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December 28, 2010 Portlandbiz

Island residents seek compromise after losing zoning battle

After losing part of their court case against a proposed hotel/condo development on Great Diamond Island, a group of residents is now hoping to garner a compromise from the developer.

The Business and Consumer Court in West Bath recently found that the Friends of Great Diamond Island could not stop a proposed multi-million-dollar redevelopment of part of Fort McKinley, which was built around 1900 and used as a military base on the island to protect Portland Harbor through World War II. The group had challenged the city's zoning decision that would allow the development, but still hopes to win its related challenge of a homeowners' association's vote to approve the project.

Meanwhile, a judge has called for a settlement conference between the disputing parties for early January, according to William Robitzek, the attorney representing the plaintiffs. "We're trying to negotiate for some modifications that will be beneficial to life on the island," he says, while declining to be any more specific.

David Bateman, one of the project's developers, says this will be the third mediation attempt during the prolonged legal case, which was filed in 2008. Though he hasn't heard details about the proposal, he says, "There is nothing we've heard to date that is in the realm of anything we would entertain." He adds that mostly what he's heard so far from the Friends group would stop all development.

In 2008, Bateman -- who is also the developer of the Portland Harbor Hotel in the Old Port, which is managed by Hart Hotels of Buffalo, N.Y. -- first proposed to turn the fort's old barracks and a hospital into 20 condo units as part of the current Diamond Cove luxury community, which Bateman developed in the1980s. The original intention was for investors to own the units and rent them to visitors. Bateman claims the Inn at Diamond Cove development could generate $60,000 in property tax revenue for the city and lower islanders' property taxes. Should the case be decided in Bateman's favor, he hopes to move forward with the project this spring. Bateman still needs to go through the city's site approval process.

Great Diamond Island has fewer than 100 year-round residents. The opposition to the project has centered on whether the development would make the island feel more like a fancy resort than a sleepy, out-of-the-way neighborhood.

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