Billionaire Mitchell Rales' summer home along the shore in Northeast Harbor. He has filed a lawsuit seeking to block his neighbors' use of the beach and pier. FILE PHOTO

Billionaire Mitchell Rales sues neighbors to block beach access



MOUNT DESERT — Billionaire Mitchell Rales has filed a lawsuit seeking to bar descendants of Charles Eliot, one of the founders of Acadia National Park, and other neighboring property owners from using the beach and wharf on his property in Northeast Harbor.

The suit was filed Sept. 8 in Hancock County Superior Court on behalf of Peabody Land LLC, the legal owner of Rales’ multimillion-dollar residential compound at 137 Peabody Drive.

Rales is asking the court to declare that some of the defendants have no right to access the beach by crossing a corner of his property and that none of the defendants have a right to use the beach or wharf “for any private purposes” including “holding parties, igniting fireworks, sunbathing, gathering, picnicking or storing boats.”

Three of the defendants – Alexander, Peter and Paul Goriansky – who own a summer residence at 153 Peabody Drive, are descendants of Eliot. Eliot, who was president of Harvard University, was a leader of the efforts in the early 1900s to acquire and preserve land on Mount Desert Island for “free public use.” Those efforts led to the creation of what became Acadia National Park.

Between 1881 and 1919, Eliot bought several properties along Peabody Drive, including waterfront lots now owned by Rales and others.

Among the seven defendants in Rales’ suit is Elizabeth Rendeiro, a trustee of the Frances H. Eliot Trust, which owns and maintains the large summer home that Charles Eliot built in 1897 across Peabody Drive from what is now the Rales property.

The original summer "cottage" of Harvard President Charles Eliot, one of the founders of Acadia National Park, was sold in 2007 for $5.5 million and later torn down by current owner Mitchell Rales to facilitate construction of $15.5 million summer home. FILE PHOTO

The original summer “cottage” of Harvard President Charles Eliot, one of the founders of Acadia National Park, was sold in 2007 for $5.5 million and later torn down by current owner Mitchell Rales to facilitate construction of $15.5 million summer home.
FILE PHOTO

Eliot sold two Peabody Drive properties and a portion of a third in 1883. The deed provided for an easement along a footpath to the beach that crossed a corner of what is now the Rales property. The easement was for “boating purposes” and was for the use of “the occupants of one private house and no more to be built by [Eliot], his heirs and assigns on the shore … .”

Eliot descendants have enjoyed the use of the path, pier and beach for more than 100 years.

Rales claims in his suit that John Anthony, owner of the seasonal 123 Peabody Drive, or The Wynnestay LLP, which owns 125 Peabody – but not both – has the right to access the Rales beach for boating purposes, but does not have a right to access the wharf.

Anthony, whose primary residence is in Little Rock, Ark., said Wednesday that he has dropped his claim to an easement on the Rales property. He said he had asked Bar Harbor attorney Nat Fenton to research the history of the property, including the deed that permitted access from only one of two lots.

“He found that we had a very dubious claim to any easement, so we have released any claim,” Anthony said.

Asked if that means he is no longer a party to the suit, he said, “I guess that would depend on the court, but I would think not.”

Some of the property that Eliot owned was divided following his death in 1926. A 1927 deed provided an easement for the owners of two properties – the Goriansky property and the 131 Peabody property now owned by Coffeepot Realty LLC – across the 137 Peabody Drive property “for foot passage only to and from the wharf or landing place… .”

In 1947, Frances H. Eliot, sold the 137 Peabody property, but reserved an easement “by footpath only to and from said wharf or landing place” for herself and her heirs and assigns.

Based on the provisions of the various deeds, Rales maintains that, while some of the defendants have the right to access his beach, none have the right to actually use it for anything except boating.

Rales implies in the suit that he filed it because some of his neighbors and their guests have used his beach and wharf for parties.

“These wrongful parties have included loud music, fireworks, crowds, nighttime activities, alcohol and other offensive acts and disturbances,” the suit alleges.

“Defendants, their guests, tenants and invitees have been wrongfully sunbathing, gathering, picnicking, using the wharf, storing boats and engaging in other inappropriate activities.”

Rales also contends that the defendants “have completely failed to honor and respect … privacy and private property” and that “despite discussion and repeated notice, [they] have failed and/or refused to cease their wrongful conduct.”

Rales did not respond personally to the Islander’s request for comment on the lawsuit. He directed Trenton attorney Michael Ross, who is not involved in that suit but has done other legal work for Rales, to respond.

“My understanding is that the lawsuit was filed because it seemed to be the best option that’s available to Peabody Land, as well as its neighbors, so they can better understand exactly what rights and responsibilities they have to one another by virtue of the easements that were established in 1883, 1927 and 1947,” Ross said Tuesday.

None of the defendants in the suit could be reached for comment.

Rales bought the 4.6-acre Peabody Drive property from the estate of Susan Mary Alsop in 2007 for $5.5 million. He razed both the house, which was the original Eliot summer home, and the wharf.

In addition to asking the court to restrict his neighbors’ access to and use of his property, Rales wants them to reimburse him for an unspecified portion of the cost of building the new wharf.

“Prior to 2007, the wharf … was in such a state of utter disrepair that it was dangerous to use, unstable and in risk of collapse,” according to the suit, which puts the cost of building the new wharf at “more than $500,000.”

The suit cites the 1947 deed as stating that those who enjoy the right of way across the 137 Peabody property “shall be subject to the obligation to pay a proportionate share of the cost of maintenance of the wharf or landing place … .”

Accompanying Rales’ suit was a request that the defendants submit a number of documents and other materials including “all photographs which depict any portion of any of the parties’ properties,” any correspondence related in any way to “the beach barbecue party held at the ‘Goriansky Beach’ on Sunday, August 16, 2015” and all material such as invitation lists and receipts that relate to “any parties or celebrations, from 2007 to date, which occurred on any portion of the beach or wharf on the Peabody Property.”

Also requested is anything that identifies the people who have “walked on, crossed or used the Peabody Property” since 2007 and all correspondence, guest books or rental agreements that identify anyone who has rented any portion of the defendants’ property or stayed overnight on their property since 2007.

According to “Forbes” magazine, Mitchell Rales has a net worth of $3.5 billion. That ties him with 10 other people for 171st place on the magazine’s 2015 list of the 400 richest Americans.

His Peabody Drive compound is assessed for tax purposes at $15.6 million. His primary residence is in Potomac, Md.

 

 

Dick Broom

Dick Broom

Reporter at Mount Desert Islander
Dick Broom covers the towns of Mount Desert and Southwest Harbor, Mount Desert Island High School and the school system board and superintendent's office. He enjoys hiking with his golden retriever and finding new places for her to swim. [email protected]