Sale of Bar Harbor low-income senior housing facility to college comes under fire

College of the Atlantic and Pamela Gleichman, owner of Harbor Hill Estates in Bar Harbor, have come under fire for a proposed purchase-and-sale agreement they have worked out for the college to buy the subsidized housing property. The college wants to use it for student housing and other purposes, but state and federal officials say required procedures for legally selling the property have not been followed.
College of the Atlantic and Pamela Gleichman, owner of Harbor Hill Estates in Bar Harbor, have come under fire for a proposed purchase-and-sale agreement they have worked out for the college to buy the subsidized housing property. The college wants to use it for student housing and other purposes, but state and federal officials say required procedures for legally selling the property have not been followed. Buy Photo
Posted Jan. 23, 2013, at 2:15 p.m.
Last modified Jan. 23, 2013, at 5:12 p.m.

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BAR HARBOR, Maine — The proposed sale of a low-income housing facility for the elderly to College of the Atlantic has raised concerns from government officials and criticism from building residents.

As a result, COA officials have postponed a meeting before the local planning board, which is weighing an application from the college to use Harbor Hill Estates for educational purposes. The COA board of trustees is expected to meet this weekend to discuss its purchase-and-sale agreement with Harbor Hill Associates and how to move forward, according to a college official.

Darron Collins, president of COA, said Monday that despite the issues that have arisen, COA still is interested in acquiring the building, which is about 1,000 feet away from the college on Highbrook Road. He said COA wants to make sure that the 20 or so residents of the housing unit have suitable places to live before COA takes ownership of the property, even if that process takes a while.

Collins said the college takes its role as a community partner seriously and does not want to unfairly displace anyone.

“It could be a year, it could be four years,” Collins said. “[COA] loves this island community. We wouldn’t be who we are without the community.”

Last fall, COA signed an agreement to buy the property from Harbor Hill Associates, which is owned by developer Pamela Gleichman. The sale is contingent upon COA getting approval from the town to use the building for educational purposes, rather than just as housing, and upon the U.S. Department of Agriculture giving permission to Gleichman to remove the 1.7-acre property from the federal agency’s subsidized housing program.

Residents of the building have told town officials they are upset at the way the proposed sale has been handled.

Lee Estey, 80, is a former teacher who has lived at Harbor Hill for 17 years. He said Tuesday that he found out COA was trying to buy the building last fall from a notice about the planning board review that was posted inside the building. He said the college has not contacted any of Harbor Hill’s residents about the proposed sale and has acted “indifferently” to what may happen to the residents.

He said the manner in which the college has handled the manner runs counter to the ecofriendly college’s humanitarian mission.

“They just assumed that if we didn’t make waves, everything would slide through and it would be a fait accompli,” Estey said.

He added that Gleichman shares about half the blame for the way the deal has transpired so far.

According to Collins, the purchase-and-sale agreement requires that new housing be found for all Harbor Hill tenants and that USDA allows the 1.7-acre property to be withdrawn from the USDA housing program before the sale can be completed. The most important condition of the sale, he said, is that a “compassionate and caring relocation plan” be developed for the residents of Harbor Hill.

Collins acknowledged that some conditions in the purchase and sale agreement are not likely to be met by deadlines stipulated in the agreement. The agreement as a whole is due to expire at the end of February, he said.

He said COA approached the Bar Harbor Housing Authority, which owns and maintains its own local rental-assistance properties, when the sale was first proposed and was told that the Harbor Hill residents most likely could be transferred over a period of time into authority housing. Harbor Hill was “half-empty” last spring, he said, when college officials first got a close look at the building, but it has more tenants now.

According to USDA officials, Harbor Hill has 21 residents now, 15 of whom receive federal housing assistance.

Attempts Tuesday and Wednesday to contact Gleichman for comment have been unsuccessful.

State and federal officials also have raised concerns about the proposed sale.

According to a spokeswoman with Maine State Housing Authority, the state agency has a right of first refusal on the property, as it does with other subsidized housing projects under Maine law, in order to help ensure stability for the low-income residents who live there.

Deborah Turcotte of MSHA said that the state agency was not notified of the pending sale, which also is required by law. She said MSHA learned about the proposed sale through media reports.

