Acting in haste



To the Editor:

Almost three months after the MDOT expressed a willingness to sell the ferry terminal property to the town with no strings attached for $3.5 million, the Town Council will vote to sign an amendment to the option agreement to include that term.

The town can still take the huge risk of buying the land for $2.5 million with many strings attached. The worst of those strings would be that the MDOT could reclaim the land five years post-sale if the maritime transportation facility built by the town didn’t meet the MDOT’s standards. The town could only escape this forfeiture by paying $4 million more to the MDOT.

Which is more prudent, paying $1 million more now or risking paying $4 million more five years from now? The risk of a forfeiture in five years to the MDOT must be avoided. The town saves no money by buying the land at the currently reduced price.

It can finance an additional $1 million dollars over a 20-year bond or borrow $4 million the bank would escrow for five years to buy the MDOT out at that time. Financing $4 million over five years has the identical financing cost of financing $1 million over 20 years. Do the math. The annual principal and interest would be one fourth as much for four times as long a loan period.

There are no savings by paying $2.5 million now and risking paying an extra $4 million later. If the MDOT declared a forfeiture, we will have paid $6.5 million for property we could have purchased for $3.5 million. Only a council acting in haste would buy the ferry terminal for $2.5 million with so many strings attached.

Art Greif

Bar Harbor

 

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