Boards
to vote on agreement for Pennell
By Elizabeth Prata
In June of 2003, the M.S.A.D.#15 began talking publicly
about disposing of Pennell Institute in Gray. Pennell
was an educational institution built in the 1880s
and opened in the early 1890s. When the SAD was
formed in the mid-1960s Pennell was, by law, taken
from Gray's ownership and absorbed into SAD ownership.
Now that the SAD no longer needs the building, the
Town and the SAD got together to talk about how
to transfer the building back to Gray's ownership.
Parallel to those discussions, as the SAD must do
by law, they sent a request to the Attorney General
(AG) formally asking if the SAD may dispose of the
building and by what manner (whether they had to
go through the 'school closure process').
The answer came back that they did not have to go
through the school closure process, and that they
may convey the complex of land and buildings by
sale or swap for fair market value.
When the Town heard that this request to the AG
was placed without their knowledge, and worse, that
the answer contained a ruling of conveyance for
a monetary value instead of free or for a dollar
that they were hoping for, the Town sued the SAD.
The Town said that the AG was not aware of Gray's
interest and unless he knew that Gray was involved
any rulings may be prejudicial toward the SAD.
The AG told the Town to put their lawsuit on hold
and work with the SAD for one year. The year, with
an extension, ends September 30, 2004.
The renewed discussions under this changed climate
began with a new idea- the SAD would convey the
complex to the Town, the Town would move their offices
in there, and since there would be room left over,
the SAD could move in to the remainder of the building
and lease it for below-market rent for 30 years
(one five year term and four re-ups.)
These discussions are outlined in a written document
that the Town Manager Mitchell A. Berkowitz is drafting,
called the Memorandum of Understanding (MOU). The
SAD Is no longer in charge of their school disposal
process.
The discussions are complicated by the fact that
there are two parts to the discussions- the buildings
and lands themselves, and the trust that was placed
over the buildings and lands. The Pennell Trust
stipulated that the buildings must be used for educational
purposes, in perpetuity. When the SAD asked the
AG if they could close Pennell and dispose of it,
the restriction to use the buildings for educational
purposes was lifted.
The building could be sold to anyone for any purpose,
but any monetary proceeds must be kept in the trust
and used for educational purposes. So the building
could be sold and rehabbed as office space to a
bunch of doctors, for example, but the money the
SAD gains from a sale must be absorbed into their
budget as part of the Trust, kept as a special line
item, thus maintaining the trust.
The parties are hoping that the AG will be satisfied
with the compromise that the SAD and the Town have
negotiated, co-habitation, with the lease being
part of the trust, and that the building is conveyed
back to the Town in a manner he finds appropriate.
The problem the parties are dealing with now is
that the lease ends in 30 years. State law prohibits
SADs from entering into long-term leases, that's
one reason the lease is in five-year terms. But
with the lease having a definitive end, it means
that since the trust is tied to the lease, the trust
ends when the lease does.
This is a problem since the Trust is supposed to
go on in perpetuity. At one point, the parties hoped
that a complicated structure of conveying the SAD
Central Office building to the Town and other land
swaps would satisfy the lease-perpetuation problem,
but the legal department judged that this arrangement
is not appropriate.
On Tuesday, August 3, at Stimson Hall at 6 p.m.
the parties will be discussing this latest development
and finalizing the MOU.
Immediately afterwards, at 7 p.m., the Council will
be discussing the MOU on their regular agenda. On
Wednesday, August 4, the School Board will be discussing
the MOU as part of their agenda as well. Separately,
both elected boards are expected to vote on whether
or not to accept the MOU.
If accepted by both Boards, a contingent will travel
to Augusta and meet with the AG to see if he will
accept it.
If accepted by the AG, the Town will hold a special
town meeting in September to ask Gray citizens if
they want to own the Pennell Complex.
Below
is a schematic draft of how the space inside Pennell
Institute would be designated if the Council and
SAD Board, and then the citizens accept Pennell
Institute back into Gray onwership.
The
space designation was allocated by Gray Town Manager
Mitchell A. Berkowitz.
It
should be noted that the bathrooms at the front
part of the historic section within what is asssumed
to become Manager and SAD Superintendent's Offices
do not exist there now. They would be modern additions.