“We still have not received a letter” of notification from the property owner, Turcotte said Wednesday.

She added that MSHA wants to make sure the housing needs of the tenants are being met and will continue to be met. The current tenants of Harbor Hill all receive government subsidized housing assistance and most are older than retirement age.

“At this point, we are reviewing our options,” Turcotte said. “We’d like to know where these seniors would be given housing. That is our concern.”

USDA officials also have raised concerns about the proposed sale.

In a letter sent to Gleichman on Dec. 17, USDA Area Specialist Catherine Witham said that Gleichman must get USDA permission to remove the property from the agency’s subsidized housing program. Gleichman also must get permission from USDA to pay off the mortgage ahead of schedule and must submit a request to do so in writing at least 180 days before the requested payment date. According to Witham, Gleichman had requested permission to pay off the loan immediately. When Gleichman made the request is not clear.

In the Dec. 17 letter, Witham also indicated that the purchase and sale agreement sets a deadline of Feb. 1, 2013, for COA to enter “into agreements with all the current tenants with respect to the termination of their tenancies prior to closing and otherwise upon terms satisfactory to [COA].” This is not permitted until USDA has granted Gleichman permission to pay off the 50-year mortgage ahead of schedule, Witham wrote.

“Since [USDA] has not given consent for prepayment of this property, there must be no agreements with existing tenants to terminate their tenancies due to a potential sale of the property,” Witham wrote in the letter. The sentence is underlined and printed in bold in the letter for emphasis.

Virginia Manuel, state director in Maine for USDA Rural Development, indicated Wednesday in an email that USDA has the option of foreclosing on the property if the terms of its loan agreement with Harbor Hill Associates are not met. She said the requirement that Gleichman get approval from USDA to pay off the 50-year mortgage ahead of schedule is aimed at protecting the tenants’ welfare.

“The prepayment process at its core addresses [USDA] concerns about the availability of adequate housing for tenants and for tenant transition to other housing, as necessary,” Manuel wrote.

The housing project is managed — but not owned — by Stanford Management, Inc., which is run by Gleichman’s daughter and former Maine gubernatorial candidate Rosa Scarcelli.

David Farmer, a spokesman for Stanford Management, said Monday that Gleichman’s firm did not tell the property management company it had reached an agreement to sell the building to COA. Scarcelli and Gleichman, Farmer acknowledged, have a strained relationship.

“We don’t have control over the pending sale,” Farmer said.

He said that, because the legal requirements for selling the property have not been met, it likely will take a while before everything is sorted out. In the meantime, Stanford Management is doing its best to maintain the property, he added.

“Taking care of the tenants is the No. 1 priority,” Farmer said.

COA has filed an application with the local planning board to use the property, which is zoned residential, as a private school. COA officials appeared before the planning board in early December and were scheduled to do so again on Jan. 2, but have postponed their next appearance before the board until Feb. 20.

According to application materials filed with the town, COA would house students in the 25-apartment building but also plans to use part of it as office and classroom space. The college does not plan to expand the building or to make any structural or layout changes to the interior, according to documents on file at the town office.

The building was constructed in 1988 and, according to information in the town’s online property tax database, has an assessed value of $2.26 million.

Ben Elias, a Mount Desert attorney who is representing Estey pro bono in the matter, said Tuesday that COA has acted “carelessly” in the manner it has pursued the purchase of Harbor Hill. He said that, given all the legal issues USDA and MSHA have raised with the proposed sale, he doubts COA has proper standing to seek permission from the town to change the use of the property.

“I wonder if they sought out legal counsel prior to entering into the purchase and sale agreement,” Elias said. “This has created a great deal of emotional turmoil and uncertainty. I hope the college is going to take this into account [as they move forward].”

Estey said his preference is that he be allowed to stay at Harbor Hill for at least several more years. If he does have to move out, he said, he could survive elsewhere. It’s other tenants older than him that he’s worried about.

“I’m not worried, personally,” Estey said. “I can take off. I can go live in a tent somewhere.”

Follow BDN reporter Bill Trotter on Twitter at @billtrotter.

 

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