FRYE ISLAND INCORPORATED STOCKHOLDERS MEETING

FRYE ISLAND COMMUNITY CENTER

JULY 5, 2003

 

A.) President Thomas called the meeting of Frye Island Incorporated Stockholders to order at 9:25 AM.

 

B.) ELECTION OF BOARD OF DIRECTORS

The names of the following were placed in nomination for the Board of Directors:

            Diane Babineau                                   Donald Nolan

            Peter Bearor                                        Dick Norris

            Tom Bishop                                         Philip Perry

            Robert E. Boyd                       `           Jan Roberts

            Nancy Founier                                     Jeanne Sullivan-Toomey

Dick Giggey                                        Tim Tinsman

Carl Hommel                                      

 

Jeanne Sullivan-Toomey withdrew her name. The nominees made brief statements, and the written ballots were cast. Those elected were:

Diane Babineau                                   Dick Giggey

            Peter Bearor                                        Dick Norris

Tom Bishop                                         Philip Perry

Nancy Founier                                     Jan Roberts

            Carl Hommel

 

 

C.) VOTE TO REVISE THE REAL ESTATE POLICY

F. Mueller MOVED and J. Potts SECONDED to revise the Real Estate Policy as follows: (See Attachment.)

 

The motion PASSED.

 

D.) FERRY TRANSFER

O. Svetlichny MOVED and T. Burgess SECONDED that written ballots be sent to all Stockholders asking for approval to transfer the ferry system to the Town. The motion PASSED.

 

E.) CONSERVATION COMMISSION REPORT

Due to the illness of the Chairperson of the Conservation Commission, there was no report.

 

F.) ADJOURNMENT

The meeting of the Frye Island Incorporated Stockholders was adjourned at 10:00 AM.


 

ATTACHMENT

 

 

FRYE ISLAND REAL ESTATE POLICY

 

 

 

 

DATE:   Revised 08/27/2002 (Approved at 10/12/02 Stockholders Meeting)06/24/03

 

Table of Contents

 

1.      Goals

2.      Frye Island Real Estate Planning

a.       Changes in Zoning

b.      Tax Consequences

c.      Volatile Market and Limited Inventory

d.      Limits on Sales

e.      Use of Funds

f.       Other Uses for FII Lots

3.      General Lot Purchase Program

4.      4. Conditions by Lot Type

a.       Buildable Lots

b.      Merge Lots

c.      b.   Unbuildable Contiguous Privacy /Pumpback Lots

d.      Unbuildable Non-Contiguous Pumpback Lots

e.      Unbuildable Non-Contiguous General Use Lots

5.Changes in Lot Classification

6. Nominal Purchase Prices for FII Lots

7. Financing

8. Sales Procedures

Appendix: Official Bid and Easement Form

 

 

 1.   Goals The goals of the Frye Island Real Estate policy are:

 

a.       To maintain open space and the rural character of the Island.

 

b.      To preserve control over the long term management of FII real estate.

 

c.      To protect the 750 cottage limit (i. e. the capability of having 750 septic systems on Frye Island) through the execution of the 1990 agreement between Frye Island Inc. (FII), the Frye Island Municipal Services Corporation (MSC), and the Portland Water District).

 

d.      To help satisfy the financial needs of FII.

 

e.      To reduce FII tax liabilities, support a capital reserve, and fund capital improvements by transferring via sale certain parcels from the FII tax base to private, individual ownership.

 

In order to meet these goals, the Board (Board) will consider each offer on an FII lot and base its deliberations upon the intended use of the lot, its location on the Island, the effect of the intended use of the lot on the surrounding properties, and the value of the lot if used for other purposes.

 

 2.   Frye Island Real Estate Planning

 

The Board is responsible for the formulation and administration of a long-term plan for FII real estate, the management of compliance with the Portland Water District Agreement, the interpretation and administration of this policy and its objectives, and the supervision of other continuing real estate issues.

 

A Steering Committee (Committee), appointed by the Board, shall be established to facilitate the planning effort.  There shall be seven members on the Committee, including a minimum of three members from the Board.  During the annual stockholders meeting in July, the Board will ask for volunteers for the Committee. 

 

The meetings and agendas of the Committee shall be posted on the Town Bulletin Board and in the FINS at least five days before the meetings. Meetings shall be open to all FII stockholders and interested parties.

 

The Committee will develop a FII land use plan based on the research of the future needs of the Island's/Town’s infrastructure as it relates to land usage, population growth, and capital expenditures.  The Committee will then develop and annually update a five-year capital expenditure plan. The Committee will submit the plans to the Board for action by the Board. Once approved, the plan will be maintained as an appendix to the Real Estate Policy. The Board will provide the current versions of the plans to the Town Planning Board for use in updating the Town Comprehensive Plan and related Planning Board deliberations.

