Barnhart was living in one of the homes at the time of the deal, which was provided for her use by the Department of Corrections. The property was sold to Barnhart and Gallagher for $175,000. However, the town of Thomaston had assessed the three houses and five acres located in Ship Circle at $458,000.
As part of the deal, the state agreed that prisoner work crews would provide mowing and landscaping, and would remove snow and trash on the property. In exchange Barnhart agreed to let prison guard trainees stay in one of the houses for the next four years.
State lawmakers had ordered the property sold. “Under the direction of the 124th Legislature, the fiscal year 2010-2011 budget was to be balanced, in part, by booking $1.5 million in anticipated revenue from the sale of a list of state-owned properties, which included the Ship Circle properties in Thomaston,” a press release from the governor stated.
Negotiations on the deal began in the fall of 2010, and the Department of Administrative and Financial Services completed the property sale to Barnhart in June 2011. State officials defended the deal as being the best they could obtain, but the evidence indicates otherwise.
Before the transaction was finalized, local resident Bill Bird heard the property was available and contacted CBRE Boulos, the company hired to coordinate the sale. A January 18, 2011 email from William Leet, Director of the Division of Leased Space, to Chris Paszyc of CBRE Boulos stated, “I had a conversation with Bill Bird from Thomaston, who was interested in the homes on Ship’s Circle. I was not sure where the negotiations are with the potential buyer, so I gave him your number to call to discuss. What is the situation in Thomaston?”
“I have spoken to Bill Bird – it appears he had heard at Thomaston Town Hall that the property was selling,” Jon Leahy of CBRE Boulos responded the next day. “I have expressed that we are in basic agreement with a prospective buyer. He was accepting of that response.”
“I didn’t have much choice,” Bird said about his acceptance of Leahy’s reply. As for the property sale going through as it did, without sufficient public notice, Bird complained, “I don’t think it’s right.” He said he may have paid more to buy the property than the state received from Barnhart and Gallagher.
In fact, the sale of the property to Barnhart violated state law, which specifies that “No trustee, superintendent, treasurer or other person holding a place of trust in any state office or public institution of the state shall be pecuniarily interested directly or indirectly in any contracts made in behalf of the State or of the institution in which he holds such place of trust, and any contract made in violation hereof is void.” Maine Revised Statutes, Title 17, Chapter 101 § 3104.
Based upon that statutory language, Attorney General William J. Schneider declared the property sale to Barnhart and Gallagher to be in violation of the law and therefore void. “We suggest that the parties and their counsel meet as soon as possible to discuss the process for unwinding this matter,” Schneider wrote in a July 8, 2011 letter.
That unwinding did not go smoothly. Since Barnhart had obtained a mortgage on the property, the mortgage had to be paid off so the property could revert to her, and then be returned to the state. The transaction was completed on September 22, 2011 at a loss of $2,000 to the state, which repurchased the land for $177,000.
In the meantime, the legislature held hearings regarding the illegal sale. Barnhart attended one of those hearings and said she had done nothing improper in connection with the real estate deal. Lawmakers agreed, but said the process for sales of state property needed to be changed and made more uniform.
“I think this has been on [our] radar for awhile, both the sale and the disposal of state-owned property, but the Thomaston sale certainly brought it to the forefront,” noted state Rep. David Burns.
Of course, one would hope that when a state prison warden buys state property, including the house she is living in, for less than half its assessed value, state officials would take notice before rather than after the fact.
Sources: The Herald Gazette, http://knox.villagesoup.com, www.sunjournal.com, Bangor Daily News
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