State emails released

Behind the scenes in warden's land deal

Another party expressed interest; state may pay warden to rent property in future
By Daniel Dunkle | Jul 08, 2011
Photo by: Daniel Dunkle The Maine Bureau of General Services is located in the Cross Building in Augusta.

Augusta — Documents released by the Maine Bureau of General Services July 7 show that the Maine State Prison warden used knowledge she had gained through her employment with the prison during negotiations to buy state-owned property in Thomaston.

Prison Warden Patricia Barnhart and Sheehan Gallagher paid $175,000 to the state to buy a Ship Street Circle parcel that includes three houses and more than five acres of property extending down to the St. George River, according to Maine Bureau of General Services Acting Director Betty M. Lamoreau.

In response to a written request from VillageSoup, the Maine Bureau of General Services released 347 pages of emails, deeds and other documents related to the sale.

In one instance during the emailed negotiations over the price of the property, Barnhart states: "During this past year we as a facility looked into utilizing the property at 24 Ship as additional housing for our [prison] staff and determined it was uninhabitable without extensive and cost prohibitive repairs..."

The documents also show that she based her initial offer of $150,000 in part on the prices the state accepted when selling the former Maine State Police barracks and other state-owned properties in Thomaston.

Emails between state officials further show that another potential buyer expressed interest in the properties during the negotiations.

The documents also indicate that although Barnhart has agreed to let the prison use one of the houses rent-free for four years to house trainees, she may charge the state "market rent" starting on the fifth year.

The discussion of Barnhart buying the property started with an email Sept. 2, 2010, from Denise Lord, formerly of the Maine Department of Corrections, to Chip Gavin, former director of the Maine Bureau of General Services.

"The warden asked if there was a possibility that she might purchase the house she is living in currently," Lord wrote. "...Is it possible that BGS could consider this? Not sure if there are any prohibitions or concerns about this and will respect your decision."

In the same email, Lord noted that the Department of Corrections would like to keep the use of one of the Ship Street Circle homes as temporary housing for newly hired staff.

The prison has been providing the warden with housing as has been the tradition. However, state officials say the state is not obligated by the warden's contract to provide her with housing.

Gavin contacted Chris Paszyc of CBRE/The Boulos Company on Sept. 7. Boulos had been hired by the Bureau of General Services to sell certain state-owned properties.

"If a current occupant was able and willing to purchase one of the homes at its appraised fair-market value, I would be interested to know your recommendation," Gavin wrote. "Do you think, in the current market, that is a reasonable approach?"

"I think that is reasonable and would encourage you to pursue any and all buyers in this market," Paszyc wrote back the same day.

Barnhart made an initial offer of $150,000 for all three homes. In the following email, she cites the amounts the state had already accepted when selling the former Maine State Police barrack in Thomaston and three Main Street properties across from the former site of the Maine State Prison on Route 1.

"The following information was taken into consideration when establishing a purchase amount for the Ship St. properties," Barnhart wrote in an e-mail Dec. 8, 2010, to Jon Leahy of Boulos. "Based on the sales amount of the properties of which I am aware: 446 Maine [sic] St.=$104,000.00; 367, 232 and 399 Maine St.=$150,000.00; I arrived at a total amount for the Ship St. properties. These properties sold at approx. 39% of the assessed values as taken from the 5/30/06 appraisal information."

"I gave additional consideration to the condition of the homes," Barnhart continued in the same e-mail. "During this past year we as a facility looked into utilizing the property at 24 Ship as additional housing for our staff and determined it was uninhabitable without extensive and cost prohibitive repairs starting with the condition of the heater, drains, roof, siding, windows etc. We have used 26 Ship as a bunk house for staff to date however it does not have a stove etc. and also has issues with the roof, siding, paint, windows etc."

"The house I currently occupy is also in need of window replacement throughout," she wrote. "Finally, situated directly behind the house I currently reside in is a power station with daily visitors. Last winter a storm took out the power station for four days-ripping the cables down off the house and the station and blocking the street.

"These houses are situated on 4.3 acres of property, however most of this is not usable space and it is shared with working train tracks and a hobo camp down by the river," she concluded.

Barnhart and her partner closed on the properties June 9, 2011. On June 15, 2011, Mark Barbour of Landmark Corp. in Rockport representing Barnhart sent an email to Thomaston Code Enforcement Officer Peter Surek asking to come before the planning board for a subdivision of the Ship Street Circle property.

The property is 5.03 acres in size, according to the deed, which excludes the land within the railroad right of way. Thomaston Assessors' Agent David Martucci says the property has an assessed value of $458,001.

In response to Barnhart's initial offer, Leahy in December 2010 recommended countering at a price of $200,000 if the prison system could lease one of the houses for three years at $1 annually. Otherwise, he recommended the state counter at $275,000 for her to own all three buildings free and clear.

"I feel that we will need to incentivize her in the purchase price to accommodate the necessity to keep DOC in-place rent free," Leahy wrote.

As negotiations continued, the state and Barnhart would eventually arrive at $175,000 with a four-year lease back to the state to use one of the houses for $1 per year.

Prison inmates provide work

The negotiations with Barnhart continued Jan. 31 with an email from Leahy to Director William Leet of the Division of Leased Space.

