Samoset neighbors file suit against city

ROCKLAND – Six residents filed suit in Knox County Superior Court on Monday asking the court to nullify an Oct. 19 vote of the City Council endorsing a tax break application for the Samoset Resort.

Through their attorney, Clifford Goodall of Augusta, the residents – Deborah Atwell, Kenneth Axelson, James Ebbert, Lucetta Ebbert, Eleanor Erdman and Merlin Miller – argued that the council did not follow the correct procedure in considering the request from Ocean Properties, the owner of the Samoset Resort, for a tax-increment financing district.

Specifically, the group believes the city did not meet the public notice requirement for the hearing on the application. State law requires that a notice be published at least 10 days prior the hearing.

The city published a notice in the Tuesday, Oct. 10, issue of the Courier-Gazette newspaper, and held the hearing on Thursday, Oct. 19. Though the Courier-Gazette is delivered to many homes and is available for sale in most stores on Monday evening, the plaintiffs argue that the publication date – as stated on the newspaper’s front page – is actually Tuesday.

Goodall cites Maine case law in his filing to support this point.

Ocean Properties first asked the council to apply to the state Department of Economic and Community Development for a tax-increment financing district – also known as a TIF – in May. The city would have to endorse the application, and the state would have to give its final approval.

Ocean Properties proposed $24 million in new construction in Rockland – most of the resort is now across the town line in Rockport – in exchange for a $1.4 million tax break. The company sought the tax break as an incentive to develop in Rockland, where the tax rate is much higher than in Rockport.

The state allows TIFs as economic development tools. The developer gets a break on property taxes for 10 years, and the new construction is sheltered from consideration for school aid, thereby benefiting the municipality.

In the face of weak council support, Ocean Properties withdrew its request, but came back in the fall with a plan to spend $14 million in exchange for $800,000 in property tax reduction. The company wants to build a new 200-room hotel off Samoset Road on the Rockland portion of the property, a spa building adjacent to the new hotel, and a 90-room motel on Route 1 just north of Rockland’s downtown. A marina also is planned, but it will not be considered in the TIF request.

“The plaintiffs are impacted and are aggrieved by not only the inadequate public notice for the public hearing, but also by the decision of the city council,” the lawsuit states, “because of the impact it will have on their property, their community, and/or their property taxes.”

All but one of the plaintiffs lives on Samoset Road, near the area where the new hotel is planned.

Mayor James Raye, an ardent supporter of the TIF since May, scheduled a special meeting of the council for Oct. 19 to hold the public hearing on the request. The mayor also indicated he wanted the council to vote on the request immediately after the hearing.

Opponents of the TIF complained that the meeting was called for while Councilor Joe Steinberger, an outspoken critic of the TIF, was out of the country. In addition, the meeting was less than three weeks before a new councilor would be elected. Both candidates for that position indicated they would have opposed the TIF.

During the hearing, Raye limited comments from the public to two minutes each. Many of those speaking on the TIF had not gotten through their prepared remarks when the city clerk, using a stopwatch, told them their time was up.

Later in the meeting, another councilor took the podium and let people complete their comments.

The manner in which the hearing was conducted is also part of the lawsuit.

“The public hearing itself did not provide the required opportunity for the plaintiffs or anyone else to adequately present their testimony concerning the … proposals,” the suit states. “The public hearing, therefore, failed to meet the requirements of a public hearing set forth in the statute.