Town Council Grants Tax Charge-Off 
on Michaud Estate, Ireland Cries Foul

By: David Deschesne

Fort Fairfield Journal, February 23, 2011, p. 1

FORT FAIRFIELD, Maine—The Fort Fairfield town council recently voted to give the Michaud estate over $7,000 in credit against its property tax debt in exchange for cleaning up and improving property being sold to Stev Rogeski.

The Lawrence Michaud property, located on Route 1a, on the south side of town is being purchased by Rogeski. The location was formerly Michaud's garage and a large automobile junk yard that has for years had all of its junked vehicles cleared out. The Maine Department of Environmental Protection had tentatively “cleared” the land stating it had no pollutants on it, but those findings are always subject to change without notice. It is for that reason that when the property went into foreclosure for back taxes three years ago, the town council waived their right to foreclose and acquire it as tax acquired property because they did not want to be in the chain of title in the event contaminants were found and a Superfund cleanup was initiated against all previous owners or their estates. Annually, the council had renewed its waiver to foreclose for this reason.

“The goal of the Council is to have a property that is an eyesore in the community cleaned up. Because of the environmental concerns, we have not been able to take advantage of our normal recourse, which is to foreclose due to nonpayment of taxes,” said Fort Fairfield town manager, Dan Foster. “Therefore, the collection of taxes due is questionable. The Council is looking to see how they can facilitate an agreement to get this property cleaned up and back on the tax roles.”

At this point in time, Rogeski is taking ownership of the land, purchasing it from the Michaud estate and had asked the town council to charge off the back taxes, totaling $7,200 in return for an equivalent amount spent by him to raze the former garage and clean the area up. This action would be essentially the same as the town council agreeing to give a property owner money to clean-up their own property as long as they can show receipts for the work.

When the town council first entertained this proposal, they did so in executive session, which was followed by a public vote for a memorandum of agreement with Rogeski to charge off the taxes in exchange for the clean-up. The town council passed that motion at their January meeting. However, after careful consideration, it was decided to take the onus off of Rogeski and place it on the Michaud Estate. To that end, the Fort Fairfield Quality of Place council - a group of private volunteers formed to improve the business and residential environment in Fort Fairfield - was enlisted to suggest to the council the idea to grant the tax charge-off to the estate, rather than a particular individual, and made such recommendation to the town council without realizing the deal was already struck with Rogeski a month before.

“The Quality of Place council approved a resolution in support of recommending to the Fort Fairfield town council to charge off the back taxes owed by the estate of Lawrence Michaud as uncollectible in order to facilitate the remediation of the property located at 27 Houlton Road,” Brent Churchill, FFQPC chairman told the Fort Fairfield town council. “It is further recommended that the cost of the cleanup be equal to or greater than the amount of the back taxes being charged off and that liens are not discharged until work and related costs are verified. This property has been identified as being substandard and in a blighted condition. The recommendation is deemed consistent with the Fort Fairfield economic development investment strategy.”

After a motion to approve the charge-off - with an emphasis on razing the garage - and second to that motion, the town council went into the customary discussion phase. “When we talked about this last time, we hadn't really picked the garage as the starting point. Within what window are we looking at that that would happen?” asked town council member, Terry Greenier.

“We're not picking a specific time, what we're picking is an event,” explained Foster. “We would not release the liens until that work had been completed and that amount of money had been spent and been verified.”

Town council member, Mark Babin asked Mr. Churchill what the general feel of the Quality of Place council was. “The general feeling of the council was that they were in support of it. Initially it was from the standpoint of a particular citizen but after discussion it was thought to be better to bring it from the standpoint of the Michaud estate so if this one situation didn't come to fruition, it would leave the door open for other individuals, as well,” said Churchill. “But we were very supportive of getting that location cleaned up because it's the first thing you see when coming into town on Route 1a.”
“One of the distinctions of this motion is that the benefit would be to the estate and that anyone who is willing to spend that amount of money to clean up what is a severely blighted area would receive a lien free property,” said Foster. “This could be the Estate or anyone else that the Executor of the Estate would deem appropriate.”

