June 18, 2018
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Bath property assessed at $6.5 million, sold by city for $800,000, goes on market for $1.65 million

Beth Brogan | BDN
Beth Brogan | BDN
Phippsburg developer Robert Smith, who purchased the former Bath Memorial Hospital building from the city in May for $799,000, on Thursday listed the property for sale for $1.65 million.
By Beth Brogan, BDN Staff

BATH, Maine — Five months after the city of Bath sold a former hospital building for $799,000 — and amid an investigation of the deal — new owner Robert Smith of Phippsburg on Thursday listed the property for sale at more than twice the amount he paid.

Smith’s effort to sell the building reignited controversy in Bath, where some residents accused city officials of backroom dealings and mismanagement of municipal assets.

According to the Maine Multiple Listing Service, the property at 9 Park St. is on the market for $1.65 million. Smith said Friday that since the sale closed, he has installed windows, put another boiler online and spent about $200,000 on improvements.

In May, the City Council approved the sale of the building to Smith for $799,000, despite the assessed value of $6.5 million. Critics, including Bath residents Larry Scott and Michael Wischkaemper, objected to the sale price and the process, which they said was conducted in secret.

City officials maintain the sale was appropriate, in part because the property’s assessed value was as a hospital, and that value will decrease significantly when it is re-assessed as a commercial building.

Bath City Assessor Paul Mateosian said Friday that other former hospitals in Maine have sold for dramatically less than their assessed values. He added that the assessed value “has no particular relationship to the market value.”

Still, following criticism of the sale, the Bath City Council on Wednesday appointed former Maine Superior Court Justice Robert Crowley to investigate the process.

Scott and Wischkaemper have criticized Bath officials because the city never listed the property on a multiple listing service, which could have elicited additional offers.

“Five and a half acres of prime real estate in Bath — the real estate itself has got to be worth $800,000,” Wischkaemper said in July.

In an email Thursday night, Scott said,” It would seem that a potential profit of $851,000 in a four-month period should give you pause to rethink your earlier evaluations. With the $5,000 down payment, a return of 170.2 times your original investment in four months gives a return of over 510.6 times your cash investment per annum.”

Scott said Friday that after residents asked to see confidential documents about the sale, the council “stonewalled.” He blamed City Manager Bill Giroux for mismanaging the sale.

But Giroux said Friday that given “the instability of the tenant situation” in the building, he’s confident city officials were wise to minimize Bath’s risk and the sale was “appropriate.”

In August, three major tenants of the building confirmed to the Bangor Daily News that they were leaving or reevaluating their leases in the building. Smith said Friday that Southern Maine Community College officials have since notified him they will leave in June.

And a fourth major tenant, Mid Coast Hospital’s Mid Coast Medical Group, is leaving its options open, Lois Skillings, president and CEO of Mid Coast Health Services, said Friday.

“We are committed to staying in Bath, but we are exploring other locations that we think might be better for our community,” Skillings said.

“It’s not a question of whether there was a mistake. It’s just a question of who made it,” Scott said. “Will there be any recourse? I think that after five-and-a-half months of stonewalling, someone needs to go … and I think the city manager is the one on whom the blame must fall.”

Giroux declined to comment on Scott’s remark.

Mateosian characterized the criticism as “unfair” and that it misrepresented the council’s actions — which he said were “prudent” and “cautious.”

“Previous finance directors said to [Giroux], ‘You know this thing is bleeding money. We’re sinking,’” he said.

“I wish Bob Smith the best of luck, but from our perspective, when all of those [tenants] that used to have five-year-leases switched to one-year leases — that’s the red flag that this property is looking at redevelopment, and that can be expensive and there’s no guarantee of success,” he said.

City Council Chairman Bernie Wyman did not immediately return a call for comment on Friday. In August, amid a since-discontinued effort led by Scott and Wischkaemper to recall city councilors who voted not to make public the council’s executive-session discussions of the sale, Wyman said “personal vendettas” were driving talk of a recall.

Wyman attributed much of the controversy to the fact that an aggrieved party — whom he did not name — wanted to purchase the property “and didn’t get a chance to bid on it.”

Giroux said Smith must think the property is worth the new asking price, but he noted, “That’s not a sale price, it’s the asking price.”

Asked Friday if he thought he could get the $1.65 million he’s asking for the building, Smith said, “Larry Scott seems to think so. Maybe he’ll buy it.”

But Smith said Scott has never contacted him about the sale.

Smith said he’s tired of the “negative publicity” the sale has generated.

“I’ve done close to 70 projects and never had an issue in my life,” he said.

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