July 12, 2011 – (RealEstateRama) — Governor Paul LePage issued a statement Monday regarding a recent opinion from Attorney General William Schneider. The opinion involves the purported sale of real estate to a State employee and a subsequent lease back to the State of a building located on the property.
Attorney General weighs in on recent sale saying it is “void”
For Immediate Release: Monday, July 11, 2011 Contact: Adrienne Bennett (207) 287-2531
Augusta, Maine – Governor Paul LePage issued a statement Monday regarding a recent opinion from Attorney General William Schneider. The opinion involves the purported sale of real estate to a State employee and a subsequent lease back to the State of a building located on the property.
In a July 8, 2011 letter to Department of Administrative and Financial Services (DFAS) Commissioner Sawin Millett and Ms. Patricia Barnhart, Attorney General Schneider writes, “Because Ms. Barnhart is employed by the State as the Warden of the Maine State Prison and was so employed during the time period which this transaction took place, it is my opinion that the Contract, Release Deed, and Lease and Memorandum of Lease are void under the terms of title 17, section 3104 of the Maine Revised Statutes.”
The real estate transaction involving property located at 22, 26, and 30 Ship Circle in Thomaston, Maine began in the fall of 2010 under the previous Administration and was consummated through the Department of Administrative and Financial Services in June 2011.
Under the direction of the 124th Legislature, the FY 10/11 budget was to be balanced, in part, by booking $1.5 million dollars in anticipated revenue from the sale of a list of State-owned properties which included the Ship Circle properties in Thomaston.
Governor LePage was informed about the sale last week and had no prior knowledge of the deal. Upon review of the details the Governor issued an executive order immediately. The order establishes that The Department of Administrative and Financial Services will create internal policy guidance for sales of state-owned real estate.
“While it is disconcerting that questions about this sale were not raised during this process I am confident the measures I am taking now will prevent similar situations from occurring in the future,” said Governor LePage.
“The people’s business is to be done openly and Mainers must be able to trust the process in which State business is conducted.”
The executive order is as follows:
18 FY 11/12 July 11, 2011
AN ORDER INCREASING OVERSIGHT OVER SALES OF STATE-OWNED REAL ESTATE WHEREAS, the State of Maine owns real estate that may not be in active state use;
WHEREAS, the sale of these properties will allow them to be put to higher and better uses;
WHEREAS, it is the duty of State Government to ensure that such sales are conducted in a fair and open manner; and
WHEREAS, prior sales practices have provided insufficient oversight;
NOW, THEREFORE, I, Paul R. LePage, Governor of the State of Maine, hereby order as follows:
- The Department of Administrative and Financial Services shall establish internal policy guidance for sales of state-owned real estate. Such policy shall include, at a minimum, the following controls:
- A reasonable period of public notice for all properties to be sold, to be advertised according to customary real estate sales practices;
- An Affidavit by prospective purchasers that such purchaser is not in violation of 17 M.R.S.A. � 3104;
- A review of any proposed sales by the Office of the Attorney General;
- A review of any proposed sales by a committee of Department directors, to include the submission of an evaluation report to the Commissioner; and
- A signed statement by a person with experience in real estate transactions that the proposed sale price is commercially-reasonable.
- The Department of Administrative and Financial Services shall immediately suspend all pending real estate sales until a review substantially similar to the policy outlined in Paragraph 1 is conducted. The Department may proceed to closing each sale only upon the express approval of the Commissioner.
The effective date of this Executive Order is July 11, 2011.
Paul R. LePage, Governor