Jim Ireland, owner of Four Daughter's Redemption Center, was then recognized by the council chair for a comment he had on the property. “I had first refusal on that property and I approached the town on the back taxes and was told the back taxes were set by law and there was nothing the town could do about that. That's why I didn't buy it. I was told the town couldn't do anything for me, so for the town to do it for another individual now I don't think that's right.”

The town council then voted to approve the tax charge-off the Michaud property. Kim Murchison, Ruel Flannery and David McCrea voted 'aye'; when it came to Terry Greenier's vote, he said, “I just got some information thrown at me from the side, I didn't know that situation had occurred [with Mr. Ireland]. However, in the pursuit of trying to get that place cleaned up in the space we're in, taking the Quality of Place council's recommendation, I'm going to say 'aye'.” Breaking a nearly 100% record of unanimous town council votes over the past five years, Mark Babin abstained from voting, saying he was “not sure” how to vote.

The vote to offer property tax credits in exchange for improving and cleaning up a property the tax money is owed on is not only unprecedented, but the town does not appear to have any statutory authority granted to it by the State to even make such a deal to begin with.

After the vote, a discussion was held regarding a land lease Ireland's former wife, Tina had with the town of Fort Fairfield that contains a former potato house where their redemption center business existed and Ireland now is in full ownership of since their divorce finalized in 2010. The building currently has three years of back taxes owed against it and is set to go into foreclosure on March 2 to the town as tax acquired property.

Ireland has been petitioning the town for several years to reduce the $70,000 tax assessment against the building because of its severely dilapidated condition allowing it to never be able to fetch that price in the real estate market. While it was recently reassessed, the new assessment was not made retroactive, so the old taxes are still at the original, inflated assessment. Ireland has not been granted any tax credits to improve or upgrade his building, which is as much of an eyesore and potential safety hazard as the Michaud garage the Michaud estate will be receiving a tax charge-off to clean up.

“It's a complex issue for those who somewhat understand the process and the laws.” said councilman Babin. “Some will ask why do they do it for him, but not for him? That's what I'm looking at. To explain it and explain it well; here it is in black and white.”

“I think the big issue is that three years ago we chose not to foreclose on the Michaud property, for good reason,” said council chair, Dave McCrea. “Because of potential environmental issues, we did not want any part of that property. We did not want to be part of it for a lot of reasons, it would have been too big a risk for the amount of taxes collected. So that's why things kept accumulating against the Michaud property with no intent on our part of ever becoming a part of the chain of title. The taxes wouldn't be worth the risk. [The Ireland property] here is a different story.”

There aren't the same environmental issues and there is a functioning business there that can pay, unlike the Michaud estate which had no money to pay. “I think that's the difference between the two,” said McCrea. “This isn't favoring one person or the other, or one issue or the other.”

“We who are trying to wrap our heads around it and understand it, I think we've got a handle on it as far as the differences,” explained Babin, “but again, understanding that it looks like one favor for one and not a favor for somebody else and that's what it looks like.”

“The Lawrence Michaud estate is one we will never collect taxes from. That land isn't worth anything to us, we cannot ever get taxes from that,” said council member, Kim Murchison. “[Mr. Ireland's] property that taxes are owed on, we could sell that, we could utilize that, we could collect taxes from that. We can't do that with Lawrence Michaud's estate.”

The town council then agreed they have no statutory authority to alleviate Ireland's tax problem and agreed to let the state's statutory timeline on foreclosure continue, with Ireland having the option to pay all of 2008's back taxes - taxes he maintains are his ex-wife's responsibility - prior to the foreclosure deadline. Meanwhile, the Michaud estate enjoys the council’s charging off all of the taxes owed on the property, contingent upon cleanup and improvements, with this writer unable to identify any law or statute allowing them to do so.