Whitefield Selectmen Vote to Waive Foreclosure on Clary Lake Dam

The Whitefield Board of Selectmen voted unanimously to waive foreclosure on Clary Lake dam Tuesday, March 3. The waiver of foreclosure was filed with the registry of deeds

Friday, March 20, ending the possibility of transferring ownership of the dam from Pleasant Pond Mill LLC to the town of Whitefield by default.

Whitefield has a tax lien on the dam for non-payment of 2013 property taxes in the amount of $238.68. It was one of the properties included in Whitefield’s automatic

foreclosures which went into effect March 23.

Two interrelated properties owned by Aquafortis Associates LLC situated downstream from the dam were also slated for automatic foreclosure. Aquafortis Associates LLC

owed 2013 property taxes in the amount of $149.38 on the 2.9 acre parcel of land with the Clary Mill and $132.62 on an adjacent 1.05 acre, according to town clerk Aaron Miller.

In an emergency meeting held by selectmen Thursday, March 19, the three selectmen in attendance voted to also waive foreclosure on those two properties. The waiver

of foreclosure was moot, however, because Aquafortis Associates LLC paid the outstanding 2013 property taxes the following day, Miller said.

Property taxes on the house on top of Clary Lake dam, also owned by Aquafortis Associates LLC, are paid up to date, Miller said.

Richard Smith, of Aquafortis Associates LLC, attended the Whitefield selectmen’s meeting Tuesday, March 24 to request the waiver of fees and interest accrued from

non-payment of taxes for the two properties that faced foreclosure.

Smith said he was making the request due to a previous mistake Whitefield made in taxing the house on top of Clary Lake dam.

According to Smith, Whitefield did not properly record the property transfer of the house between Pleasant Pond Mill LLC and Aquafortis Associates LLC. Until 2013,

property taxes on the house were billed to Pleasant Pond Mill LLC not Aquafortis Associates LLC, the owner.

Pleasant Pond Mill LLC manager Paul Kelley joined Smith at the March 24 meeting to explain the companies stopped paying taxes to draw selectmen’s attention to the

problem.

Paul Kelley (left), of Pleasant Pond Mill LLC, and Richard Smith, of Aquafortis Associates LLC, speak about the non-payment of property taxes at the Whitefield selectmen’s meeting Tuesday, March 24. (Abigail Adams photo)

According to selectmen, the problem was corrected in 2013 and the fees and interest that accrued on taxes for the house had been waived. Selectmen denied Smith’s request to

waive interest and fees on the two properties subject to foreclosure which had not been the subject of a tax error.

While Smith has paid the full amount owed to Whitefield for 2013 property taxes, Kelley has not. On March 23, when Whitefield automatically foreclosed on its

delinquent accounts, Clary Lake dam was not included.

The waiver of foreclosure on Clary Lake dam is the first time selectmen have exercised their right to waive foreclosure on property not in the best interest of the

town to own. A warrant article giving selectmen that authority was included in the town warrant approximately three years ago, selectmen said.

Pleasant Pond Mill LLC manager Paul Kelley has approached Whitefield selectmen on several occasions with proposals to transfer ownership of the dam to the town which

Kelley called the dam’s “logical owner.”

Whitefield held two special town meetings to consider assuming ownership in May and November 2013. At both meetings, residents voted overwhelmingly to not pursue

negotiations for ownership of the dam – a property embroiled in a series of complex financial and legal entanglements.

According to Kelley, Pleasant Pond Mill LLC formed as a partnership in 2003 with the intention of rehabilitating the Clary Mill under a National Registry of Historic

Places program.

In 2006, Kelley joined the partnership with the hope of moving the development forward. The project, however, was ultimately unsuccessful. According to Smith, the

planning board rejected applications for development because the lots involved did not meet minimum lot size requirements for development.

According to Kelley, the property that encompasses the Clary Lake Dam and mill was split into four separate properties by a previous owner – one of those properties

being a house not connected to the property it rested on.

“It’s been a mess for decades,” Kelley said. “The company thought it had a solution in restoring the property but that failed.”

The original Pleasant Pond Mill LLC partnership dissolved in 2010 with some original partners forming Aquafortis Associates LLC.

Aquafortis Associates LLC took control of the Clary Mill and the acre downstream from the dam, in addition to the house on top of the dam. Pleasant Pond Mill LLC

retained ownership of the Clary Lake dam, despite not holding the mortgage on the dam.

The mortgage on Clary Lake dam is held by Arthur Enos, the former president of the Clary Lake Association. According to Kelley, Pleasant Pond Mill LLC is the

property owner listed on the deed, however, the company is unable to sell or transfer the property because it does not hold the dam’s mortgage.

The properties downstream from the dam hold a covenant that restricts the flow of water from the dam to address issues of flooding, Kelley said.

In addition to the complicated relationship between Aquafortis Associates LLC, Pleasant Pond Mill LLC, and the Clary Lake dam’s mortgage holder, Pleasant Pond Mill

LLC and the Clary Lake Association, composed of 63 lake shore property owners in Whitefield and Jefferson, have been involved in a multi-year legal dispute regarding Clary

Lake’s water level.

The Clary Lake dam is approximately 112 years old, Kelley said, and structurally breached. It is unable to impound water safely, Kelley said.

The Clary Lake Association filed a petition with the Department of Environmental Protection in 2012 to get an order to set the water level at Clary Lake, which were

at historic lows, according to The Lincoln County News archives. The association’s petition was successful and the DEP issued a water level order in January 2014.

The order was appealed by both Pleasant Pond Mill LLC and Aquafortis Associates LLC in Lincoln County Superior Court. The issue is still in mediation.

The DEP water level order includes an order for Pleasant Pond Mill LLC to fix the dam. According to Kelley, the DEP does not have the jurisdiction to order such a

repair.

Kelley said he has also been threatened with a lawsuit from a property owner on Clary Lake if he complies with the order. “It places Pleasant Pond Mill LLC in an

untenable position,” Kelley said.

Kelley announced his intention to dissolve Pleasant Pond Mill LLC at the March 24 meeting. According to Kelley, the dam has no viable economic use and the legal

situation is costing him tens of thousands of dollars.

Selectmen said the tax bill will continue to go to the property owner listed on the dam’s deed, regardless of whether the company dissolves or not.

In a separate interview Kelley said the town should assume responsibility for the dam. Kelley said the dam is responsible for creating Clary Lake which has been a

source of significant tax revenue for the town and which benefits the citizens.

Selectmen said they were complying with the request of voters by waiving foreclosure on the dam. George Fergusson, secretary of the Clary Lake Association, said the

association has not taken an official position on the waiver of foreclosure.

Smith said he is still interested in moving forward with the development of Clary Mill and asked selectmen to reconsider a 2013 application to merge Aquafortis

Associates LLC properties for tax and development purposes.

So long as a water level order is attached to Clary Lake dam, Smith said, he has no interest in pursuing ownership of the dam either.