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Cranberry Isles / Land Managemenet Commission

CRANBERRY ISLES
LAND MANAGEMENT COMMISSION
QUARTERLY STATUS REPORT
JANUARY, 2003

I Introduction:

This is the first Quarterly Status Report prepared by the Cranberry Isles
Land Management Commission (LMC). The LMC was appointed by the Board of
Selectmen effective September 3, 2002. The general membership LMC has
convened almost every week since that time, and the various LMC
subcommittees have held numerous additional meetings, often resulting in
some members attending several meetings the same week. The overall effort
to date has seen literally hundreds of volunteer hours donated by the
members, along with many additional hours of support provided by outside
volunteers with special areas of expertise.

The Land Management Commission's activities have initially focused on
organization and administrative planning to more effectively confront the
challenges which lie ahead. These efforts have included the establishment
of a "Land Management Commission Charter", in conjunction with the
Selectmen,  which clearly defines our operational guidelines and reasons
for existence; the identification of outside expert resources to assist us
with complex issues; the establishment of diverse subcommittees to address
specific areas of responsibility; and the provision of advice to the Board
of Selectmen during extended negotiations to buy the Southwest Harbor /
Manset Property after several Town Meetings had authorized its purchase and
funding. Once the deal was officially completed in early December,
2002  the LMC changed directions towards actual daily management of the
property, placed increased emphasis on short & long range planning goals,
and vigorously pursued fundraising alternatives to offset anticipated tax
increases which will result from the property's purchase. During these
initial months of existence, characterized by numerous periods of very
intense activity, the Land Management Commission has remained committed to
providing a balanced approach towards parking, docking & transportation
issues between Southwest Harbor (SWH) and Northeast Harbor (NEH), since
each  harbor is vitally important to the long-term well-being of the
Cranberry Isles. However, due to the recent purchase of the SWH property
after extensive negotiations, and consequent start-up management issues
involved with this site, the majority of LMC work to date has necessarily
been directed towards SWH.

II Land Management Commission Members:

Phil Whitney - Chairman
Eve Harrison - Vice Chairman
Edward Gray - Vice Chairman
William Dowling
Barbara Fernald
Bruce Komusin
Barbara Meyers
Owen Roberts
Beverly Sanborn
Gail Stanley
David Thomas
Chris White
Rodman Ward
Malcolm Donald

III Land Management Commission Charter - Operating Responsibilities:


1. Coordinate overall activities involving Southwest Harbor and Northeast
Harbor land and harbor management interests for the Town of Cranberry Isles.

2. Identify specific issues and interests for Southwest Harbor and
Northeast Harbor which will provide on-going structure for prioritizing
Land Management Commission actions at meetings.

3. Insure timely progress is accomplished with all appropriate issues &
interests.

4. Conduct taskings as determined by the Board of Selectmen, Land
Management Commission, or Town Consultants.

5. Identify knowledgeable outside resources who may, on occasion, assist
the Land Management Commission with various problems or projects, and
maintain a database of same.

6. Coordinate with the Board of Selectmen any expenditures which may be
incurred by the Land Management Commission in meeting their objectives.

7. Provide regular status report briefings at Board of Selectmen's Meetings
concerning the Land Management Commission's most recent progress and/or
setbacks.

8. Maintain internal records (minutes) of all meetings held by the Land
Management Commission with one copy being provided to the Town Clerk of the
Cranberry Isles.

9. Provide Quarterly Status Reports to all taxpayers, describing
objectively the Land Management Commission's progress, setbacks, short term
goals and long range planning. Provide an annual report of activities and
recommended future plans for inclusion in the Town's Annual Report; this
report to be submitted to the Chairman of the Board of Selectmen no later
than February 1st of each year. Determine logistics of preparation and
distribution of same.

10. In coordination with the Selectmen, contact the Town Attorney or other
legal sources, as necessary, to resolve legal issues and questions of law.

11. Coordinate any press coverage with the Board of Selectmen. Other than
the Board of Selectmen, only the Land Management Commission Chairman or the
Vice Chairmen will discuss Land Management Commission activities with the
media.

12. Draft a Long Range Plan for development and utilization of the
Southwest Harbor property, including the waterfront, docks, wharves &
ramps, with assistance from the Board of Selectmen, hired consultants and
other resources made available by the Board of Selectmen.

