BIg Changes in the area near Baxter State Park - Lease sale

[peakbagger]

For those who visit BSP and possibly have been interested over the year in buying a camp near there have probably found out that there are a lot of camps for sale but most are on leased lots. Few want to buy camp on leased land as there are typically restrictions on what can be built and there is always the chance the landowner will decide to sell the property to another owner with less attractive leasing terms or just decide to stop leasing. This made financing difficult and in general kept most folks from buying.

It appears that that market is going to change soon

http://bangordailynews.com/2012/04/...-leased-camp-lots-construction-boom-expected/

I expect many of the camps currently on sale will get suddenly get a lot more expensive and other camps will go on the market when the owners find out the asking price for the land as they may not be able to afford it. This happened when Jame River sold the lease lots on Lake Umbagog in NH with many leaseholders seling out to intermediaries when the couldnt come up with the asking price. Maine is discussing watering down the restrictions on unorganized territories which most likely is going to make more subdivisions on remote lakes appear in the next few years.

The article mentions initially selling the lots that have access to public roads, this could be a major sticking point for many of the camps in the area as they are accessed by logging roads and generally there is no mechanism in effect for maintaining the roads or doing major repairs. There already have been cases in Maine (Azicohos) where landowners on isolated lots are being threatened by the surrounding major landowners to share in the cost to upgrade access roads to comply with various environmental upgrades (predominately major culvert upgrades to restore riparian habitat throuugh the length of the culvert). The option they are being given is to pay up or plan to access their property by boat as the major landholder will stop maintaining sections of road. Once a major bridge or culvert "blows" out after a storm, its doubtfull that the campholders have the resources to fix and if they do logging traffic will quickly break whatever is put in. The net result is the major landowner gets a short term windfall from the sale and then can continue extracting dollars on a long term basis from the former leaseholders in the guise of road maintenance.

 

[MichaelJ]

Who owns the building(s), if any, on these camp lots? Could an unhappy lessee legally destroy their camp to reduce the "fair market value" of the property prior to sale?

 

[RoySwkr]

Who owns the building(s), if any, on these camp lots? Could an unhappy lessee legally destroy their camp to reduce the "fair market value" of the property prior to sale?

I believe that the lessee owns the structures and can legally remove them at any time, in some areas leased lots contain primarily mobile structures while in others the lease prohibits them

The landowner sets the price and is not obligated to sell at all so trashing the area would seem to offer no advantage

A lot of locals including unemployed millworkers might find $75-400k too much for a camp lot considering the palace that will now buy downtown

 

[peakbagger]

With regards to the Millinocket area, there are many elderly retired folks who will not be able to come up with the money. Many lost their retirements over the years when a prior owner went bankrupt. Many retired early and had no access to medical insurance so they are tapped out. Realtors will come to them and "buy" the rights to the camp and the associated right to buy the land. The owner on paper will buy the land and immediately transfer the title to the realtor. The owner will get some profit and the realtor will make a bundle selling it to someone from out of state with money. Happens all the time all over Maine. Many of the camps are grandfathered from shoreland zoning and any known building code. They are typically mostly of value for the opening on the lake front and associated site work on the shoreline which is no longer legal. Generally the building gets demolished and a new "palace" is built on the footprint. The alternative with a new undeveloped lot is to build well back from the water with only a zig zag shaped path to the shore with severe restrictions on any vegetation removal. The new regulations lead to a much less developed shoreline with fewer impacts to wildlife but most folks want to be right on the water.


By the way, most of the papermills that owned large amounts of forestland regarded leases as "employee benefits", they were used as a way of rewarding company loyalty and the yearly lease costs were minimal ($100 a year). The companies wanted employees out on their lands as they would keep and eye out for trouble and occasionally the campowners would put out fires left by day trippers. The majority of the land is now owned by investment firms and the leases have gone up substantially and usually increase each year. Brookfield Asset Management (the compnay seling the leases) is the firm that shut down Millinocket papermill after sucking whats left of it dry, raided Fraser Papers and stripped their assets (including shutting down the Berlin NH pulp mill) until they went bankrupt and got the US taxpayers on the hook for reportedly 60 million dollars worth of pension benefits. They then ended up with majority interest in Twin Rivers paper (former Fraser Madawaska) which they recently announced they would sell as they didnt want to own a papermill. They are definitely not out to make friends with this sale, its strictly business.

Some general stories about lease lots that may be of interest.

There was a new landowner in the Stratford (bog) Pond area of NH 10 to 15 years ago that came in and wanted to sell high end lots or "greenmail" some environmental group into buying the parcel. He reportedly raised the lease prices substantially on the existing camps to drive out the current leaseholders. Their lease like many required that the campowner remove the structure should the lease ever end. He "gratiously" allowed the lease holders to leave the camps in place. Apparently some owners took offense and there were a fair share of camp burnings as the deadline approaches. Not sure if anything was ever done with the area. It was advertised in the New York Times as a kingdom lot for awhile but not much demand for a bog that occasionally looks like a pond.

There was a camp on Parmacheenee lake that was on leased land, the land owners went to the leaseholders and told them they had to come up with a large amount of cash to buy the land (reportedly 100K several years ago), there was no negotiations as someone was waiting in line to buy the land. They couldnt come up with the cash and the same camp was for sale for 400K last year by a realtor in Rangeley.

Last year I saw a camp on the AT in Maine that was abandoned when the National Park Service elected not to renew the prior lease. It looked like the prior owners got up one morning hopped in their car and never came back. They had left everything (furniture, kitchen utensils etc)except the woodstove (which may have been taken out prior to when I saw it) . Its too bad, it was a nice cabin right on an undeveloped pond next to the AT but the NPS plans to demo it as it is too close to the road. I expect a few AT hikers have used it for shelter in the meantime.

 

[bikehikeskifish]

I've seen this same trend even in more affluent vacation towns like Sunapee (and other towns on the lake). Smaller lots with cottages have been purchased, in some cases adjoining lots combined, and palaces built in the footprints of the original cottage, all the while driving prices above astronomical. Similar restrictions on cutting vegetation exist there too.

Tim

 

[peakbagger]

NH did not have comprehensive shoreland zoning until recently so it was up to the towns. The state recently put in default standards that cover the entire state, they are very restrictive. The town can get stricter but not less strict. It has made a lot of lots basically unusable except for recreational lots with no structures

http://des.nh.gov/organization/divisions/water/wetlands/cspa/categories/rules.htm

 

[bikehikeskifish]

Yep. My point was to illustrate that even local, employed software engineers are not necessarily able to afford lake front, or near lake front... it's not just unemployed mill workers (to Roy's comment.) Most of the Sunapee owners are from executive jobs out of state (New York comes to mind...) They aren't making any more land, or waterfront, as they say...

Tim

 

[expat]

Not all leaseholder sales are that bad.

I have a small cabin on Nicatous Lake and the paper company sold most of their leased lots a couple years ago. The prices were very reasonable, and every one of the leaseholders was able to purchase the lot. We have seen one or two cabins have been replaced by larger ones, but not mansion-types at all at this point.

 

[peakbagger]

Were the lots owned by Brookfield Asset Management or a conservation organization? I would be curious as the conservation groups have traditionally kept the the purchase price low while Brookfield may not.

 

[expat]

Sustainable Forest Technologies LLC was the company that did the sales. The land had previously been leased from Champion, International Paper, and I can't recall who else.

 

[peakbagger]

Thanks, the other firms like you bought from were probably more interested in good landowner relations and therefore their pricing was more reasonable for the leaseholders. I dont expect Brookfield will be as generous.