KITTERY (AP) – The future of the empty naval prison at the Portsmouth Naval Shipyard remains in limbo four years after the death of a developer who planned to transform it into a technology business center.

Since the massive facility closed in 1974, developers have talked about converting it into everything from a luxury hotel to a gambling casino.

When he died in 2000, developer Joseph Sawtelle of New Castle, N.H., was in the process of transforming the prison into the Seavey Island Technology Center as part of a 10-year lease with the Naval Sea Systems Command.

Sawtelle’s death, followed by the Sept. 11 terrorist attacks and the economic downturn in the high-tech industry, essentially put an end to that proposal. No other developers have come forward with other proposals that complement the Navy’s goals and security needs.

“The Navy currently has no specific plans to outlease the former Portsmouth Naval Prison or any other Shipyard facility,” said shipyard spokeswoman Danna Eddy. “Outleasing initiatives have been slowed due to economic conditions as well as security considerations and their potential cost impact.”

The prison opened in 1898 to house prisoners of war from the Spanish-American War. By the time it closed in 1974, it had held more than 82,000 men over the span of five wars.

Some of those POWs included German crews of captured U-boats during World War II. During the 1950s, 400 Army prisoners were housed there due to overcrowding in the Army’s prison system.

Sawtelle had successfully developed millions of square footage of abandoned mill buildings in Portsmouth, Dover and other New Hampshire towns into thriving residential and commercial centers when he proposed doing the same for the prison.

Under his proposal, the prison’s fortress wing would have been turned into multimillion-dollar office space that could have attracted high-tech companies and brought 1,000 new high-tech jobs.

The plan was wholeheartedly embraced by the Navy, the New Hampshire and Maine congressional delegations and the business community. Capt. Kevin McCoy, commander of the shipyard, still believes a technology center would be a good option for the prison.

“It still makes good sense now,” said McCoy, who is scheduled to leave the shipyard in October. He is being transferred to Washington and promoted to rear admiral.

But Mark Phillips, a commercial real estate developer from Newington, N.H., said he would be reluctant to work with the Navy again on any outleasing projects because he found the bureaucracy too frustrating.

Phillips was formerly affiliated with Seavey Island, LLC.

When Sawtelle negotiated a 10-year lease with the Navy to develop the prison, it opened a window to great economic growth potential, Phillips said. But when Sawtelle died, other developers who wanted to continue the project were stymied when the Navy would not give them a 25-year lease.

While Sawtelle believed he could see a return on his investment in 10 years or get a lease extension, Phillips said other developers wanted more time.

When Pease Air Force Base closed in 1991, the development authority that created the Pease International Tradeport that exists today gave private companies 25- to 50-year leases so they could recoup their investments, Phillips said.

“That is something they, the Navy brass, still do not understand,” Phillips said.

If the prison was fully outfitted and ready to go as far as its infrastructure is concerned, Phillips said a 10-year lease might work. But because the building is an empty concrete shell, it could take up to 10 years just to get it ready to lease before it could be marketed.

AP-ES-09-06-04 1402EDT

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