$4mm Property Sold by City for $1.15mm, Unionization Row, and Referendum Hearing – City Council Review 03/06/23

This City Council meeting of March 6^th was moving through its agenda smoothly, until one controversial exception put Councilor Andrew Zarro in opposition against his colleagues.

All councilors were present this evening, with Councilor Pious Ali joining virtually. An active public comment period, free to remark on any topic not on the night’s agenda, brought multiple issues to the fore. 

Public Comments

First to speak was Jill Gruber, an employee at the mental health nonprofit Shalom House. Gruber spoke on the Shalom House staff’s ongoing effort to unionize; an effort, she said, currently facing “harsh opposition” from the employer, and these opposition measures have, per Gruber, created a “hostile environment for employees.” Gruber referenced the successful unionization of staff at nonprofits Planned Parenthood and the ACLU of Maine, and asked that city council show support for the Shalom House workers by contacting the organization’s administration and calling out their anti-union behavior. 

The next comment came via Zoom from Richard Ward, a Parkside resident and unsuccessful City Council candidate. Ward thanked supporters of his “It’s OK to be White” banner, which has been at the center of recent standoffs in Congress Square Park. He then criticized the City Council for being “anti-white” and claimed that council members were lying about receiving hateful emails. Ward claimed also that the council’s extensive coverage of his event has brought him significant publicity and notoriety.

Grace Nichols, of Casco Street, was the third comment of the night. Nichols spoke in support of the Fossil Fuel Non-Proliferation treaty, an agreement which would “stop the expansion of fossil fuels and manage a global just transition away from coal, oil and gas,” according to the Treaty’s website. Nichols encouraged the city of Portland to sign on in support of the Treaty.

Another Zoom comment came in from a Tom Dillon in District 4. Dillon expressed concern that members of City Council might be “socialists or communists,” and criticized those who were seated during the Pledge of Allegiance at the meeting’s start. Given the onslaught of right-wing trolls calling into last week’s meeting under false identities, it is plausible that this comment falls into that category.

West Bayside resident George Rheault then commented, again via Zoom. Rheault requested a motion to reconsider the North Deering Park project, a much-discussed topic in last week’s Council meeting. In that meeting Rheault stated his reasons for opposing the project; this week, his comment focused on a perceived conflict of interest surrounding the proposed park. Rheault referenced the Land Bank Commission meeting from December 9^th, 2020, in which Simon Rucker, who sits on the Commission, stated that he personally knew the people who approached the Commission about selling them the land. Rheault urged the Council to make the public aware of the relationship between Rucker and the sellers, and delay acting on the park until doing so. The Townsman has independently verified that this exchange did take place at the December 9^th meeting.

Another Zoom caller, who identified with a vulgar name, made the final public comment, but was ultimately cut off due to his use of profanity.

Agenda Items

The meeting agenda progressed steadily after the public comment period; Mayor Snyder recognized March as Women’s History Month, and Jessica Hanscombe, Director of Permitting and Inspections, presented Communication 26, a minor, technical clarification on the proper use of outdoor dining spaces by restaurants.

The council moved to consider Order 145, Setting a Public Hearing on a Citizen Initiative Re: An Act to Improve Tenant Protections. Prior to any Council discussion or public comment, Mayor Snyder emphasized that Order 145 is only concerned with the date of the public hearing for the citizen initiative, and not the content of the initiative itself. Rheault was the only public comment, voicing that a Saturday afternoon meeting might ensure higher turnout at the hearing; while Snyder and other councilors expressed appreciation for the comment, the Council ultimately adhered to the original hearing date of Monday, March 20^th, the next Council meeting. Snyder also highlighted that public comments can be submitted via email to the Council for those who are unable to attend in-person or virtually.

Sponsored by the Rental Housing Alliance of Southern Maine (RHASM, formerly known as the Southern Maine Landlord Association, established in 1975,) the initiative proposes an amendment to Portland’s rent control laws. At the March 20^th hearing, the council will almost certainly vote to put this amendment onto the June ballot.

Because Portland’s rent control ordinance was implemented by referendum in November 2020, the city council does not have the authority to amend the law and shall not until 2025. It is constitutionally unclear whether the council’s right to “Adopt-and-Amend” new ballot initiatives overrides this provision or not – but it probably does not. At these referendum hearings, like the one now scheduled for March 20^th, the council’s only paths are to put the initiative on the ballot and let the voters decide – or to enact it immediately. This latter option, which would avoid the usual 5-year ban on legislative amendment, was considered by the council for 2022’s Question E, but this failed to secure the necessary council votes. Question E, which concerned cruise ships regulations, would go on to fail at the ballot box.

Since the “Adopt-and-Amend” option is probably off the table, unless the council wants to invite a risky legal action against it, the only other choice is to put the RHASM’s proposal on the ballot. The charter provides no other path to take, unless credible evidence were to surface that the petition was somehow illegitimate.

So what does this initiative actually do?

In the coming weeks, the Portland Townsman will be publishing an examination of rent control in Portland and South Portland, proposed changes to these laws, and the state of referendum politics. The full text of the proposed amendment from the RHASM is brief, the full text as to be included in §6-233 of the city code follows:

(c) Base rent upon new tenancy following voluntary termination. If the Tenancy of a Covered Unit is terminated voluntarily by a tenant, the landlord may establish a new Base Rent at their discretion. Voluntary termination occurs when a tenant decides to return the leased premises to the landlord before the expiration of the lease or determines not to renew a lease. The Housing Safety Office shall investigate any report that a tenancy was not terminated voluntarily by the tenant, or that the tenant was coerced or unreasonably influenced by the landlord to terminate the tenancy. Any tenancy in which the property owner served the tenant with a notice to quit or summons and complaint for forcible entry and detainer shall not be deemed to be a situation in which the tenant voluntarily terminated the tenancy

The proposal would also strike §6-234(b)-2, which contains contradictory language.