13. In coordination with the Board of Selectmen, develop and maintain
constructive relations with officials of  the Towns of Southwest Harbor and
Mount Desert, and county & state officials in furtherance of the Cranberry
Isles' objectives.

14. All business negotiations must be coordinated with the Board of
Selectmen. No formal agreements can be negotiated without Board of
Selectmen final approval.

15. Continually search for solutions to lower projected tax increases, such
as grant applications and private donor fundraising, while avoiding
restrictions which could inhibit potential revenue generating activities.

16. Utilize consultants hired by the Town, as necessary, and regularly
(monthly) inform the Board of Selectmen concerning their activities and
associated costs.

17. The Chairmen of the Board of Selectmen and the Land Management
Commission will meet regularly to informally brief each other of recent
activities relating to Land Management Commission programs, and will inform
each other in a timely fashion of any significant developments which could
potentially affect the work of the Land Management Commission.


IV Land Management Commission SubCommittees, Chairmen, and Areas of
Responsibility:


1. Fundraising:                                  Barbara Fernald - Co Chairman
                                                             Barbara Meyers
- Co Chairman


2. Parking:

     SWH                                               Edward Gray - Chairman
     NEH                                                Eve Harrison - Chairman

3. Waterfront:                                     Edward Gray - Chairman

     Docks
     Wharves
     Moorings

4. Buildings / Grounds:                     Eve Harrison - Chairman

     Maintenance
     Renovations
     Construction
     Landscaping

5. Transportation:                              Phil Whitney - Chairman

      Ferry Services
      Barge / Freight Services
      Land Transport

6.  Personnel:                                    Phil Whitney - Chairman

7.  Leases:                                        Eve Harrison - Chairman

8.  Finances:                                     Edward Gray - Chairman

      Loans
      Annual Operating Expenses
      Insurance
      User Fees
      Business Development
      Future Leases / Acquisitions

9.  Public Relations:                         Phil Whitney - Chairman

      Quarterly Status Reports
      Annual Town Report
      General Publicity
      Surveys
      Legal Issues
      Government Relations
      Neighborhood Relations
      Security Issues
      Expert Resources List**

V Planning:

Each SubCommittee has been tasked to develop short-term goals to accomplish
prior to the summer season. These goals are still being formulated, but
will be listed in the April Quarterly Status Report. However, the general
Land Management Commission has agreed upon several broad objectives to
enable development of the property for Cranberry Isles use within the next
six months. These objectives are:

a) Develop an initial parking area containing (137) spaces on land nearest
the waterfront. This development has already been permitted by the SWH
Planning Board. (May, 2003)

b) Extend the existing seasonal wharf an additional 50' into deep water.
This extension has already been permitted by the SWH Planning Board.
Prepare the wharf & floats for seasonal operation. (May, 2003)

c) Coordinate establishment of commercial ferry service operation to the
Cranberry Isles Intermodal Transportation Facility. (May, 2003)

d) Coordinate establishment of Island Explorer land transportation service
to the Cranberry Isles Intermodal Transportation Facility. (May, 2003)


**The LMC has developed an "Expert Resources List" of interested volunteers
who have specialized backgrounds or areas of expertise relating to the
above SubCommittee Areas of Responsibility. The list continues to grow, and
the LMC welcomes the addition of any taxpayers wishing to offer support
with their special skills or knowledge.

VI Southwest Harbor / Manset Property Purchase:

The Town of Cranberry Isles, on December 3, 2002 officially purchased four
parcels of land encompassing  3.14 acres, located in Manset, a village
within the Town of Southwest Harbor. The land was purchased from real
estate developer Pritham Singh. Although the most recent of three Town
Meetings to approve the property purchase  was held on September 25th,
nearly ten weeks of intensive negotiations were required between the Town
and Singh before final agreement was reached. The Town Meeting directed the
Selectmen to be unanimous in agreement in all negotiated details before the
property purchase could be completed. The Land Management Commission worked
closely with members of the Board of Selectmen during this time, and
offered advice on issues, as appropriate. In early October, an LMC
subcommittee, in conjunction with a  Selectman and a volunteer consultant,
thoroughly  reviewed the most recent Purchase & Sales Agreement available,
and identified numerous easements inserted by Mr. Singh which were
unanimously considered unacceptable by the group. Negotiations conducted by
the Selectmen resulted in Mr. Singh eliminating most of the easements
contained in the P&S Agreement. However, several easements and related
issues still existed which posed serious concerns to members of the LMC and
one Selectman. Additional negotiations ensued, which became occasionally
contentious, as deadlines imposed for either closing or dropping the
project neared without full agreement by the Town of Cranberry Isles having
been reached.  Wording was eventually  placed in the deed which completely
clarified the Town of Cranberry Isles' exclusive control for use &
development of the entire waterfront property. Further agreement also
provided for the maintenance / removal / construction of the seasonal wharf
& floats with no potential adverse effects to the Town related to covenants
retained by Singh.

