The Leucadia Corporation, a New York City and Utah-based investment company with an active real estate branch, has been a major player in large development deals in Islesboro and Rockport. Its Midcoast dealings have won praise from some and drawn ire from others.
On Islesboro, a Leucadia subsidiary’s proposed subdivision has meant years of controversy, legal wrangling and frustration. And in Rockport, town officials credit Leucadia with revitalizing the downtown and saving its beloved film and photography school. But some residents feel town officials have grown too cozy with the corporation.
Leucadia’s proposed subdivision startled Islesboro residents mostly because of its scale. In most communities, a proposal for a 20-home subdivision on 76 acres wouldn’t be a shock, but such a project has a different meaning on Islesboro. When a Leucadia subsidiary proposed the project for its Northeast Point subdivision, it unsettled people like Steve Miller, executive director for the Islesboro Land Trust.
“There has never been a land development on Islesboro that large in over 100 years,” Miller said.
He should know. In the eighties, Miller oversaw a subdivision development large enough that it caused Islesboro residents to update their land use regulations. But since then, town ordinances haven’t been updated substantially, he said.
Residents worried about the subdivision’s potential effect on the island’s water table and ferry service. Leucadia officials were surprised by the resistance, but regrouped and scaled back the proposal to 13 subdivisions. The company also hired midcoast landscape architect Cynthia Orcutt as the project manager.
Leucadia officials declined to comment on this story, but Orcutt, who worked on the Islesboro project before leaving it to spend more time with her family, shared her recollections.
She believes the project could have been great for Islesboro, but that missteps in the initial rollout by Leucadia and a pointed editorial in The Working Waterfront created an atmosphere of mistrust.
“I think it could have been a win-win for Islesboro and Leucadia,” Orcutt said.
Miller believes Leucadia was willing to work with the community while Orcutt was on board, but that the company resorted to legal wrangling after she left.
Town meetings were attended by court reporters and lawyers. A final plan was supposed to include a provision saying construction material could not be brought on the ferry, but the plan signed by town officials unaccountably left out that provision. No one, including town officials, knows why the provision was dropped, and it has been characterized by some as an accident. But many are angry it was left out and their trust in Leucadia has diminished because of it.
“It smells bad and it looks bad,” Miller said.
The Islesboro Land Trust ended up suing Leucadia when negotiations stalled to get the number of lots reduced. In an out-of-court settlement, Leucadia agreed to rework the lot boundaries and reduce the number of lots to 12. The subdivision has been greenlighted by the town, but progress has been slow. At one point, Leucadia was in danger of violating town provisions on the pace of construction after receiving the okay to develop.
Miller speculates Leucadia is waiting for the real estate market to rebound. The corporation overpaid at the height of the real estate boom, he said, and will have a hard time recouping its investment.
Around the same time that Orcutt came on board with the Northeast Point subdivision, Leucadia began to work on major development deals in Rockport. In quick succession, the corporation became a major player in Rockport real estate and its developments helped reshape the town.
“Basically, they own our downtown,” said Bob Peabody, Rockport town manager.
Town officials, by and large, have welcomed Leucadia. The corporation is credited with saving the town’s film and photography school, now called Maine Media Workshops, from foreclosure. It bought the school, and subsequently sold it to a group of former students and staff.
Maine Media Workshops officials declined to comment for this article, but executive director Charles Altschul praised Leucadia in a Bangor Metro magazine article, saying the corporation ensured “a future for the school.”
Leucadia also has bought and renovated key historic downtown buildings in a way that has won praise with historic preservationists and town officials. Currently, a Leucadia subsidiary is advertising a subdivision on the shoreline of Rockport that will have a working farm at its center.
“They have done things positively and gradually,” said Peabody. “Our downtown has been very sleepy, and now it has a new vitality.”
But some residents believe Leucadia is receiving too preferential of treatment from town officials. In June, the town asked Rockport voters to approve a measure that would have given Leucadia $723,307 in tax incentives to develop further. The measure was part of a package worth more than $2 million aimed at downtown development.
Rockport resident Robert Nichols wrote a letter to The Free Press, a newspaper covering the midcoast, denouncing Article 10. (Nichols is the father of Island Institute Publications Director Bridget Leavitt.) In the letter, he said the tax incentives amounted to “a tax kickback” to Leucadia. He questioned why the measure was intended to save the “blighted” downtown when new businesses were springing up there already.
Nichols described his letter as part of a grassroots movement aimed at saving the community from overdevelopment. While there is no evidence online of a formal group opposed to Leucadia, voters soundly defeated the measure by a margin of 219 votes. Voters also voted down a similar measure that would have created tax incentives for Commercial Street in Rockport by roughly the same margin.
This isn’t the first time a large corporation has taken interest in the midcoast region. In the nineties, the credit company MBNA created a real estate bubble when it relocated to the Belfast area. After MBNA was sold to Bank of America nearly a decade later, the company pulled out, leaving many scrambling.
Jane Lafleur, a midcoast smart growth expert with Friends of Midcoast Maine who is helping Islesboro update its comprehensive plan, was on a committee planning Camden’s future when the news came that MBNA was leaving. The company’s pull-out changed everything, she said.
“I even heard that the artists have felt the impact,” Lafleur said.
But Lafleur said that the new wave of corporate interest can leave a better legacy than did the mills near where she grew up in Lewiston and Auburn. That sentiment has been echoed publically by Belfast mayor Mike Hurley, who said the credit card giant helped both to transition the economy away from chicken farming and to attract a highly-educated local workforce.
Lafleur believes all Maine coastal towns should prepare for such unexpected interest from corporations. The best way to prepare, she said, is to create a comprehensive plan and ordinances that are in line with a shared vision of a community’s future. Development pressure is coming up the coast, especially as high-speed internet technologies make it easier and cheaper to locate companies in beautiful locations.
“Development is going to occur,” Lafleur said. “We’re kidding ourselves if we think it’s not going to happen.”
Craig Idlebrook is a freelance writer based in Ellsworth.