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Maliseet Gardens, a commercial and residential complex in downtown Bangor, has a new owner — the federal government.
The development project was undertaken by the Houlton Band of Maliseet Indians, with loans guaranteed by the U.S. Bureau of Indian Affairs. People involved in the development have said that the Maliseets fell behind on payments and the bank, Maine Savings Bank, called the loan.
The BIA paid off and is now the owner of the year-and-a-half-old complex. The government has brought in a local company, PI Realty Management Inc., to manage the complex.
“Basically the tribe got behind with Maine Savings Bank, and the government stepped in,” Darrell Cooper, president of PI Realty, said Friday evening. “We’ve been called in to manage the property for the Bureau of Indian Affairs.”
The management agreement is for one year.
“I suspect it’ll be sold,” Cooper said. The Bureau of Indian Affairs does not customarily stockpile real estate, he said, and it would make more sense for the agency to sell the development.
The $4.2 million project was built on land bounded by Exchange, York, Hancock and Oak streets. It consists of two buildings. The upper level on Oak Street contains 30 dwelling apartments for the elderly. The lower level on Exchange Street contains 28,000 square feet of retail and office space.
The commercial space is fully leased, with Bangor Hydro-Electric Co. and Paine Webber the prime tenants. There are six vacant apartments, Cooper said.
The government has requested an independent audit of the books, Cooper said.
Both Cooper and Kenneth Gibb, Bangor’s director of Community and Economic Developmen, said that the default did not reflect the business climate of downtown Bangor.
“It was an isolated situation,” Cooper said, “Initially people were overly optimistic. The projected income didn’t cover debt.”
For his part, Gibb said Friday evening, “I don’t think you can take a specific project and use it as a barometer for the economic situation downtown.”
Gibb said he had heard that the Maliseets were going to be forced to default, “but we’ve had no official notification that it was going to happen.”
Maliseet Gardens was proposed as a two-phase project and a portion of the original urban-renewal parcel remains vacant, on the corner of Hancock and Exchange streets.
The Maliseets have an option on the parcel, Gibb said. “The Maliseets are current on their option fees. We have to talk to the BIA and the Maliseets to discuss the whole issue with them, to learn more about the specifics of the situation.”
The project has a star-crossed history. The Bangor City Council first granted the Maliseets tentative developer status in 1984. After several rounds of wrangling, local developer Robert E. Baldacci Jr. was brought in and started making headway.
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