OTISFIELD — The Board of Selectmen has agreed to make minor changes to Heniger Park land leases to clarify some of the terms for tenants and the town.

There will be no further opportunities for changes, board members said.

“The clock’s running. We feel the process has unfolded,” Micklon said.

Selectmen and members of the Heniger Park Reassessment Committee worked the past two years to increase lease fees to reflect what they say is fair market value for all Pleasant Lake camps — whether on leased land or not.

Heniger Park, the 100-acre parcel of mostly wooded land on the west shore of 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 37 lots for fees ranging from $0 to $50 per year for 50 years. Leaseholders were allowed to build camps, and most did, paying taxes on the full value of structures, but not on the leased land.

The leases expire between 2015 and 2032.

In June 2014, voters supported selectmen offering new agreements to 37 leaseholders. The new agreement grants 99-year leases if leaseholders agree to terminate their current 50-year contract in writing between Jan. 1 and April 30, 2015. The leases will be effective July 1, 2015, unless environmental conditions must be remediated.

The current 50-year leases are calculated on an assessed value of $15,000 for back lots and $30,000 for lakefront lots, which is multiplied by the current tax rate. The lease fee of $0 to $50 is added on.

Under the new agreements, the value for lakefront lots is $213,000 and back lots to $44,340. Instead of multiplying the land value by the tax rate, a land capitalization rate of 2.2 percent is applied as the lease fee. It is expected to increase taxes on the lots from $9,528 to $100,551 annually, based on the current tax rate.

Buildings on the lots are taxed at the rate of $12 per thousand dollars of assessed value.

Leaseholders have argued that the increase is unfair, in part, because they do not own the land, making it difficult for them to sell their camps.

Of the 31 suggested changes to the 99-year lease submitted by legal counsel for the Heniger Park Association, about half have been accepted by selectmen. None change the approved financial terms of the lease.

“We felt some were legitimate and beneficial to both sides to clarify the lease agreement, others were not in best interest of town,” Selectman Rick Micklon said.

He, Board of Selectmen Chairman Hal Ferguson and Selectman Len Adler reviewed the items last week. They agreed to 14 of them, disagreed with 14 and partially agreed with three.

The agreed-upon changes are being reviewed by the town’s legal counsel and are expected to result in a revised lease that will be forwarded to all leaseholders. The changes clarify some terms and clean up some grammatical issues.

The changes will not include a request by leaseholders to make it easier to negotiate financing terms.

Micklon said the board thought it was inappropriate to be a party to the leaseholders’ financing issues other than to offer them documents that are in the public domain.

The Board of Selectmen received the only signed 99-year lease Dec. 17, 2014, from James McKenna of Arlington, Mass.

Under the current terms, those who do not accept the new agreement will have leases extended to no longer than 2040, but the terms could change at any time under a new Board of Selectmen.

ldixon@sunjournal.com

Leased land a tough sell

OTISFIELD — The move to make a more equitable lease agreement between the town and Heniger Park leaseholders has been a challenge, town officials and camp owners said.

“We have never found a similar situation,” Selectman Rick Micklon said. “The closest may be the old paper mill leases that have gone with the wind.”

Years ago, some of the large timber companies held millions of acres, largely in northern Maine and some of it next on water bodies. Some of the land was leased and leaseholders were allowed to build a camp on it.

In 1965, Otisfield selectmen drew up agreements allowing people to lease lakeside lots in Heniger Park for 50 years. Those leases expire between 2015 and 2032. The leaseholder paid taxes on the camps and a lease fee to the town.

Historically, leases from timber companies would run one to five years and amount to about $1,300 to $1,500, according to information from Knadler Real Estate in northern Maine, which sells some of the camps on leased property.

“Back in the day, it was an inexpensive way to have something on the water without tying up a lot of money,” said Melody Knadler, a realtor with Knadler Real Estate in Aurora about 30 miles east of Bangor.

Knadler said generally the timber companies offered leases that ran from one to three years and usually increased about $10 to $15 per year. While the practise was once common, most leased properties were offered to the leaseholder for sale in the late in the 1980s and early 1990s. Most of those properties have been sold.

This week, J.D. Irving Co. announced plans to sell its leased land within the next 25 years as part of an overall land management plan. The company has owned about 51,000 acres of timberland in northern Maine since the 1980s.

The company’s director of land development told the Bangor Daily News it is looking at a formula that takes into account the size of the lot plus the amount of waterfront property on it. No selling prices have been announced yet.

While Otisfield officials have decided to change the lease fees to reflect values of other Pleasant Lake camp properties, some Heniger Park leaseholders say the new terms have forced them to put their property on the market.

At least two Heniger Park camps are being marketed by Bearfoot Realty of Oxford: a camp at 53 Heniger Park Road listing for $179,000 and one at 77 Heniger Park Road listing for $242,000.

Bearfoot Realty owner Monica LaVerdiere said the process is difficult because the camps are on leased land.

“It definitely has its challenges,” she said.

Knadler said it is an easier process in northern Maine because of the familiarity most northern Mainers have with leased land.

“I don’t (have trouble selling) because of the area I’m in,” she said. “People are more familiar with it.”

ldixon@sunjournal.com