s board and is an 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 center’s board had set several performance and development milestones to make sure it 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 the center would sublease 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 the center could not accept.

“You will never accept money from private investors [with a fee like that],” Shaver said. Instead, he said, the center 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 also have required approval of any ownership transfers for sublessees of the center, Shaver said, an unusual requirement for a lease agreement like this.

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

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