The epicenter of the political brawl over the Land for Maine’s Future program literally looms behind the State House.

For the land trust that paid nearly $1 million for the property, preserving Howard Hill means protecting the forested backdrop of Maine’s Capitol from development, while providing public access to 164 acres of trails, ponds and woods. To Gov. Paul LePage, whose office and Blaine House residence are just a few thousand feet from the property’s edge, the project epitomizes his distaste for taxpayer-backed land conservation and distrust of Maine’s environmental community.

“These are the types of projects that should not be allowed to go through and it’s just a rip-off,” he said in a recent radio interview.

Last week, LePage reversed course on his nine-month pledge to withhold funding for the Land for Maine’s Future program, announcing plans to sell $11.5 million in voter-approved bonds next year. But the governor has not softened his much-disputed portrayals of the LMF program as catering to the rich, or his harsh attacks on the Howard Hill project, which is in line to receive $337,500 of that $11.5 million.

Gov. Paul LePage

And while project backers say they expect to receive their share of the LMF funds, speculation is swirling that LePage may still try to block the flow of money to Howard Hill before it receives final approval.

The governor brings up the project nearly every time he talks publicly about LMF – even if he rarely mentions it by name – and couches much of his opposition to the entire program around his objections to Howard Hill.

Chief among his criticisms is that the Kennebec Land Trust paid $925,000 – or $1.2 million in total project costs – for a wooded property that the city of Augusta has assessed at $171,000.

“It’s the culture of status quo: You rub my back, I’ll rub your back and we’ll make some money,” LePage said on WVOM-FM last week.

But land trust representatives as well as LMF advocates say the governor’s opposition is based on a misunderstanding of how the program works – most notably, that bonds from LMF projects guarantee recreational access to land for all of the public, not just for the wealthy. They also point out that appraisals for prime parcels are often based on the potential real estate development value of the land, or “the highest and best use,” not on a generic per-acre value that reflects how the land is currently used.

In the case of Howard Hill, the land trust paid a company owned by Sumner Lipman – a prominent local attorney and former Republican legislator – $925,000 for a property appraised at $1,090,000 based on its development potential in the heart of Augusta, not as 164 acres of standing timber.

Sumner Lipman

“We receive a lot of land by donation, but we sometimes have to buy land at full value and sometimes we are able to get land at a reduced price,” said Howard Lake, a board member and volunteer attorney for the Kennebec Land Trust. “It’s the backdrop to the State House, and we think it is somewhat significant. To have high-end homes in those 164 acres or to have all of the wood cut down … would really diminish the backdrop of the State House.”

RIGOROUS APPRAISAL PROCESS

Created by voters as a way to preserve valuable forestland, farmland and working waterfronts, the Land for Maine’s Future program has protected more than 570,000 acres of land across the state since 1987.

Project applicants are required to match every dollar from LMF with funds from private or federal sources, and LMF funding often accounts for an even smaller portion of the total cost.

Regardless of the share borne by taxpayer funds, all project applicants must submit a detailed appraisal prepared by an independent, professional appraiser to the LMF board for review. Members of the board’s Appraisal Oversight Committee – which currently has two appraisers among its five members – then review the document before making a recommendation to the full board.

The “Appraisal Standards” of the official LMF workbook for project applicants states that any appraisal report “shall state the highest and best use that can be legally made of the property for which there is a current value.” (That phrase, “highest and best use,” is standard technical language for the potential market value of real estate.)

Tim Glidden, a former director of the LMF program who now serves as executive director of Maine Coast Heritage Trust, said board members and other staffers carefully scrutinize appraisals to ensure the program isn’t paying too much for land. That philosophy has been a hallmark of the program since its inception, said Glidden, whose organization is one of the state’s largest land conservation groups.

“They don’t want to drive up the market by buying property at inflated prices, so the LMF board has always really scrutinized these appraisals,” Glidden said. “I think in the 10 years I was there (as LMF director), it was a rare appraisal that didn’t come back with some questions about it.”

‘SUPERIOR’ DEVELOPMENT POTENTIAL

Located less than a half-mile from the State House complex, Howard Hill was named for Augusta’s first settler, Capt. James Howard, and was once owned by the Gannett family, which also owned several media outlets in Maine, including the Portland Press Herald.

The Gannett family built carriage paths and trails on the land, some of which are still usable today through several “informal” access points.

Lipman purchased the 164-acre property in several parcels between 1989 and 2009. An Augusta native, Lipman has put the property up for sale several times in recent years with an asking price of as much as $1.5 million.

Members of the Kennebec Land Trust began working on potentially purchasing the property more than five years ago. And despite LePage’s now-vocal objections, the project’s LMF application is sponsored by a branch of the state government.

The State House complex as seen from the top of Howard Hill
Joe Phelan/Kennebec Journal

“From a habitat perspective, Howard Hill contributes to the protection of a relatively large intact block of wildlife habitat within an urban environment,” the Maine Department of Inland Fisheries and Wildlife wrote in a March 2014 letter of support to the LMF board. “The property is known to support habitat for deer, moose, fox, wild turkeys, grouse and many songbird species. Howard Hill also provides a unique and much-enjoyed destination for bowhunters, a rare opportunity for hunting within relatively close proximity to the city center.”

The land trust closed on the purchase earlier this year, after securing a $500,000 loan from a bank to cover the $337,500 of LMF funds authorized but not yet distributed to the project as well as additional funds the land trust is still raising to cover the full costs of the acquisition.