Contrary to numerous published press reports after the deal was closed, all
easements/covenants  were not dropped by Mr. Singh. He was allowed to
retain an easement in perpetuity for exclusive use of the east side of the
second (middle) float. He also was allowed to retain an easement in
perpetuity to access & utilize the garage & second floor apartment
connected to the boathouse building. In addition, if Singh could obtain a
zoning waiver from the Town of SWH concerning 15' setbacks for the property
lines, he would assume actual ownership of the garage & the apartment. The
Town of Cranberry Isles would still retain the right of first refusal to
purchase all property that Singh retained as one parcel, including the
residence, should Singh decide to sell them in the future. (If Singh did
not reach agreement on zoning waivers with SWH, the only property subject
to first refusal terms would be the residence, since the garage/apartment
would remain the property of Cranberry Isles.) Although many LMC Members
expressed concerns over these 'perpetual easement' issues, the general
consensus agreed the deal as finally negotiated was acceptable, considering
that many issues had been resolved favorably in the interest of Cranberry
Isles, and the potential land use value of the property to the Town weighed
heavily in favor of completing the agreement. Therefore, the Land
Management Commission recommended the deal should proceed, and the
Selectmen subsequently agreed unanimously to move to closure.


VII Financing:

The total initial cost of the project is 2.4 million dollars - 1.975
million dollars for the actual purchase price and $400,000 for project
development costs. Initial financing for the project was arranged through
local banks bidding to provide short term (one year) bridge loans. When
bids were opened, the loan interest rates were  considerably lower than
expected - a pleasant surprise for the Town. Two sets of bids existed, one
based on a 1.7 million dollar loan, and the second on a 0.7 million dollar
loan. The Town selected the bid of Union Trust at 1.89% interest ($32,042
annual payment) for the 1.7 million dollar loan, and Bar Harbor Banking &
Trust at 2.652% ($18,770 annual payment) for the 0.7 million dollar loan. A
major fundraising effort, designed to obtain grant monies from various
sources, as well as private donation support, was undertaken to reduce, and
possibly eliminate, projected property tax increases, estimates which
ranged from 25% - 35%. (See Fund Raising Report below).


VIII Island Institute Support:

In addition to work being done by the LMC SubCommittees, we are benefiting
from the involvement of the Island Institute. They have furnished us with
extended publicity through their newspaper, "The Working Waterfront", and
they have indicated they will support us with some of our fundraising
efforts. In addition, the Island Institute has provided us with twenty
hours work per week from their resident Islesford intern, Jesse Minor.
Jesse has helped to develop the Island Institute Survey, assumed all survey
typing responsibilities, and is currently busy with tabulating the survey
results.


IX Cranberry Isles Parking & Docking Survey:

With major assistance from the Island Institute, the Land Management
Commission is conducting a survey that will provide essential information
in the process for developing a long-term plan for the Manset Property. By
the first of the year, every taxpayer of record within the Town of
Cranberry Isles will have received the survey, which asks questions about
the taxpayer's current household parking & docking use, and anticipated
future needs. There is also space for comments & suggestions. A separate
survey has been sent to all Cranberry Isles business owners. It is very
important that the Land Management Commission receive a clear picture of
the taxpayers' needs & opinions as we begin the complicated process of
planning for the future. The LMC is hoping for 100% participation, and to
date the response has been very encouraging. Our thanks to the many
individuals who have returned their completed forms. The results are now
being compiled. If you have not yet returned your survey - don't worry! We
will continue to process the results. Your participation will be extremely
helpful, so please devote a few minutes to filling out the survey and send
it to: Town of Cranberry Isles - Community Survey, P.O. Box 252, Islesford,
ME. 04646.


