March 28, 2024
BANGOR DAILY NEWS (BANGOR, MAINE

Loan refinancing favored> 1990 land purchase for park prompts Palmyra action

PALMYRA — Selectmen voted Wednesday night to proceed with plans to refinance a loan for the purchase of the town’s park land.

The move comes with an expectation of controversy. For more than four years, the town has been split on whether to refinance the loan. There has been a question if it is legally possible.

The loan stems from a 1990 land purchase adjacent to the town hall for development as a community park, approved by selectmen. A loan agreement was negotiated with Sally and Jerry Withee, owners of the property, for $26,696, at 10 percent annual interest for 15 years. When the contract was written, a clause was included to allow the town the opportunity to prepay the “principal in whole or in part at any time without penalty.” The Withees had not agreed to the prepayment clause, and it was crossed out by a single selectman who completed the deal.

Whether the agreement or the change in it are legally binding has been debated repeatedly.

In 1993, interest rates had fallen and voters at the town’s annual town meeting voted to refinance the loan in the belief it would save money, but no action was taken. In the fall of 1993, at a special town meeting, voters passed over another request to refinance the loan.

The Withees believe, based on their attorney’s opinion, that the promissory note is binding and that the loan cannot be refinanced or prepaid.

Donald Eames, attorney for the town, provided the town with an opposing opinion and is the second attorney to do so since the original agreement.

Eames met with selectmen Wednesday night in executive session to clarify that opinion. After the session, selectmen voted to pursue refinancing the loan through Peoples Heritage Bank at 5.24 percent for five years. The new loan is expected to save the town about $10,000 in interest.

The Withees did not attend the Wednesday night meeting, but sent a note to the board informing the members they would stand by their attorney’s opinion.

In other business, selectmen agreed to split the costs of a pager for Animal Control Officer Frank Brown with the town of St. Albans. Brown serves both communities. Elected officials have agreed a pager will benefit townspeople, creating a quicker response for animal control complaints.

Selectmen authorized a letter to be sent to the Newport Water District to state again the town’s refusal to pay for two fire hydrants installed in Palmyra in conjunction with the Wal-Mart development.

A second letter was authorized to be sent to Elwin Raymond, who is reportedly responsible for the operation of an illegal junkyard on the Grandmaison property on Route 152. According to Town Clerk Joan Bradley, Raymond allegedly has added more junk cars to the property in violation of town ordinances.

In addition, the town foreclosed last year on the Grandmaison property for the owner’s failure to pay 1992 taxes. Since the foreclosure, the 1992 taxes have been paid, but a second foreclosure took place for 1993 taxes. An agreement has been made with the owners for payments, Bradley said, but the town will not issue a quitclaim deed until the taxes are current.


Have feedback? Want to know more? Send us ideas for follow-up stories.

comments for this post are closed

You may also like