But the trust would have to fill that hole with private funds if LePage somehow prevents money from flowing to this particular project, despite agreeing to sell the $11.5 million in LMF bonds.

The city of Augusta approved a 53-lot subdivision on approximately 109 acres of the property in 1987, with the remaining 55 acres dominated by rugged hills that would be more challenging to develop.

In the independent appraisal submitted by the Kennebec Land Trust, appraiser Jesse Studley wrote that the property “has excellent development potential” due to its location, zoning, access and preapproved subdivision lots. The tract’s southern end borders Hallowell, which is already a local real estate hot spot.

“The surrounding established residential neighborhood and the ongoing development just to the south of the property in Hallowell indicate that demand for premium, larger lots on the subject property would be in high demand if prices were reflective of market expectations,” reads the May 2015 appraisal. “If put on the open market the subject property would have little competition as its location and development potential are superior to most properties currently on the market or that have recently been listed for sale.”

GOVERNOR’S ASSESSMENT: ‘IT IS CORRUPT’

Studley’s report calculated the per-acre value as $6,646, based on those factors and sales prices of comparable properties in the region.

LePage disagrees and has accused the land trust of attempting to milk taxpayers.

The governor has said repeatedly – both at public “town hall” meetings and in interviews – that an independent appraiser who evaluated the land at his request told him Howard Hill was worth roughly $1,000 an acre. But the administration has refused to release any supporting documentation to the Portland Press Herald or to other interested parties.

“I am not going to sign off on a bill that is going to give 164 acres to a town and two people are going to get a half-million dollars each,” LePage said at a Dec. 8 public forum in Portland, responding to audience members urging him to release the frozen LMF bonds. “I think that is gouging the taxpayers of the state of Maine and I won’t do it because it is corrupt.”

Lipman did not return a call seeking comment.

It is unclear who the second person is – in addition to Lipman, the sole owner of the property – that LePage suggests profited from the $925,000 sale. But many people have speculated that LePage is referring to Roger Katz, the Republican state senator from Augusta who was Lipman’s former partner at the Lipman & Katz law firm.

Sen. Roger Katz

Katz has been an outspoken critic of LePage’s attempts to use the LMF bonds as political leverage to win legislative support for a separate plan to divert timber harvesting revenues to a home heating assistance program.

In fact, Katz sponsored a bill during the 2015 legislative session in response to the LMF controversy that would have required governors to sell voter-approved bills except in certain circumstances. The bill passed both chambers of the Legislature but failed after the House fell six votes short of overriding a LePage veto.

A moderate Republican from Augusta occasionally mentioned as a potential gubernatorial candidate, Katz has also drawn LePage’s ire as co-chairman of the Government Oversight Committee, which investigated whether LePage abused his power by pressuring a nonprofit school to rescind its job offer to House Speaker Mark Eves, D-North Berwick, to serve as its president.

LePage has openly disparaged Katz, and called him “my enemy” during a May radio interview.

Katz said last week that he had no financial interests in the Howard Hill project and expressed disappointment that LePage is criticizing Lipman when he actually sold the land for a below-market price. Katz said he was unsure why LePage was focused so heavily on the Howard Hill project but said his own interest in the LMF issue is that no governor should have the ability to hold up voter-approved bonds for political reasons.

“I felt and still do feel very passionately about this LMF issue that, from a good government perspective, once the people have spoken, no one should have veto power over that,” Katz said.

LePage’s decision to sell $5 million in bonds next year – as well as an additional $6.5 million, if reauthorized by the Legislature – means that money could soon be available to Howard Hill and roughly 30 other LMF projects already approved by the board.

In announcing his intentions, however, LePage rebuked lawmakers for blocking his proposal to harvest more timber on state-owned lands to help pay for a home heating assistance program. He also vowed to continue “managing our state’s debt and rooting out greedy politicians.”

“You are content to watch seniors and other poor Mainers freezing in their homes while you cater to special interests so the rich can enjoy walking trails and scenic views funded by the taxes of the very people you refused to help,” LePage wrote to Eves and Senate President Mike Thibodeau, R-Winterport.

WILL THE PROJECT BE BLOCKED?

The question now is whether LePage will allow the LMF board and staff to resume their normal work or, as some suspect, will work behind the scenes to attempt to block the Howard Hill project from receiving the LMF funds.

Theresa Kerchner, executive director of the Kennebec Land Trust, said she was told by LMF staff last week that the final review of the project’s paperwork would begin in January. She anticipates that the Howard Hill application “will be reviewed in the same way that other projects will be.”

“As far as I know, unless there is something running behind the scenes that I’m not aware of, it is on track,” Kerchner said.

Lake, the land trust’s board member and volunteer attorney, said he was discouraged by what he regarded as the governor’s “disregard for the facts” about the value of the land and his contention that LMF benefits largely the wealthy.

It will be the residents of Augusta but especially those from the neighborhoods surrounding the State House and the Howard Hill property – a mix of mostly modest, single-family homes and apartment buildings – that will likely use the property the most, Lake said.

“We would love to take him for a walk on the property, which is just up the hill from his house,” Lake said of the governor. “We would love to show him the value of the property.”

Correction: This article was updated at 10:35 a.m. on Dec. 20, 2015 to reflect that the Kennebec Land Trust received a $500,000 loan in order to close on the purchase of the Howard Hill property.