October 7, 2008

Portland Approves Island Hotel-Condo


Portland city councilors on Monday approved a controversial $6.5 million hotel-condominium project on Great Diamond Island.

The approval means that a grass-roots effort to keep The Inn at Diamond Cove from being built now shifts to Cumberland County Superior Court.

David Bateman plans to build a 32-unit hotel-condominium on the site of Fort McKinley in the Diamond Cove neighborhood.

Portland seized the crumbling barracks and hospital property in 2005 because of unpaid property tax bills from the previous owners.

City officials sold the rights to buy and renovate the property to Bateman last year for $1, an effort that some historic preservation advocates saw as the best chance to save the aging buildings.

The structures housed soldiers during World War II and are listed on the National Register of Historic Places.

City Councilor Cheryl Leeman said the project would restore a key piece of property that "probably has no other way of being rehabilitated."

Other supporters said the project also would create jobs and provide property tax revenue for the city.

But it faces opposition from some residents and island advocacy groups, who are concerned that the project, backed by the Hart Hotels hospitality management company, would bring too many short- term visitors to Great Diamond and ruin island life.

Traditional residential condos would take too long to sell to turn a profit, given the amount of rehabilitation the buildings need, said Bateman, who is the original developer of Diamond Cove.

He said so-called "hotelminiums" sell quickly because they give condo owners access to the type of amenities typically offered by hotels, as well as the ability to rent their units to guests through a property management agency.

"People who buy the units do make money; they're a profit-making venture," said Bateman, who added that he has lined up buyers for most of the 32 units and is confident of financial backing to build the project.

The developer needed council approval to move forward with the complex because the hotel use, a swimming pool and a new building for bar service in the area were outside what zoning rules allowed in Diamond Cove.

Councilors voted 6-2 in favor of an amended version of the proposal, with Jill Duson and Kevin Donoghue opposed and James Cohen not voting because of a professional conflict of interest.

The council specified that the condo guests and owners would not be allowed to drive automobiles or golf carts off Diamond Cove - an issue in the past.

Bateman's opponents have another chance to scuttle the project.

A group called The Friends of Great Diamond Island filed a lawsuit in late August asking a judge to effectively block the project, alleging that the city improperly cast ballots in a homeowners association vote that gave Bateman clearance to build a type of project that was, until then, prohibited in Diamond Cove.

The Diamond Cove Homeowners Association approved the project during the summer of 2007 by just three votes.

The city cast 23 votes in favor - ballots it claimed when it took ownership of the property.

The lawsuit says the city never should have voted in the election because it never owned the buildings.

Portland officials made technical errors on the tax lien certificates they used to seize the property - in one case misspelling the name of the owner - and never paid association dues, invalidating their ownership claim, the lawsuit says.

City officials dispute those claims. A hearing date for the lawsuit has not been set.

Staff Writer Elbert Aull can be contacted at 791-6325 or at:

[email protected]

Originally published by By ELBERT AULL Staff Writer.

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