BAR HARBOR – Town Councilor Jeff Dobbs asked the town manager on Tuesday for an accounting of legal costs in a pending land use case involving one of Dobbs’ friends and business associates.

Dobbs questioned whether the town should continue paying lawyers in the pending appeal of hotel developer Thomas Walsh – one of the two largest developers in Bar Harbor.

“We’re spending a helluva lot of money on something I don’t think we should be spending a helluva lot of money on,” Dobbs said, admitting he didn’t know how much money has been spent to date or will be spent over the course of the appeal.

“If this is costing us $100,000, I don’t want to go there,” he said.

Dobbs said the town should weigh the cost of prosecuting Walsh against what benefits the town would get if the appeals board upholds the code enforcement action.

Walsh allegedly has been using a dwelling on his Regency Hotel property on Eden Street as a commercial enterprise without a permit.

The so-called Walsh House was permitted as a single-family dwelling in 1994. At the time, Walsh told the planning board he intended to use the house as a family home when he and his grown children were in Bar Harbor, according to town documents.

Dobbs said the town should consider rezoning the Walsh property, end the dispute and cut its losses.

“Maybe instead of pursuing a potential $100,000 lawsuit, we should look into rezoning” the Walsh House, Dobbs said Wednesday, “which would be a helluva lot cheaper.”

Town Manager Dana Reed told the council that rezoning the Walsh House is “entirely appropriate,” considering it is surrounded by businesses.

But Walsh does not have a valid permit for the building, Reed said, which is why the town issued a violation and ordered him to stop using the house for anything other than a single-family home.

“Are you asking me why I am enforcing the ordinance?” Reed asked Dobbs.

On Wednesday, Dobbs shrugged off conflict-of-interest questions and asserted that the town’s latest code enforcement action against Walsh is just another example of the town singling him out for persecution.

Dobbs, who lobbied for Walsh last year on an unrelated matter, admitted he has done business with Walsh and considers him a friend.

“I do business with everyone in town. I’m not even going down that road with you,” Dobbs said in discounting any conflict of interest regarding his relationship with Walsh.

He later added, “No matter what it looks like or smells like, I always do what I feel is right.”

Dobbs alleged that someone has a “personal vendetta” against the developer, who owns about $30 million in property in Bar Harbor, but “I am not free to say who” it is.

“If [Walsh] was doing something evil down there, then that would be different,” Dobbs said. “But the town manager gets attorney happy and thinks that because he has the law behind him, he can go with it.”

Reed said Wednesday he is following orders from the council to prosecute all land use violations that go to the appeals board. The council last year increased permit and code enforcement fees significantly to cover the cost of the planning office, including legal fees.

The council does not have authority to alter land use laws, Reed said. That power rests solely with town meeting voters, who adopted the land use ordinance to control growth and maintain the character and beauty of the community.

Dobbs requested that the Walsh House matter be placed on the council’s next agenda. He asked for a report on how much money the town has paid in legal costs in the case, including the cost of staff time, as well as the town’s chances of prevailing.

The town is paying three lawyers in the case. One lawyer works exclusively for the appeals board, which has the final say in interpreting the land use ordinance unless a case is appealed to Superior Court.

The town also pays for a lawyer to represent the code enforcement officer before the appeals board. The town’s general counsel also has been involved in the Walsh appeal.