 

The Steering Committee will work with the Board to address real estate transactions and to consider the following:

 

a.      Changes in Zoning

 

Zoning changes can affect the value of FII property, and continuing efforts must be made to track and assess the impacts of such changes.

 

b.    Tax Consequences

 

Lot sales can potentially impose substantial income taxes on FII. The Board will work closely with Town representatives to meet the financial needs of the Island. However, financial planning must be done in a manner that balances FII tax liabilities against the Town/Island needs for capital improvements.

 

c.     Volatile Market and Limited Inventory

 

The real estate market on Frye Island can vary significantly from year to year. The intent of the Real Estate Policy is to be in a position to be able to sell during favorable market conditions while maintaining sufficient reserve funds. However, it must be remembered there are only a finite number of lots that can be available for sale. Thus, consideration must be given to not sell too many lots too soon at the expense of future generations and better market conditions. This is a delicate balancing act.

 

d.    Limits on Sales

 

The Board will limit the future sale of lots.

 

The sale of Buildable Lots will be limited on an annual basis by the approximate value of one typical buildable waterfront lot. This limit will ensure a supply of Buildable Lots in the future. Lot sales may be further limited on the basis of unfavorable market conditions, unfavorable tax consequences, or other reasons under which a sale would not be in the best interest of the stockholders.

 

The sale of Unbuildable Lots will not be limited to ensure a supply of these lots in the future. The fact that these sales satisfy the needs of current owners while supplementing the Island green space outweighs considerations for increased values in the future. Market conditions, potential taxes, or other reasons as noted above may however, limit these sales.

 

 

 

e.     Use of Funds

 

The money generated from the sale of lots will be spent on Island/Town capital projects as defined by the Internal Revenue Service. Some examples include:

 

·        New ferry.

·        New ferry landing.

·        Major renovation of existing buildings.

·        Parking at office/store.

·        Additional recreation areas.

·        Improvements to the existing recreation areas.

·        Off-island winter office building.

·        Handicapped access to FII and Town facilities.

·        Retiring lots (purchasing private lots and committing them to green space, thereby reducing the potential number of houses on the Island below 750).

 

f.     Other Uses for FII Lots

 

In addition to selling lots, FII and the Steering Committee will consider:

·        Donating lots to the Town in accordance with a schedule that maximizes tax advantages.

·        Earmarking lots for conservation in order to accommodate future projects.   Such donations may be required to enable construction of new facilities or to satisfy phosphorous runoff reduction requirements for the Portland Water District.

 

 3.   General Lot Purchase Program

 

Only current Frye Island property owners shall be given the opportunity to purchase Unbuildable Lots from FII. The sale of Buildable Lots will be open to anyone interested in purchasing property on Frye Island.

 

The past practice of accepting “letters of first refusal for adjacent privacy lots” is terminated and all existing letters are voided as of 30 June 2003.

 

All lots will be offered on a first come first served basis. All transactions consummated as part of this policy will be publicly posted. The Board will determine which lots are available for purchase and the maximum number of lots to be sold so as not to conflict with any pre-existing interests or defined limitations. No lots will be sold that would add to the 750 cottage limitation. The sale of Buildable Lots is an option available to the Board as long as the 750-cottage limit is not exceeded. Consequently, FII will purchase a lesser priced privately owned lot for every Buildable Lot they sell.

 

Any individual wanting to purchase a lot will have 60 days to close the transaction from the execution date of the purchase and sale agreement, unless extended. A 5% deposit will be required at the signing of that agreement. All necessary permitting, survey work, and soil testing will be done at the buyer’s expense.   

 

4.    Conditions by Lot Type

 

a.      Buildable Lots

 

A Buildable Lot must be one that is allowed to have a dwelling built on it according to the recorded restrictions originally imposed by the former Leisure Living Incorporated and the restrictions imposed by the various building codes and ordinances enforced by the State of Maine, the Portland Water District and the Town of Frye Island. Any lot sold by FII as a Buildable Lot will have no new deed restrictions imposed on it. At its discretion, either to meet minimum zoning requirements and/or to create a more desirable spacing between cottages, the Board may package two or more contiguous lots together for sale as a Buildable Lot.

 

In order not to exceed the 750 Buildable Lot limit established under the agreement with the Portland Water District, the Board will offset the sale of Buildable Lots with the purchase of a like number of lesser priced lots from Frye Island property owners.

