BREWER, Maine — A plan by the Brewer Housing Authority to purchase land owned by the former chairman of its board for a senior housing project has raised the concern of at least one city official and was the subject of an executive session by city councilors Thursday evening.
The proposed $280,000 sale price of the 4.16-acre parcel owned by former housing authority board chairman Calvin Bubar is more than three times the assessed value of the land and more than twice what Bubar paid for it in 2007, according to city records. The sale is scheduled to close on Monday.
“It did not pass the straight- face test,” City Manager Steve Bost said of the proposed deal on Friday. When Bubar purchased the property for $120,000, “that raised a few eyebrows, but not nearly as much as the amount the housing authority intends to buy it for,” Bost said, noting the city does not have the authority to halt the sale.
When called at home Friday, Bubar’s wife said he was out and would not be available for comment until Saturday.
Joe Ferris, Bubar’s attorney, said Bubar got a good deal on the property when he purchased it two years ago.
“It’s a very attractive property,” said Ferris. “If [the housing authority board members] didn’t want to pay what Cal thought it was worth, they didn’t have to buy it. They made the decision to purchase it.”
The elderly housing project “sounds like a great project,” he added.
Ferris, who also sits on the City Council and is deputy mayor, acknowledged that councilors held an executive session concerning the matter on Thursday but that no action was taken. He did not reveal what was discussed. Calls to other councilors were not returned Friday.
The Brewer Housing Authority’s mission is to provide low-income housing to those who qualify. It owns and operates 154 units, according to its Web site. It is funded with federal, state and local revenue, according to Bost. It has teamed with Penquis (formerly Penquis CAP) on the proposed $6 million, 32-unit elderly housing project planned for Bubar’s parcel.
Records of meetings show Bubar was chairman of the housing authority’s board while negotiations about the housing authority purchasing his land were under way. The purchase and sale agreement was signed on July 9 of this year. Bubar, who operates a real estate business and also is a Brewer School Committee member, hand delivered his resignation letter on July 8, but was still officially a board member until the Brewer City Council accepted his resignation on July 14.
Gordon Stitham, the Brewer Housing Authority executive director, said on Friday that Bubar took steps to ensure there was no conflict of interest.
“When we talked about the land, he wasn’t even part of that discussion,” Stitham said, adding that when discussions were held, “they went into executive session and he [Bubar] went away.”
Minutes from several of the 2008 and 2009 BHA board of directors meetings indicate otherwise.
Page 10 of the Sept. 23, 2008, meeting minutes state, “Chairman Bubar discussed the possibility of selling his property located on Chamberlain Street to the Housing Authority.” And according to minutes from the Feb. 24, 2009, meeting, “a lengthy discussion [was held] concerning the financial responsibility, the property at 258 Chamberlain Street and the six acres [that] the Brewer Housing Authority owns.” At that meeting, “Chairman Bubar ask[ed] if we would continue with the agreement” to pursue the project.”
Asked why the minutes differed from his statement, Stitham said Penquis officials attended the February meeting, and Bubar was there for the presentation, but “as far as buying that land, he was not a part of that. The whole thing has been blown way out of proportion.”
Stitham said he contacted Housing and Urban Development and was told that as long as “Cal was not part of the vote” there was no conflict. “He just proposed it to the board. That’s all he did.”
Another board member, who asked not to be identified, said that Bubar was present during the discussions, but he didn’t participate in them.
Ferris said his client “absolutely did not participate in any of the discussions” about the land purchase. He said the housing authority board, without Bubar, made the decisions.
Stitham said that Bubar resigned in July and was not at the board meeting when the purchase and sale agreement was signed for his property.
Stitham said that he’s really excited about the project, which will help to address the lack of available and affordable senior housing in Brewer.
“The city really needs this project,” he said. “It’s the best place for it. It will be an asset for the city.”
The funds for the land purchase would come from local programs, Stitham said.
“If the money was an issue the board wouldn’t go with it,” Stitham said. “We know a good thing when we see it.”
The housing authority is purchasing the land and will lease the land to Penquis, which is in charge of building and operating the 32 elderly housing units.
“If Penquis CAP cannot get funding for development of the land in two years straight, they will buy the land from Brewer Housing Authority,” Stitham said. “They’re 99 percent sure they will have the financing for it.”
Messages left Friday with Penquis officials were not returned.
In order to construct a multiunit development on Bubar’s parcel, its zoning will need to be changed from medium-density residential to high-density residential, which will require approval by the planning board and the City Council.
Stitham said he didn’t know who would be financially liable if, for some reason, the zoning change was not approved.
According to city records, the property at 258 Chamberlain St. is valued at $88,000. “That’s the combined value of the land and what remains of a concrete slab,” Bost said. “The home, which was condemned, was demolished at the city’s request, I think, back in ‘06.”
The board made an initial offer of $80,000 to Bubar for the land, Stitham said.
“He turned it down,” he said, adding that it was after that when he came up with the idea to have the property assessed as commercial land.
Stitham explained that the property was recently assessed using a commercial designation, which increased its value. Hooper Appraisal Services of Bangor assessed the property at $260,000.
“It should be noted that this appraisal was performed based on the extraordinary assumption that the subject site will be re-zoned to High Density Residential,” the appraisal letter states, a zoning designation which allows some commercial enterprises.
City staff knew about the project earlier this year after Penquis approached them about tax increment financing for the project and learned about the closing just this week, Bost said.
Bubar, along with his wife Nancy, purchased the Chamberlain Street land from Robert Larabee and Armande Nelson for $120,000 in mid-September 2007, according to a Maine Revenue Service real estate transfer tax declaration.
A few weeks later, Bubar and the Brewer Planning Board held an informal hearing to discuss and get feedback about the possibility of Bubar creating a housing project for people over the age of 55 on the parcel.
Two weeks later, on Oct. 15, 2007, Bubar was appointed to the housing authority’s board. In January 2008 he was made chairman.