PRESS RELEASE HARPSWELL 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 HOCs concept for a land-based recirculating aquaculture production entity with associated visitor center and academic/research partners. HOC expressed interest in leasing the newly created Marine Business District at Mitchell field and formal lease negotiations began in June 2011. 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. Since the time we first proposed this concept, HOC and its affiliated commercial entity, RAS Corporation, have received multiple grants from the Maine Technology Institute. The grants allowed us to advance our technologies and to assist with site planning, development and permitting 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 HOCs Board of Directors. The time and money that HOC has spent are indicative of its commitment to the Mitchell 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. The Town and HOC agreed to pursue a market-based, arms-length lease agreement for the Mitchell Field 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 reach agreement 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 Towns own conversion formula. HOC has already proposed rents higher than market rates to offset lower 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 commercial operator. This type of clause is not commonly found in area ground & building leases and would have the effect of impeding HOCs 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 Towns interest in having a viable business as a tenant; however, we believe investors and lenders are the ones to make this decision. The Town insists that an independent aquaculture/RAS expert be contracted to verify the validity of the HOC/RAS cash flows that were provided to the Town, a highly unusual request.

Guarantors of Performance The Town insists that Principal Officers be personally liable for environmental issues and fraud. The proposed aquafarm is a very green business to be run to the highest industry standards. Thus HOC feels that there are no meaningful environmental risks associated with the project and liability insurance will cover any losses that could impact the Town. Transfer of Ownership - The Town requires approval of all subleases and change in HOC ownership. However, approval of ownership transfers for sub-lessees, i.e. RAS Corp., is not a normal requirement. Subordination Banks typically require first call on any assets up to the level of indebtedness (likely millions of dollars). They require the Towns claim for lease payments to be subordinate to bank debt (property taxes would not be subordinate). No subordination will preclude any bank financing by HOC or RAS Corp, almost surely killing any prospects for needed borrowing. Legal & other professional fees to prepare lease - Normally parties to a lease agreement each pay their own legal expenses. HOC has offered to prepare the lease. The Town wants to prepare the lease agreement (which is agreeable) but have HOC pay for a share of its costs (which is not).

We are very disappointed that we have not yet been able to come to an agreement on these terms and do not have a lease that would allow our activities to move forward here in Harpswell. It has become increasingly important that RAS Corporation secure a definitive site for its operations. The company is actively working to secure additional grants from various funding sources and to secure significant financing as necessary in order to implement its business plans. RAS Corporation has been forced to focus on alternative sites, in locations not as strategically desirable as Mitchell Field, but which offer advantages in timing, cost and commercial flexibility for this start-up period of growth in its operations. The encouragement from the citizens of Harpswell as exhibited in the many community meetings and the personal commitment by HOC volunteer board members (all from Harpswell) is especially gratifying and we sincerely thank the community for its support! Perhaps someday a project like HOC can be developed at Mitchell Field.
1 November 2012

################################################# Contact: Joanne Rogers, President, Harpswell Oceanic Center, jomrogers@yahoo.com, 207-833-5576