The insiders A real-estate firm owned by prominent Baldacci supporters emerges as a major landlord for state agencies BY LANCE TAPLEY

Part Two of Three: Business as Usual in the Era of Baldacci? (Click here for part one of this series)

Harper’s Development, a real-estate company headquartered in Winthrop, has been extremely successful in getting the State of Maine, the capital region’s major tenant for office space, to put employees in its several local buildings. Since it began acquiring new leases from the state in mid-2003, it has acquired almost three-quarters of the square footage of the new office-space leases in the area, according to the state's figures.

Harper’s owners are, politically, some of Democratic Governor John Baldacci’s most visible financial supporters and include some of the most powerful and influential men in the state. Harper’s success with state leases roughly began six months after Baldacci’s inauguration as governor. It was awarded a contract, which did not go out to bid, for 59,000 square feet of state Department of Health and Human Services offices in its Key Plaza building in downtown Augusta. This contract represents the second largest state-government office-space lease in the area.

Combine who Harper’s owners are with its success in gaining state contracts, and the suspicion naturally arises of insider favoritism. But Harper’s CEO complains that the perception of favoritism is an unfair affliction for his company, although he says he understands it.

WEALTH AND POWER

If you started from scratch to put together a cluster of Maine wealth and power, you couldn’t do better than the Harper’s partners:

Severin Beliveau is among the most well-known lobbyists in Augusta — or notorious, depending on your perspective. A former state senator, Maine Democratic Party chairman, host to former President Clinton when he last visited Maine, expert political fundraiser, and head of Baldacci’s inaugural and transition commission, sometimes he is admiringly called "Mr. Democrat"; sometimes he is criticized for lobbying for tobacco, liquor, gambling, and big-business interests. (For more on Beliveau, see Lance Tapley’s "Pulling the Strings," Phoenix, June 20, 2003.)

John Orestis, like Beliveau a Georgetown graduate and a lawyer, heads up the largest nursing-home company in Maine. He has long been a real-estate developer, and he was mayor of Lewiston and a Democratic state representative.

Chris Harte, based in Portland, sits on the board of three public companies: Harte-Hanks, a Texas global marketing corporation founded by his family which sold its newspaper and broadcast chain to Scripps in 1997 for $775 million; Geokinetics, which serves the oil and gas industry with seismic information and is also based in Texas; and Crown Resources, a Colorado-based mining company.

In 1992 Harte came to Maine to run the Portland Press Herald and Maine Sunday Telegram for a couple of years. As a big-time donor to politicians, he was a plaintiff in the unsuccessful challenge in federal appeals court to Maine’s Clean Election campaign-reform law, which features public financing. In 2004, he publicly considered running as a Democrat against Republican US Senator Susan Collins.

Kevin Mattson is Harper’s junior partner and the company’s CEO. In addition to a stint managing the Maine Democratic Party, his past political activities include being Maine liaison of Donald Sussman, a Deer Isle summer resident and multimillionaire arbitrage expert who has financed some of the state’s environmental causes. Mattson’s relative youth — he’s 36 — casual dress, and liberal views (he has worked as a lobbyist for an environmental outfit run by former Green Party gubernatorial candidate Jonathan Carter) make him the most unlikely member of a powerful business-oriented group. But, like his partners, Mattson is exceptionally well connected.

Among this group of Harper’s investors, Mattson describes Beliveau is the "go-to guy" for connections. He describes Orestis as the partner he consults when he needs someone to look over the company’s numbers. He says Harte is the least involved with Harper’s on a day-to-day basis.

A SPECIAL STATUS?

There is a pile of data that circumstantially suggests Harper’s Development enjoys a special status in Augusta, although there is no evidence that laws have been broken.

Including the Key Plaza lease, close to 73 percent (or 133,919 square feet) of new leases for capital-area office space (184,622 square feet) contracted by the state since July 2003 were put in Harper’s buildings, with no bidding competition among landlords for 85,103 square feet of this space, according to figures supplied by the state. In addition to Key Plaza, many offices went to Harper’s Central Maine Commerce Center, the giant former Sanmina-SCI plant off Civic Center Drive in Augusta, but also some to the company’s North Park building, not far from the Commerce Center.

For one lease, which Harper’s obtained by winning a bid, local landlord Mark Warren says, "I was told by public safety employees they were going to SCI before the ratings sheet had been prepared," referring here to the scoring sheets used by state officials who decide the winning bids. Warren had the Department of Public Safety offices moved from his downtown Gardiner building to the Harper’s Central Maine Commerce Center. Warren believes the bids were merely a formality; that the move to Harper’s had already been decided and expressed to employees.

"We have an open book here," responds Elaine Clark, director of the Bureau of General Services, which contains the state’s leasing unit. "The governor’s office has zero involvement in the process" — except, she adds, in one attempted consolidation of Department of Health and Human Services offices in the Presque Isle-Caribou area. "It was a political mess" involving legislators unhappy with the proposal, she says. The consolidation was stopped.

Clark sees no problem with offices being put in Harper’s buildings without the state asking for bids from other landlords. "The lease space division doesn’t even have to advertise," she says. "Harper’s has been making incredible proposals," meaning they are a good deal for the state.

A large impetus behind her bureau’s decisions on office space in the Augusta area, she says, is the state’s interest in agency consolidation, whenever possible trying to put offices that work together in close proximity. Warren lost the bid for the public safety offices and the leases went to Harper’s’ big building on the Augusta outskirts because, she says, the Department of Public Safety wished to consolidate related offices there such as the Maine Emergency Management Agency (MEMA), and this bureaucratic desire drove some of the no-bid awards such as one involving MEMA.

And the Harper’s bid to move Public Safety offices to Augusta (the lease was up) appears to represent considerable savings for the state. Over the 15-year life of the lease, Harper’s bid was $1.8 million lower than Warren’s proposal to keep the offices in Gardiner, Clark says.

As for the alleged public-safety personnel remarks relayed by Warren, Clark says the employees may have wanted to move to Harper’s’ big building and that desire may have been expressed before the bidding process was completed — but "[public safety employees] had no control over that" decision, she says.

In regard to this move, Warren can’t understand why Public Safety was moved when Governor Baldacci’s has made a public commitment to put state offices in downtowns, a policy mandated anyway by the Legislature during the Angus King administration. Harper’s Central Maine Commerce Center is four miles from Augusta’s center, on the highway to Belgrade. But Clark says that there is a second consideration, an emphasis on "designated growth areas," and that Harper’s Central Maine Commerce Center is in one.

When bids are received, she says, the committees that score the proposals from landlords are objective, though she also says politically appointed people such as bureau directors sit on some of them. She says the committees balance a variety of factors including state policy favoring downtowns as well as growth areas, along with price and suitability of the space.

Although she admits, "The cost of moving state agencies is huge," consolidation comes up often in conversations with her and other state officials as a reason for the several moves into Harper’s buildings (see "Baldacci’s bunker," on page two of this story). During a tour of the Central Maine Commerce Center, Stephen McCausland, the Public Safety spokesman, exults over the merits of consolidation, especially when public-safety-related agencies can be all together in a time of emergency. He also likes the size of the department’s space, which in the giant building could be configured to the department’s specifications. The state’s information services unit and Department of Transportation offices also moved into the Commerce Center.

When the Department of Health and Human Services’s Bureau of Health moved offices into Harper’s Key Plaza, Clark says consolidation here, too, was a reason for putting them there without bids being asked; some health bureau offices were already in the building, allowing for better communication.