X LMC SubCommittee Activities:

Fundraising: The subcommittee is co-chaired by Barbara Meyers (Great
Cranberry) and Barbara Fernald (Islesford), year-round residents who have
shown exceptional dedication and capacity for mobilizing efforts to raise
monies to offset anticipated project costs for the Cranberry Isles. They
have enlisted an enthusiastic campaign committee of people from both
islands, with representatives from both the year-round and summer
communities. Working with fund-raising consultants Gary Friedmann &
Associates, they have produced an informative and attractive case statement
to describe our islands, our specific problems regarding access to the
mainland, and the potential which exists to support this creative solution.
The group continues working to identify funding sources. Their local
subcommittee members have had two training sessions with Gary Friedmann,
and they are planning to officially launch the fundraising campaign in the
next few weeks. The first step will be a local fund drive to demonstrate
local commitment to this historic project.

One of the subcommittee's important tasks is to function as a conduit for
information flowing between the LMC, the Selectmen and Gary Friedmann &
Associates as they coordinate the planning process with relevant grant
applications. This coordination is very complicated due to time lines which
must be met, lags inherent in most grants, and the fact that grant
applications are normally very specific as to goals, but the subcommittee
is still developing short and long-range planning objectives. The
subcommittee is also studying how grants will be administered once they
have been received. The first grant application was submitted to the State
of Maine on January 3, 2003.

As noted previously, the Island Institute has assisted the Fundraising
SubCommittee with the development, distribution and analysis of an island
parking and access needs survey which will be very useful in the
subcommittee's planning process.

In November, 2002 Crystal Pace of Gary Friedmann & Associates organized a
meeting of the many state & federal agencies that may be involved in the
Cranberry Isles Project, as well as most of the  political representatives
whose interests cover this region. This meeting, which was held at the
Eastern Maine Development Corporation in Bangor, was hosted by Judy Cuddy,
a staff member of US Senator Susan Collins' office. In addition to
providing a forum for the introduction of the Cranberry Isles Project in an
efficient and professional manner, the meeting proved very useful as a
brainstorming session. The following individuals & agency representatives
attended:

USDA Rural Development Office
Island Institute
Downeast Transportation
Hancock County Planning Commission
US Senator Olympia Snowe's Office
US Senator Susan Collin's Office
Eastern Maine Development Corporation
Gary Friedmann & Associates
State Senator (Outgoing) Jill Goldthwait
State Senator (Incoming) Dennis Damon
State Representative Ted Koffman
Downeast Community Development


Several exciting ideas originated from this meeting which are being
followed through at this time. The FundRaising SubCommittee will report in
more detail as developments proceed. Also, those islanders  who are here on
the islands this month: Watch for announcements of the first D-O-W (Dead of
Winter) Fun Event!

Any inquiries and suggestions for the FundRaising SubCommittee are most
welcome. Please contact:

Barbara Meyers                               Barb Fernald
(207) 244-5143                               (207) 244-5283
<mailto:wfd@midmaine.com>wfd@midmaine.com
<mailto:fernald@hypernet.com>fernald@hypernet.com


Parking: The subcommittee will be working closely with CES Engineer Jeff
Crafts and the SWH Planning Board in the next several weeks to develop the
initial (137) space parking area closest to the waterfront for use this
Summer. This has already been permitted by the SWH Planning Board. It has
also worked with the Selectmen to coordinate a written response to the Town
of Mount Desert officials regarding reasons for the purchase of the Manset
Property, and to reflect the Town of Cranberry Isles' on-going interest in
working with Mount Desert to continue using the waterfront & parking
facilities available at NEH.

Waterfront: The subcommittee will be surveying the seasonal dock for
required maintenance, feasibility of purchasing an additional deepwater
float, and determining which five moorings purchased with the property are
ours.

Buildings / Grounds: The subcommittee will be surveying the buildings in
the immediate future for any maintenance requirements, as well as talking
with existing leaseholders as to anticipated maintenance problems.

Transportation: The subcommittee has already conducted informal talks with
several parties potentially interested in operating ferry services out of
SWH from the Cranberry Isles facility. Follow-up meetings will be held
later in January.

Personnel: The subcommittee has identified Scott McIntire (previously the
caretaker for the Manset Property when Pritham Singh owned it) as a
potential caretaker for the Town. He has agreed to an interim nine months
contractual arrangement to cover the first season of operations, and will
provide security & maintenance services as part of the arrangement.

Leases: The SubCommittee is attempting to resolve legal questions with the
Maine Bond Bank regarding whether income-producing leases are permitted for
those parcels of property other than the Hinckley Real Estate parcel. The
Maine Bond Bank supervises the loans provided to the Town by the local
banks, and has certain stipulations & prohibitions accompanying the loans.
These need clarification. Copies of existing leases have also been
requested of the tenants for review.

