OTISFIELD — Only eight of the 37 lessees at Heniger Park on Pleasant Lake signed new 99-year leases with the town by the Thursday, April 30, deadline, Selectmen Chairman Hal Ferguson said.
The agreement gave camps owners on town-leased lots the opportunity to continue the arrangement with the town for the next 99 years at 10-year increments — but they will have to pay a land capitalization rate — or let their leases run out.
Under the 99-year agreements, the value for lakefront lots is $213,000 and back lots is $44,340. A land capitalization rate of 2.2 percent is applied as the lease fee. Buildings are taxed at $12 per thousand dollars of assessed value.
The new lease was developed by a committee and selectmen, with input from lessees and others, over two years. In June 2014, voters backed selectmen’s efforts to change the terms to reflect values of other Pleasant Lake camp properties.
If all 37 had signed new leases, property taxes were expected to increase from $9,528 to $100,551 annually, based on the current tax rate.
Ferguson said the returned 99-year leases were from two whose agreements expire this year, one that expires in 2016, three that expire in 2017, one that expires in 2019 and one that expires in 2020.
Those lessees who did not sign up for the 99-year-lease and whose leases expire in FY 2016 (July 1, 2015 through June 30, 2016) still have the opportunity to sign a lease extension until 2040.
It is a one time offer by the board and only applicable to those leases expiring within that time frame, Ferguson said.
After that date, all bets are off, he said, because new members on the board could generate new lease agreements.
The new terms have been criticized by Heniger Park Association members, which make up the majority of the camp owners in the park, since they were revealed earlier this year. Members said the new terms would force them to put their property on the market.
Selectmen conceded to 14 of the 28 association requests over the past few months, including agreeing to work with financial institutions by extending the 10-year incremental lease to a 20-year incremental lease to allow for a longer mortgage.
But Heniger Park Association members continue to stand firm this week on their contention that parts of the new lease are unfair and present challenges in any effort to sell their camps or obtain a home equity loan.
Last week, selectmen received a package from the association asking for more concessions after the association spoke to real estate agents, lending and legal experts who told the group it would be impossible to provide a mortgage because of the terms of the new 99-year lease.
Ferguson said no further considerations will be entertained.
The 100-acre park of mostly wooded land on the west shore of the 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. Lessees were allowed to build camps, paying taxes on the full value of structures.
The leases were calculated on an assessed value of $15,000 for back lots and $30,000 for lakefront lots, multiplied by the tax rate. The lease fee of $0 to $50 was added on.
SIDEBAR
OTISFIELD — The town is advertising to lease Lot 4 in Heniger Park, and several people have already inquired, Board of Selectmen Chairman Hal Ferguson said.
The lot, which has sat unused for years, has an existing structure on it, but it is only a shell.
The minimum bid of $25,000 is based on factors such as the asking price of several Heniger Park camps that are up for sale, he said.
The lease requires the lessee to have a taxable structure on site within two years.
The future lessee can improve the building shell on the property under the direction of the local code enforcement officer or apply to the Planning Board for a new building permit, Ferguson said.
Bids will be opened at 7:30 p.m. Wednesday, June 3, at the Town Office.
The winning bidder will be able to sign a 99-year-lease for the property.
Send questions/comments to the editors.
