OTISFIELD — Heniger Park camp owners say they would support a long-term lease proposed by town officials, who are hoping to get fair market value from expiring park leases and increase the tax base in town.

The Heniger Park Reassessment Committee will detail its plan during an informational meeting at 7 p.m. Thursday, May 15, in the Community Hall on Route 121.

The offer is a 99-year lease to leaseholders who agree to terminate their current 50-year lease in writing between Jan. 1 and June 30, 2015.

Lessees and other taxpayers are encouraged to attend the session to learn how the plan could add $100,000 to the tax base in Otisfield. Selectmen have stressed that all taxpayers will be affected by what happens at Heniger Park and should voice their opinions.

In a statement released this week by the lessees of the three dozen Heniger Park lots on Pleasant Lake, the group said, “The planned increases will definitely be painful for all and unaffordable for some. That said, we understand the town’s desire to gain fair market value from Heniger Park leases. We are greatly encouraged by the proposal of 99-year leases and welcome the resulting opportunity to partner with the town in the long term. We look forward to collaborating on the remaining lease terms.”

In addition to the extension of the lease, the committee will recommend that a land capitalization value of 2.2 times the assessed value be used to determine the lease amount on each lot. They are also recommending the lease fee increase be adjusted.

The decision to use a land capitalization formula was recommended by Daniel Dwyer, an Augusta-based real estate appraiser/consultant hired to help develop new lease agreements. Of the 37 lots, holders of 13 leases will expire in 2015. The rest expire before 2032.

The Heniger Park Reassessment Committee was formed last year to decide what to do with the leases once they begin to expire next year. Members have said they could not support an annual land lease rate that is not equitable with what other camp owners on Pleasant Lake are assessed.

According to town assessor records, assessed values of lakeside lots not under the Heniger Park lease agreements ranged from $206,783 to $213,005 for front lots to $44,340 for back lots.

In October of 2013, the committee came up with a plan that lessees said would double the current tax rate and quadruple the back lots. The fee for lakeside lots would be $4,907, while back lots would be $2,048.

Lessees countered that they did not believe the plan was equitable, and that it could force many out of their camps. The October 2013 plan was scrapped.

The 100-acre parcel of mostly wooded land on Pleasant Lake was left to the town in 1943 by noted Broadway producer Jacob Heniger. His will stipulated that the Board of Selectmen decide what would be done with the real estate.

In 1965, the board drew up agreements allowing people to lease the lots for fees ranging from $0 to $50 per year for 50 years.  Each agreement differed. Leaseholders were also allowed to build camps, and most did, paying taxes on the full value of structures.

In 1992, selectmen began leasing lakefront lots at the current mill rate based on $30,000 value and back lots at $15,000. The change came following a 1991 court settlement.

Lease payments are still calculated by the assessed land value of $15,000 for back lots and $30,000 for lakefront lots, which is then multiplied by the tax rate of $11.55 per thousand dollars or property value. The lease fee of $0 to $50 is added to that amount.

For example, Lot 1 is a lakefront lot assessed at $30,000. Multiplied by the 2014 tax rate of $11.55, plus the $50 fee, means the camp owner is paying $396.50 to lease the land. The camp owner also pays a tax on the assessed value of their building or buildings.

For a back lot, which now has a $15,000 assessed value, the owner pays $173.25, plus the lease fee of between $0 and $50. The tax for a structure or structures is separate.

The total lease payments for the town for fiscal yer 2014 is $9,528.75 under the current lease arrangement for lease of the land only. That same figure, if all 37 lots were currently under this proposed lease arrangement, would be $100,551.35, according to information from the committee.

The committee’s final recommendations will be presented in an article for the annual town meeting in June.

The vote is nonbinding to assist selectmen in their analysis of the upcoming lease expiration.

Once approved, selectmen will forward the information to the town attorney for final legal approval and the development of the new lease and lease termination documents.

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