LEWISTON – The city may be about ready to walk away from Bates Mill, according to City Administrator Jim Bennett.

Negotiations with developer Tom Platz and his group Bates Mill LLC have gone well, especially in the last three months. Bennett said he anticipates bringing a deal before the public and the City Council in October. That will be the first time the public has seen the deal since negotiations began one year ago.

“Everyone agrees in concept, but there are a lot of details,” Bennett said. “It’s been up to the legal staff now, and they’ve been working those details for some time. But we want to have those documents complete before we bring them before the public.”

But Bennett cautioned against sticker shock. Walking away from the mill promises to be expensive because of the way the current deal is structured, he said.

“The city has tremendous liability in the mill right now based on the current deal,” Bennett said. “We also spend a lot of staff time and city resources.”

The city continues to spend an estimated $800,000 per year managing the mill. Most of that is spent in the fall and the winter paying for heat in the complex. The rest pays for insurance, security and building association fees.

But it doesn’t provide for new development or contract requirements, he said. For example, the city is required to provide parking for new tenants whenever they move in.

Bennett said his plan would set an upper limit on the costs the city would pay to support continued mill development and parking.

“That would still be a large amount of money,” Bennett said. “It’s still going to be expensive, but it won’t be as bad as if we left things the way they are now.”

Negotiations began last fall, with Bennett telling councilors the city needs to focus on developing Mill No. 5 and get out of the rest. The city took over ownership of the property in 1992 and has been renovating mill buildings and selling them to Platz Associates since then.

Platz and his partners have purchased mills 3, 6 and 7 from the city for $2 million and also reimbursed the city $3 million that it spent to rehabilitate Mill No. 3. Platz also committed $10 million to finish that mill and to improve Mill No. 6. The developers have options to purchase the remaining buildings, including Mill No. 5.

“We spend money to renovate the outside of the building as well as the inside,” Bennett said. “But when we sell the property, we are only compensated for the work we’ve done inside.”

Bennett said it makes sense to get the whole complex under one owner. For example, city renovated property ends up competing with Platz property at the mill for tenants, he said.

“They have Mill No. 3 they’ve just finished and they’re looking to fill that space,” Bennett said. “Potential tenants end up looking at both spaces before deciding. That doesn’t make sense.”

staylor@sunjournal.com

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