Financial: The subcommittee is conducting a survey of annual operating
expenses for the SWH Property, for inclusion in Town budget planning for 2003.

Public Relations: This SubCommittee is responsible for preparing this
Quarterly Status Report, and will also prepare in the immediate future the
Land Management Commission Activity Report for the Annual Town Report. It
is also coordinating news articles for the local papers and the Island
Institute's 'Working Waterfront'.


XI Town Consultants:

The Town is working closely with several paid consultants to regularly
address Cranberry Isles land management planning & issues. The consultants
are:

Gary Friedmann & Associates, Bar Harbor. Professional fundraising advisors.
They are working closely with the Fundraising SubCommittee.

Jeff Crafts, CES Engineers, Southwest Harbor. Civil Engineer. He has worked
closely with most elements of the Land Management Commission, and
previously with the Land Acquisition Committee to identify potential
properties meeting the future needs of Cranberry Isles. He will now assist
the Selectmen and the Land Management Commission with designing and
implementing the initial phases of parking and waterfront development over
the next several months.

Anthony Giunta, Esq., Ellsworth. Town Attorney. He has advised the
Selectmen and the Land Managemnt Commission on legal issues involving the
purchase of the Manset Property, and will continue in this capacity as needed.

XII Significant Special Meetings:

In addition to the numerous Selectmen's Meetings, Land Management
Commission General Meetings, and SubCommittee Meetings, there have been
several other gatherings attended by LMC Members of noteworthy interest:

Several large meetings have been held with the Island Institute leadership,
which explored avenues of possible support to the Town. These gatherings
have been held in Ellsworth, Islesford, and aboard a flotilla of boats
docked at Great Cranberry Island.

Members met with high-ranking officials of the Maine Department of
Transportation (DOT) at Acadia National Park. Presentations were made
concerning the proposed Manset Intermodal Transportation Facility. The
officials were generally positive in their comments, and the LMC continues
to work with the DOT to access funding sources.

Presentations were made to the SWH Planning Board, which gave unanimous
approval to the initial proposed phase of the Manset Property development,
which was the establishment of a (137) space parking lot.

Members also met with a large group of state politicians and government
agency funding administrators at the Eastern Maine Development Corporation
in Bangor. The meeting was hosted by staff from US Senator Susan Collins'
office. Presentations were made to the attendees on the Cranberry Isles'
proposed development. Reactions were very favorable, with many suggestions
offered for possible avenues of funding support, and general agreement to
continue discussions with the LMC.


XII General Comments - Negatives & Positives:

The negotiations to finally purchase the Manset Property took longer than
expected, extending into December. As previously stated, concerns expressed
by Land Management Commission Members over aspects of the final agreement
were the primary reasons for the slowed process. Accordingly, the LMC was
unable to become proactive in actual management of the Manset Property
until just several weeks ago. This means a great amount of 'hands-on' work
for the LMC, in coordination with the Selectmen, lies ahead in the near
future to have the 'SWH Intermodal Transportation Facility' initially
operating by late Spring.

The logistics of coordinating meetings between Great Cranberry & Islesford,
as well as Southwest Harbor, Northeast Harbor, Bar Harbor, Ellsworth &
Bangor on occasion, has been daunting. Each meeting continues to offer
challenges of bad weather, infrequent winter ferry schedules, seasonal
members who cannot attend and provide support during the winter months, and
ever-present job conflicts for those 'volunteer' LMC Members who reside in
the Cranberry Isles year-round.

Direct, daily communications between the Selectmen and the Land Management
Commission on the multiple aspects of the parking, docking & transportation
agendas needs to improve, and is gradually improving, as the long-term
relationship and interraction between the two groups is further defined and
implemented.

Given the logistical problems enumerated above, the amount of dedication
shown and work completed to date by the Land Management Commission Members
and the Board of Selectmen has been truly remarkable. This entire project -
land acquisition search; identification of a suitable property; several
Town Meetings approving the project; further purchase negotiations; LMC
organization and advisory efforts; coordination of consultants, volunteer
experts, politicians & news media; and finally the actual purchase of the
largest available waterfront property in the entire region - have all been
accomplished within seven months, since June 19, 2002. This reflects very
favorably on the character of the people who make up the Cranberry Isles,
and their desire to preserve a unique way of life on these islands.


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