News

Is Pennell part of the trust, or not?
Council Chair wants to settle it once and for all
By Elizabeth Prata

The nagging question

Gray--At Thursday's Pennell meeting, when Gary Foster said that he would like to explore settling the question of who owns Pennell, Vice-Chair Andy Upham asked Town Attorney Bill Dale to provide information on two points: the probability of success if the Council asks a judge to settle this, and the estimated cost.

In 1957, Pennell was a bursting at the seams school and an expansion was needed. A bond to pay for that expansion was put together. The Pennell Institute building and the one-acre it sits on were removed from the trust for collateral, and were to be put back into the trust when the bond expired, explained Chair Foster at the meeting last Thursday.

That re-introduction of the building and land back into the trust never took place. Then the School District was formed in April 1960, and Gray and New Gloucester were united under the umbrella of SAD 15. The result is that the building and land would be subject to the state law governing the School Closure act and not under the Attorney General, who manages state trusts, said Chair Gary Foster. It would also mean that Gray already owns the building. Or does it?

Two citizens research

This state of affairs was discovered by Mike Salvetti and John Welch, two Gray citizens who researched the details of all documents relating to Pennell. They presented their findings to the Council last year. The then-Council heard the comments from Mr. Salvetti and Mr. Welch, and went to the Attorney General with the question. The AG opined that Gray likely did not own the building and land.

Foster stated concerns regularly

Chair Foster persisted over the last year, saying that the AG has an interest in trusts and is not a totally unbiased party, like a judge would be. The AG's opinion was just that, an opinion, whereas a judge would make a decision. Mr. Foster raised his concerns several times, particularly at the May 17, 2005 meeting, at which it was moved by then-Councilor Hall to "act on the Councils' support for the transfer of the Pennell Trusts and assets from the MSAD #15 and the Town of Gray to the proposed Gray Public Library Association, a non-profit organization."

From the meeting minutes, Councilor Foster stated at that time that "the transfer seemed to be premature and that approval should be obtained from the Attorney General which could take 30-60 days. In light of the pending court case, and without the determination of the building and property as potentially separate from the trust, the Council should wait on taking action. So far there has been no information to suggest the property and the trust were rolled into one entity.

If the property is separate from the trust, the District could dispose of it. The Historical Society holds a lease at Pennell that has a few years remaining." The vote on the motion was 4-1 with Foster opposed, based on his above stated concerns.

Settling the ownership issue represents the crux of the key to untying the Gordian knot this issue has become.

If pursued, would Gray prevail?

On Monday, June 27, Manager Mitch Berkowitz provided the Council with the information that was requested by Vice-Chair Upham. Mr. Dale wrote that "With regard to the Town's chances of success in litigation, there are several points to consider. First, the School District has already obtained a Superior Court order in its favor (the town was not even made a party to this court case), and so our first order of business is to get the Court to re-open that decision so that the Town can intervene as a party and then argue the merits of its position. I think it is highly likely, say 75% that the Superior Court will re-open the matter but I cannot say so with 100% certainty.

Mr. Dale explained: "Second, if the court re-opens the matter, again I think it is highly likely, say 67% to 75%, that the court either direct the real property (that is, the land and buildings) go back directly to the Town, or, in the alternative, allow the School District to sell the same, but then be obligated to give the cash proceeds of such a sale to the Town. Note that in the latter circumstance the town could bid aggressively on the property to ensure that it was the high bidder, obtain title to the property through that bidding process and then get reimbursed with the cash proceeds from the School District."

Mr. Dale continued: "As to the cost of pursuing the litigation, there are also several factors to consider here. First, all other things being equal - meaning a modest contest being put up by the School District and the Attorney General's office in Superior court, the Town's additional legal fees would likely be between $5,000 and $7,500, again depending on how hard the School District or the AG's office contests the Town's pending motion to re-open the Superior Court case. On the other hand, if the School District and/or the Attorney General's office elects to contest vigorously the Town's position in court, the Town's additional legal fees might be as high as $10,000 [t]o $12,500."

The Council will discuss the Pennell issue at their July 5th regular meeting and again at the July 19 meeting. Public input is welcome.