Put more simply, the proposal allows landlords to freely set rent prices for their units after a tenant voluntarily terminates or declines to renew their lease. This change would not apply to continuing tenants or to cases of eviction. Currently, in such cases of voluntary vacancies, landlords are restricted to an increase of 5% of the base rent. In both the current DSA-sponsored ordinance, and the proposed RHASM-sponsored amendment, it is the duty of the Housing Safety Office to investigate any “voluntary” vacancies which were in fact coerced. 

Critics of the RHASM allege that placing this referendum on a June ballot, which typically has lower turnout than November elections, is an attempt to circumvent the popular will. Defenders, however, have pointed out that this June 2023 election is simply the next election after the most recent one in November 2022, which implemented further regulations on rental housing by referendum. Both, of course, could be true. Furthermore, the messaging surrounding this ballot measure – specifically titling it “An Act to Improve Tenant Protections,” when the content of the initiative is concerned with loosening the constraints of the rent control ordinance – has been characterized as misleading, as have the titles of other referenda in recent years.

Saving this discussion for March 20^th, the Council moved on to the next agenda item, which turned out to be the most hotly-debated item of the evening. Order 146, Approving the Purchase and Sale Agreement between 144 Fore St. OZ LLC and Portland re: Thames Street property, brought the issues of housing and land use to the forefront once again. 

To sell, or not to sell?

The land in question is currently a parking lot owned by the city. In 2021, the city made a Request for Proposals for the sale of the property. The only submission came from 144 Fore Street OZ LLC, and as such, theirs was the winning bid. The terms of the agreement include $1.15 million paid to the city, five city parking spaces, a public restroom in the new building, and the acquisition of Freedom Way, a small private road connecting Thames Street and Fore Street. The total value to the city, per the agreement, is $2.69 million.

Many councilors, as well as the sole public commenter George Rheault, expressed opposition to the terms of the agreement, but the most vocal of the opponents was Councilor Andrew Zarro. 

Zarro questioned several aspects of the sale. First – the price, it seemed low. Had an appraisal been performed?

As it turned out, yes. The appraisal value, as of April 2021, was estimated at $3.9 to $4.1 million – a hefty sum higher than the $2.69 million figure, let alone the $1.15 million in cash, cited in the agreement. Whether five parking spaces, a restroom, and a small road are actually worth $1.54 million to the city was also questioned.

Second, Zarro asked why no housing was included in the building plan, despite this being a top priority for the Council and the fact that there is housing “right across the street.” Corporation Counsel Michael Goldman and Interim HED Director Mary Davis testified that there were no responses to the Request for Proposals (RFP) that included housing.

Zarro seemed dissatisfied with these responses, highlighting that this piece of land is the last city-owned waterfront property, and addressing the housing shortage was a stated aim of city government.

At this point, Councilor Mark Dion argued in favor of the order, bringing up the lengthy negotiations that had already occurred in order to finalize the agreement. “We have a responsibility to the business community,” said Dion, to offer “predictability and consistency” in the process. 

During the course of discussion, Dion stated that he shares his colleagues’ concerns about housing, but ultimately believed that it would be unfair to further delay the sale. Zarro clarified that he is not advocating for postponing the sale, but rather, is concerned that valuable land is being used for commercial office space and not housing – which is a much more urgent need. This was taken to mean that he advocated for killing the sale entirely. “This, for me, isn’t it.”

Dion further said that as housing was not a part of the original RFP made by committee, it would be unfair to expect it now. Zarro fired back that when the RFP was first made, he had insisted on housing being a part of the goal. “We have massive, vacant office spaces, and a housing shortage.”

“We have massive, vacant office spaces, and a housing shortage.”

Councilor Zarro

As an editorial check on this statistical claim made by Councilor Zarro, the Townsman has found that industry estimates put the office vacancy rate of Greater Portland at 6.73%, which while not as low as they’ve been in the past, would be hard to construe as ‘massive.’ However, some subcategories of office space do have much higher vacancy rates, with “Class B” offices at 13.32% vacant.

Nevertheless, the housing shortage is absolutely a statistical reality, with 2022 estimates placing the vacancy rate at just 4.4% – a shocking figure which has undergone greater analysis at the Townsman.

Councilor Zarro went on to castigate the process which had led to this, calling it a “missed opportunity.” He stood firm to the end, as the sole vote against the sale in an 8-1 vote in favor. This evening he went on to share his thoughts further with his constituents on Instagram.

Final Items

The final three agenda items – Order 147, Order 148 and Order 149 – were all items that required reading on two dates, the March 6^th meeting being the first reading. As such, the public comment and Council discussion of these items will occur at their second reading on March 20^th. These concern budgetary appropriations and a minor rezoning to the benefit of Allagash Brewery. 

Before adjournment, Mayor Snyder called attention to the two upcoming council workshops, both on Monday March 13^th. The first, on the FY24 budget, will be at 5:00pm, with the second, on Clean Elections, taking place at 6pm. Both are open to the public, and Mayor Snyder invited all to attend.

On that abbreviated note, the Council moved to adjourn a short but fiery council meeting at about 6:00pm.

Erica Snyder-Drummond – Erica is a proud Portland resident, documentary filmmaker, and baker. Previously she has been a campaign canvasser, an immigration advocate, and a server. You can see more of her work at www.ericajsd.com.