 

b.    Merge Lots

 

Any lot sold by FII as a Merge Lot to an owner of a contiguous lot not yet built on must be combined with that contiguous lot into a single, combined lot and so recorded with the Cumberland County Registry of Deeds. Alternatively, a Merge Lot can be sold jointly to the owners of the contiguous lots on either side and split between them, with their respective portions each combined with their contiguous lots into single, combined lots and so recorded with the Cumberland County Registry of Deeds. Once combined, building restrictions on a combined lot not yet built on shall be those that apply to any lot governed by the Frye Island Land Use Ordinances. If one portion of a split Merge Lot is combined with a lot already built on, the restrictions listed below for Unbuildable Contiguous Privacy/Pumpback Lots shall apply.

 

 c.    Unbuildable Contiguous Privacy/Pumpback Lots

 

Any lot sold by FII as an Unbuildable Contiguous Privacy or Pumpback Lot must be deeded as an Unbuildable Lot as part of aand placed under common ownership with the contiguous lot with a cottage.already built on. These lots shall not be resold as individual parcels.

 

Only an approved pumpback septic system and/or a non-permanent structure, such as a storage shed, may be constructed on the lot. The non-permanent structure shall have a footprint no larger than 120 square feet and shall have a height less than 12 feet. No other construction will be permitted on these lots except docks on waterfront lots. .

 

These lots may not be cleared by no more than that required to provide a path with a maximum width of 5 feet, by no more than 240 square feet to accommodate the non-permanent structure, and by the minimum required to accommodate the pumpback septic system.

 

 c. Unbuildabled.       Unbuildable Non-contiguous Pumpback Lots

 

Any lot sold by FII as an Unbuildable Non-Contiguous Pumpback Lot must be deeded as an Unbuildable Lot.  It is anticipated that a number of individuals will be interested in acquiring such lots in order to establish septic systems when there is no room on the house lots to do so and no contiguous lots are available. These lots are not available for resale as individual parcels.

 

Only an approved pumpback septic system and/or a non-permanent structure, such as a storage shed, may be constructed on the lot. The non-permanent structure shall have a footprint no larger than 120 square feet and shall have a height less than 12 feet. No other construction will be permitted on these lots.

 

These lots may not be cleared by no more than that required to provide a path with a maximum width of 5 feet, by no more than 240 square feet to accommodate the non-permanent structure, and by the minimum required to accommodate the pumpback septic system.

 

d. Unbuildablee.        Unbuildable Non-contiguous General Use Lots

 

Any lot sold by FII as an Unbuildable Non-Contiguous General Use Lot must be deeded as an Unbuildable Lot. It is anticipated that a typical lot will be a waterfront lot that is unbuildable because of physical characteristics or zoning restrictions. The sale of these lots will provide inland cottage owners with access to the water, help reduce the shortage of marina availability, maintain green space, and generate income for FII, through the sale of the lot, and for the Town, through taxes. These lots are not available for resale as individual parcels.

 

Only a non-permanent structure, such as a storage shed, may be constructed on the lot. The non-permanent structure shall have a footprint no larger than 120 square feet and shall have a height less than 12 feet. No other construction will be permitted on these lots, except docks on waterfront lots.

 

These lots may not be cleared by no more than that required to provide a path with a maximum width of 5 feet and by no more than 240 square feet to accommodate the non-permanent structure.

 

 5.   Changes in Lot Classification

 

A property owner who purchased a FII lot as an Unbuildable Lot can make application to FII as a special exception to have the deeded restrictions removed in order to make it a Buildable Lot. For such removal, all the requirements for a Buildable Lot must be met, and the Board must find that such a change is in the best interest of the Island. Before the Board proceeds with any change in classification, all property owners within 75 feet (including public and private rights-of-way) of the property must be mailed a notice, on a best efforts basis. The requestor will pay for all legal costs incurred in making the change. A cash payment shall be made to FII equal to 35% of the fair market value of the Buildable Lot at the time of the classification change request.

 

 6.   Nominal Purchase Prices for FII Lots

 

The nominal prices shall be based on their FULL FAIR MARKET VALUE. The percentage of full market value for the various categories will be as follows:

 

 

Usage

Categories

Percentage of

Full Market Value

Buildable

100%

Merge

65%

Unbuildable Contiguous Privacy / Pumpback

65 %

Unbuildable Contiguous Privacy/Pumpback

65%

Unbuildable Non-contiguous Pumpback

70 %

Unbuildable Non-contiguous Pumpback

70%

Unbuildable Non-contiguous General Use

75 %

Unbuildable Non-contiguous General Use

75%

         

 

The FII Board can reject any offer that is felt not to be in the best interest of FII and its stockholders. FII may identify certain lots as not available for sale or as available for sale only as Buildable Lots. The Board retains the prerogative to alter or amend these valuation guidelines as it sees fit and as circumstances change, all in keeping with the best interests of the Island as a whole.

