12/20/2005 - Tuesday, December 20, 2005


By KELLEY BOUCHARD, Portland Press Herald Writer

Copyright © 2005 Blethen Maine Newspapers Inc.


Portland city councilors agreed unanimously Monday night to pay $5 million for land on Riverside Street that could lead to the removal of two scrap-metal recycling yards from the Bayside neighborhood, which is being developed into a commercial and residential hub.

However, one of the scrap yard's operators, E. Perry Iron & Metal, claims it was cut out of the deal after almost a year of negotiations. City officials say there's still room for both scrap yards on Riverside Street, even as councilors approved a contract to sell all 13 available acres to New England Metal Recycling.

The City Council voted 7-0 to buy the 53-acre Lucas Tree Experts property at 636 Riverside St., an industrial parcel that is near Exit 48 of the Maine Turnpike and runs along the Presumpscot River.

The city also hopes to move public works garages from their cramped quarters in Bayside to the Riverside land within three to five years.

The complicated deal will be financed through The Trust for Public Land, which agreed to lend Portland the money if some land in Bayside and about 20 acres along the Presumpscot River are preserved as open space.

City councilors embraced the prospect of protecting natural habitat and moving the scrap yards, which a 2000 report called "the single most inhibiting factor to the successful redevelopment of Bayside." The downtown neighborhood is already in line for more than $100 million in commercial and residential projects.

"I think this is an opportunity not to be missed by the city," said Councilor Jill Duson.

Councilor Karen Geraghty acknowledged that the multifaceted deal was difficult to understand and had little public scrutiny. She urged Portlanders to trust that city officials are doing the right thing.

However, councilors questioned why E. Perry Iron & Metal isn't buying some of the 13 acres that were set aside for the scrap yards.

David Hirshon, E. Perry's attorney, said city officials were being "disingenuous" in saying that space is available on Riverside for his client. Hirshon questioned why the city agreed to pay $800,000 more than the $4.2 million appraised value of the Lucas property. City officials said the asking price for the Lucas property never was that low and only increased as negotiations went along.

Lee Urban, Portland's director of planning and development, said the per-acre cost of the Riverside land, including financing, was $110,000. Urban said the scrap companies were told from the start that they would have to pay the same per-acre price as the city. Hirshon said his client offered to pay about $78,000 per acre.

City officials said the Lucas deal appeared to be dead last month, with the option running out on Dec. 31, when New England Metal Recycling stepped forward and agreed to buy all 13 acres for $1.5 million.

Urban said New England Metal is willing to buy less land if E. Perry wants some of it. New England Metal occupies less than 1 acre on Somerset Street. E. Perry occupies just over 2 acres on Lancaster Street. The two companies would split the 13 acres on Riverside Street.

However, Hirshon said, his client is balking at the transaction, in part, because New England Metal is now trying to control competition by limiting the kinds and amounts of metals that E. Perry could handle at the Riverside Street location.

If E. Perry doesn't move to Riverside Street, Urban said, city officials hope the demand for commercial and residential real estate in Bayside will make it attractive for the company to sell and move. Urban said city officials aren't considering taking E. Perry's land by eminent domain.

Under the deal approved Monday, the city will use federal money to buy New England Metal's Bayside land, which was most recently appraised at $645,000.

The city must pay its $5 million debt to the land trust within three years. City officials will use the $1.5 million from the sale of 13 acres to the scrap yards. An additional $1 million would come from the recently approved sale of city land on Marginal Way to developers who plan to build an office building and student housing.

The city plans to raise an additional $2.5 million by selling 6.5 acres of former railroad land in Bayside, on Somerset Street. That land, appraised at $4.5 million, was acquired recently from the Maine Department of Transportation. The land trust will hold the deed on the former railroad land as collateral until the city sells it.

The council also approved a zoning change that will allow scrap yards on 5 acres of the Riverside site.

Staff Writer Kelley Bouchard can be contacted at 791-6328 or at: kbouchard@pressherald.com