March 29, 2011

DAVID B. OFFER: Developer's failure to act puts Kennebec Arsenal at risk

David B. Offer

It's sad to see history crumble.

Walking on the Kennebec River Rail Trail four years ago looking west across the river, it was easy to picture a bright, exciting future.

A developer, Tom Niemann of Durham, N.C., had purchased the historic Kennebec Arsenal and announced plans to rebuild it, preserving the historic structures while creating a complex that included condos, businesses and offices.

State and city officials were excited about the project; the plan seemed so good that the state sold the 22-acre riverfront site and the historic arsenal buildings to Niemann's company for $750,000 -- about half its assessed value. The deal called for Niemann to pay $280,000 down, the rest later during development.

In addition, the city agreed not to collect property taxes on the development, saving Niemann Capital about $27,000 a year.

The developer took over one of the best riverfront sites in Maine for $280,000 and a promise.

Everything seemed terrific; it wasn't.

The development plans have gone nowhere. Rather than preserving historic buildings and creating something valuable for the community, the buildings have been abandoned, vandalized, burned and left to crumble. Augusta police describe the arsenal as a law enforcement problem. The sad thing is that there is nothing new in this report. These newspapers have written about gradual destruction of the arsenal several times. Nothing seems to change.

A year ago, Chip Gavin, then head of the state Bureau of General Services, wrote to Niemann complaining that the developer "has failed to meet its obligations" to preserve, protect, maintain and repair the arsenal buildings.

If things did not get better, Gavin wrote, the state "will take whatever steps it deems necessary to protect its rights."

Niemann Capital responded that "We share the state's concerns about some of the vandalism which has taken place recently. We're trying to further protect the property from that happening."

Cecil Brown, an executive at Niemann Capital, told the Kennebec Journal and the Morning Sentinel a year ago that "folks in Maine can rest assured we're committed to the arsenal. Tom Niemann is a preservationist by nature."

The words from the developer and the state sounded great, but they were meaningless.

Last November, Gary Heinz, a New York banker who was involved in the project with Niemann, met with Augusta City Manager William Bridgeo and city Development Director Michael Duguay to talk about problems at the arsenal.

Bridgeo said Heinz told him that a local company had been hired to mow lawns and plow snow at the arsenal. Nothing happened. Roads were not plowed this winter and vandalism continued. In December, Heinz and two other bankers were indicted by a federal grand jury in New York City for participating in a bid-rigging conspiracy involving municipal bonds. He has pleaded not guilty and has not been in touch with officials in Maine since the indictment.

No one from Niemann Capital has been in contact with city officials since Heinz' visit, Bridgeo said. Niemann did not return a call seeking comment for this column.

A valuable, historic asset is being turned into junk, and there is no reason to expect things to get better.

The crumbling arsenal buildings make it clear that the time for talk has passed.

The city and the state should cancel the sale and end the tax abatement agreement with Niemann, reclaim the property, do what it takes to preserve the arsenal buildings, and, when the economy improves, find a new developer.

That may be easier to write than it is to accomplish. It will involve legal questions -- and perhaps lawsuits -- over exactly what is required in the contract by which the state sold the property to Niemann. I don't know if the city has the legal right to revoke a tax agreement for non-performance, but I expect lawyers will argue over this, too.

The difficulties are not an excuse for doing nothing.

Fortunately, officials appear to have run out of patience with Niemann.

Betty Lamoreau, acting director of the Bureau of General Services (she succeeded Gavin) said last week that she has talked about the arsenal with Bridgeo and plans to meet soon -- within a week or two -- with him, Assistant Attorney General William Laubenstein and state historian Earle Shettleworth Jr. to decide what can be done.

That does not mean just more talk, Landereau said.

"Bill (Bridgeo) suggested that the state take back ownership," Landereau said. "That may be necessary."

It is.

David B. Offer is the retired executive editor of the Kennebec Journal and the Morning Sentinel. Email davidboffer@hotmail.com.

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