 

7.    Financing

 

FII may offer financing on the purchase of any lot as long as FII can obtain a clear first mortgage. Under the current program of financing, which is subject to change at the Board’s discretion, the financing terms are:

 

a.       A minimum down payment of 10%.

 

b.      A maximum loan period of 15 (fifteen) years with equal monthly amortization.

 

c.      An initial interest rate of 1.5% above prime at the time FII votes to sell the lot.

 

d.      The interest rate will be adjusted to Prime plus 1.5% on January 2nd of each succeeding year.

 

 8.   Sales Procedures

 

Outlined below are the procedures the Board will use to sell FII owned real estate as described in this Policy.

 

a.       The annual selling season will be from the first weekend after the Island opens through October 15th. The Board will act upon bids as soon as possible after the offer is received. The closing of sales initiated during September and October may be extended by the Board until the following year to allow the buyer to obtain financing and to ensure that property owners adjacent to the lot being purchased are given adequate notice of the pending sale.

 

b.      The primary bid (the first offer submitted) shall be submitted on the Official Bid and Easement Form (See Appendix.) to the FII General Manager. The Official Bid and Easement Form is available at the Town Administration Office and will be used by all bidders. The General Manager will make copies of the bid and all other material which may be submitted with the bid and forward it to the Board. At the same time, each property owner within 75 feet (including public and private rights-of-way) of a bid-upon property will be mailed a notice of interest, on a best efforts basis. The General Manager will place the offer on the Agenda of the next Board meeting. . A check in the amount of 5% of the bid price must be included with the bid. The Bidder will be asked to attend the Board meeting.

 

c.      An individual property may be classified with one or all of the property classes (i. e. Buildable, Merge, Unbuildable Contiguous Privacy and PumpbackPrivacy/Pumpback Lots, Unbuildable Non-Contiguous Pumpback Lot, or Unbuildable Non-Contiguous General Use Lot ). The Primary Bidder must specify the intent of the usage of the property to be acquired.

 

d.      All Board members should make a site visit to the specified lot before the Board meeting. Members may request additional information on the lot from the General Manager. All information will be made available to all Board members before the meeting.

 

e.      At the scheduled Board meeting, the Board will review the bid. The Board can accept, reject or hold consideration of the bid over until the next meeting of the Board, if additional information is required or additional deliberations are deemed necessary. The Board may hire a certified real estate agent to complete an appraisal at no cost to the Bidder, if the Board believes this additional information would be beneficial. If the bid is rejected, a letter will be sent to the Bidder and the letter will state the reason for the rejection.

 

f.       Public posting of each primary bid, which has been accepted by the Board, will be completed no later than two days after the Board accepts the bid offer. The posting will detail the lot number and the amount of the bid, but will not indicate the name of the bidder. A minimum two-week period of public notification (see g below) will follow the public posting. This period will also be the time during which competing bids may be submitted to the General Manager.

 

g.      The Administration Building bulletin board and the FINS will serve as the only public posting. Each property owner within 75 feet (including public and private right-of-ways) of a bid-upon property will be mailed a notice of interest, on a best efforts basis.

 

h.      Competing offers will only be considered if they are for a property class of equal or higher value than the primary bid. (For example: If the primary bid is for a Buildable Lot, only competing bids for a Buildable Lot will be considered. If the primary bid is for a pumpback lot, only competing bids for a Pumpback or Buildable Lot will be considered. If the primary bid is for a Privacy Lot, competing bids for a Privacy, Pumpback or Buildable Lot will be considered.). If no competing bids are made during the two-week public notification period, the Board shall accept the primary bid. If additional bids of equal or higher value are received for the lot, an auction of the lot will be conducted at the next Board meeting. All bidders will be asked to attend. If the winning bidder does not consummate the purchase and there is only one other bidder at the auction, the second place bidder will be given the opportunity to purchase the property at his recorded auction bid price. If there is more than one other bidder at the auction, another auction will be held for them.

 

i.       The Board is not required to accept bids that are felt to be not in the best interest of the Island.

 

j.       This real estate policy is administered by FII without discrimination based on race, color, religion, creed, national origin, ancestry, age, sex, or handicap.

 

APPENDIX:

 

·        Official Bid and Easement Form