"Patti [Barnhart] is happy to provide the facility rent-free for four years, but if the DOC [Department of Corrections] requests a renewal for a fifth year, she would expect a market rent," Leahy wrote. "She would like to continue having the lawn/plowing/trash handled by the state. Currently it is handled by a prisoner work program. Is it possible for this to continue? She has requested that the state pay 1/3 of the annual real estate taxes once due."

"I believe we can accommodate all of the requests of the buyer excluding the payment of 1/3 of the annual real estate taxes," Leet wrote Feb. 8.

As part of the final agreement, inmate work crews provide mowing and landscaping work on the property, remove trash and clear snow, Maine Bureau of General Services Acting Director Betty M. Lamoreau and Department of Corrections Associate Commissioner Jody Breton confirmed July 6.

"I am not sure if it is legal for us to provide those services without owning or leasing the property," Leet wrote in an email March 1.

"I have been trying to get an answer from the AG's Office," he wrote March 9. "Corrections and BGS are OK with it; we just need to be sure it's appropriate and legal."

Interviewed at the Bureau of General Services July 7, Lamoreau said she did not know what the response from the Attorney General's office was. She noted that while the bureau had provided a complete record of emails and documents, some discussions that may have taken place over the phone are not part of the record.

Another party interested

On Jan. 18, 2011, about the time Martucci said Barnhart showed him the properties and asked some questions about them, an email went from Leet to Paszyc stating, "I had a conversation with Bill Bird from Thomaston who was interested in the homes on Ship's Circle. I was not sure where the negotiations are with the potential buyer, so I gave him your number to call to discuss. What is the situation in Thomaston?"

"I have spoken to Bill Bird — it appears he had heard at Thomaston Town Hall that the property was selling," Leahy wrote in an email Jan. 19. "I have expressed that we are in basic agreement with a prospective buyer. He was accepting of that response."

What is the fair market value of the property?

State and town documents dating from 2006 to the present provide multiple appraisals, estimates, offers and assessments of the value of the property.

The town has assessed the value of the property at $458,001, according to Martucci.

Martucci said July 5 that his assessment is completely up-to-date.

On file both in Thomaston and with the state is an appraisal of the state-owned properties from May 2006 performed by Amidon Appraisal Company of Portland for the state. According to that appraisal, the home the warden has been living in on Ship Street Circle alone was valued at $175,000. The two other homes on the street were appraised at $125,000 and $130,000.

On Dec. 29, Gavin sent an email to Leahy at Boulos asking his opinion of the value on the Ship Street Circle properties. Five minutes later, Leahy responded saying "$220,471." The email states that the number was from an executive summary prepared in 2009. A copy of the executive summary was also included in the documents released.

"The assessed values bear no relation to the actual market value. This is typical of government owned property on municipal tax rolls," Paszyc said in a June 30 email.

"If this went out to market..."

Leahy wrote about the lack of marketing for the property in an email June 29.

"She submitted an offer prior to us openly marketing," he wrote. "It is important to note, due to the three homes being located in close proximity to each other and on a single lot, it would have been very difficult and costly for the state to subdivide."

"Upon receiving Patti's offer, Chip realized that we would not be able to relocated the DoC [Department of Corrections] from the property," Leahy continued. "We would need to negotiate a multi-year, free rent 'lease/back' for the DoC House. We felt this encumbrance would make the property very difficult to sell."

Paszyc added June 30, "If this went out to market, it was going out at $210,000 if I recall correctly. That was before we found out DOC had to stay and had no money to lease back."

However, the initial plan apparently called for marketing the property. Among the documents released by the state was a "Strategic plan for property disposition" for 22-30 Ship Circle Thomaston. The headings on each page of the plan included both the label "State of Maine" and CBRE/The Boulos Company.

The document states that after meeting with the state and stakeholders, The Boulos Company would implement a marketing program for the state that would include direct marketing, brochure preparation and distribution, advertising in print and electronic media, development of websites and direct solicitation.

Another document concerning specifications for the work to be done by Boulos mentioned advertising properties in daily newspapers.

Other state-owned properties sold around prison land

In November 2010, the state sold the former Maine State Police barracks to an entity called Barracks LLC for $104,000, according to documents on file at the Thomaston Town Office. At the time of that sale, the same developers also received the right of first offer on a maintenance building behind the barrack.

Barracks LLC is a business started by a group that was until recently planning to develop the former Maine State Prison property itself. Other company names affiliated with the same developers include St. George Cove LLC and The Developers Collaborative based in Portland. The partners in the collaborative are Richard Berman, Kevin Bunker and James Hatch. Strong Insurance Agency Inc. has been operating out of the barracks.

In December 2009, two Port Clyde residents purchased three properties across Main Street from the former prison property, including the buildings known as the warden's house and deputy warden's house. Like the Ship Street Circle properties, these properties had been owned by the state.

The three properties were sold to Carl F. Danielson and Carolyn Whittaker of Port Clyde. At the time the state reported the properties collectively sold for $150,000.

At the time the state said the properties had been listed on the open market in hopes of getting the best value.

Comments (1)
Posted by: Jeff Sukeforth | Jul 08, 2011 13:11

Nice if you can get it I guess for less then half what it is assessed for?!

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