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Harpswell Oceanic Center's statement on the failed lease negotiations

Harpswell Oceanic Center's statement on the failed lease negotiations

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The town has ceased negotiations for a proposed aquaculture facility on Mitchell Field after the Board of Selectmen said at their Nov. 1 meeting they could not reach an agreement with the project's organizers.
The town has ceased negotiations for a proposed aquaculture facility on Mitchell Field after the Board of Selectmen said at their Nov. 1 meeting they could not reach an agreement with the project's organizers.

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Published by: Dylan Lewis John Martin on Nov 06, 2012
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03/05/2014

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PRESS RELEASEHARPSWELL OCEANIC CENTER
At their November 1, 2012 meeting, the Harpswell Selectboard decided to deny the Harpswell Oceanic Center proposal to lease town property to develop an aquaculture business and research center.Harpswell Oceanic Center, Inc,. a non-profit Harpswell-based organization issued, the following statement: 
In April 2011, Harpswell Oceanic Center, Inc. (HOC) first presented to the Town of Harpswell
HOC’s
concept for a land-based recirculating aquaculture production entity with associatedvisitor center and academic/research partners. HOC expressed interest in leasing the newlycreated Marine Business District at Mitchell field and formal lease negotiations began in June2011.We firmly believe Mitchell Field is a property well suited for marine-related businesses,particularly as an aquaculture business park. We feel that the Harpswell Oceanic Center concept is an excellent fit for the marine-related business envisioned in the Master Plan. Sincethe time we first proposed this concept, HOC and its affiliated commercial entity, RASCorporation, have received multiple grants from the Maine Technology Institute. The grantsallowed us to advance our technologies and to assist with site planning, development andpermitting at Mitchell Field. Together, HOC and RAS Corporation have expended more than$150,000, not to mention the hundreds of hours contributed by the
members of HOC’s Board of 
Directors. The time and money that HOC has spent are indicative of its commitment to theMitchell Field site.Why does HOC need a lease now?
Specific site needed for site plan design for regulatory review.
Right, title & interest required for various long-lead time permits.
Investors require a specific site for commercialization
 –
as we are raising money now.HOC has requested from the Town no investment funds, no tax relief nor other subsidies. TheTown and HOC agreed to pursue a market-
based, arm’s
-length lease agreement for the MitchellField Marine Business District. The Town is to be responsible for infrastructure (roads, water,etc.) outside the business district.Despite more than a year of negotiations, the Town and HOC have not been able to reachagreement in three critical areas: land value/rent for the Mitchell Field Marine Business District,viability of the business and lease provisions that are generally commercially acceptable.
 
Annual Lease Payments -
Land values indicate rent less than $50,000 using the
Town’s
own conversion formula. HOC has already proposed rents higher than market rates to offsetlower rents in the initial inactive years. The Town feels that market rents are higher.
 
 
Additional Lease Fee
 –
the Town is asking for 1.5% of gross revenue from the commercialoperator. This type of clause is not commonly found in area ground & building leases andwould have the effect of impeding HOC
’s
ability to attract aquafarm investors.
 
Viability of Business
 –
HOC has agreed to performance and development milestones,which if not met, would trigger reversion of the lease to the Town.
We understand the Town’s
interest in having a viable business as a tenant; however, we believe investors and lendersare the ones to make this decision. The Town insists that an independent aquaculture/RASexpert be contracted to verify the validity of the HOC/RAS cash flows that were provided tothe Town, a highly unusual request.

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