Wednesday, December 05, 2007


Olympia wins nod for pier contract

The city election of Nov. 6 effectively ended a 4-4 City Council stalemate on the landmark project.

By TOM BELL, Staff Writer December 4, 2007

The Portland City Council chose Olympia Cos. on Monday as its partner for redeveloping the Maine State Pier, the centerpiece of the council's plan to create a new urban neighborhood on the city's waterfront.

The 5-3 vote ended a three-month impasse that was settled only by the results of the city election on Nov. 6.

The city manager now will negotiate with Olympia about the terms of the lease. The council will decide later whether to accept those terms.

"Today is truly a great day for the city of Portland," Councilor David Marshall said. "We have broken the stalemate."

Chris O'Neil, a lobbyist for the Portland Community Chamber, said he shared the council's "elation" that it had reached a decision and ended a debate that began in February, when Olympia Cos. of Portland and Ocean Properties of Portsmouth, N.H., first submitted their bids. The council has been deadlocked 4-4 since September about which firm to pick.

"You can criticize. You can praise it," he told the council. "It has been a bizarre process."

Three councilors opposed the motion to begin negotiations with Olympia, saying that Ocean Properties, which has $1 billion in assets and offered to put up $100 million in escrow, has greater financial resources and more marine experience.

But Olympia's supporters said the company has a superior approach to the design process and developed stronger community support.

Olympia Cos. proposes building a hotel and a "village" of shops and restaurants on the pier, and a public park and an office building on adjacent land.

Ocean Properties proposed building the hotel and the office building on the land, and more marine uses on the pier.

The council also voted 7-1 to include in the project a deep- water berth for the world's largest cruise ships. It would be built at the end of the Ocean Gateway pier, which is under construction. Councilor Daniel Skolnik voted against the motion.

With the deadlock broken, the council can move forward, said Councilor Kevin Donohue, who supported Olympia.

Mayor Ed Suslovic and Councilors John Anton, Cheryl Leeman and Marshall also voted for Olympia. Councilors Skolnik, Jill Duson and Nicholas Mavodones Jr. voted in favor of Ocean Properties.

Councilor James Cohen recused himself because one of his law partners is a consultant for Olympia.

Olympia's design has significant permit issues that may prevent it from being built, said Skolnik, who was sworn into office earlier in Monday.

He noted that supporters of Olympia said the design can be renegotiated. He said that approach does not seem to be a fair and open public process.

"How is it transparent to vote for an unknown design?" he asked.

Because the city election effectively resolved the issue of picking a developer, the council spent most of Monday's debate battling about what kind of bargaining conditions it should set for negotiations.

Mavodones proposed that Olympia follow a set of conditions, including $10 million in upfront money, financial commitment from lenders, and deadlines for getting regulatory approval and finishing the project. Also, Mavodones said, the project should not be built in phases.

The Portland Community Chamber proposed a similar amendment, but the conditions were less stringent. The chamber said the council should require Olympia to put at least $5 million in an escrow account after both sides reach a final agreement about the lease terms and the development plan Mavodones said he is worried that problems in financial markets may prevent Kevin Mahaney, who heads Olympia, from getting the loans he needs to build parts of the project

"I have concerns it won't be done as we have asked," he said.

Duson said she wants Olympia to show that it has the financial capacity to build the project.

Both proposed amendments were defeated, 5-3, along the same lines as the vote on the developer.

Anton said it is premature to set conditions.

He added that he didn't like either proposal and he wants to open up the process to additional public input about the design. "We are at the point where we have a tangled mass of things we are trying to untangle," he said.

Staff Writer Tom Bell can be contacted at 791-6369 or at:

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