LIVERMORE FALLS — Developer Kevin Bunker said he has received a $400,000 loan from the Maine Rural Development Authority to go forward with redeveloping the Lamb Block into a health clinic and offices.

As collateral, he said he used a letter from Gov. Paul LePage that said bonds would be issued in that amount by June 20, 2015, to repay the loan.

The loan covers a financing hole left when Gov. Paul LePage announced he would not issue $3.5 million for the Communities for Maine’s Future Program, which was part of a $25 million community development bond approved by voters in 2010. The money was to help pay for revitalization projects in 11 towns.

Livermore Falls Town Manager Kristal Flagg said Tuesday that the town did not receive the money, which selectmen had planned to loan to Bunker for his project to help revitalize the town. The town lost a paper mill in 2009.

Bunker said Tuesday that he needed to move ahead right away or his project would have fallen apart. The founding principal of Developers Collaborative in Portland and principal in Lamb Block Associates LLC in Livermore Falls plans to invest about $2 million in the project. Redevelopment includes putting in a health clinic on the third floor for a federally qualified HealthReach Community Clinic. There would also be offices.

The building is next to the new Androscoggin Valley Medical Arts Center that Franklin Memorial Hospital of Farmington owns.

“I needed to have the project done by the end of the year for HealthReach to move into,” Bunker said. “I couldn’t sit around and wait for the governor to release bond funds. I had time constraints.”

The governor issued a letter on July 16 to Maine State Treasurer Bruce Poliquin, and Bunker received a copy.

LePage wrote, “This letter serves as my commitment that I will direct, on or before June 20, 2015, the Office of the State Treasurer to issue bonds in the amount of $400,000″ as it relates to a contract between the State of Maine and the Town of Livermore Falls, Maine.”

Bunker said he took the letter to Maine Rural Development Authority, and its board agreed to loan him the $400,000.

John Cleveland, executive director of the Maine Rural Development Authority, said Wednesday that the authority received money from the state through a bond to use as capital to make commercial loans in a revolving loan program. He said the board agreed to loan Bunker the money.

“This was a project if it did not begin right away soon, the whole project would have died,” he said. “The intention is when the bonds are sold they would be used to pay off the loan.”

LePage spokeswoman Adrienne Bennett said Wednesday that three other communities that expected to receive funding for projects are either in the process or have been qualified for other funding such as Community Block Development Grants.

“The state is ready and willing to help these communities, and we have demonstrated it,” she said. “What we really want is town officials to reach out to us to find a solution because they are our customers.”

The state has more than $40 million in authorized bonding for a variety of projects. Under Maine law, the governor would need to sign these loans on behalf of the state to sell the bonds and spend the money.

Maine is spending more than $100 million a year through the end of fiscal 2013 on debt services from already-issued general obligation bonds, not counting other bills owed, according to a letter the governor wrote to Commissioner George Gervais of the Department of Economic and Community Development in June. He advised him not to budget for bond revenues without his approval.

“It is our duty as public servants to ensure each taxpayer dollar is spent appropriately to earn the highest return at the lowest cost,” LePage wrote. “That is especially true when we are spending borrowed money that has to be paid back by future taxpayers, with interest.

“Until our debts and more importantly, our spending are back under control, adding more of a burden would be fiscally irresponsible,” LePage wrote.

“Each of the projects that these bonds provide for may be worthwhile and if you are able to pursue them without debt, I am happy to work with you on the way forward for that,” the governor wrote to Gervais. He also stated that the earliest he currently believes it would be prudent to issue new bonds is January 2014.

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