BREAKING NEWS: Owner seeking motel/hotel permit cited for illegal rental of apartment

Cottage Street spa represented by ex-Planning Board chairman

BAR HARBOR, Aug. 28, 2023 - The health spa on Cottage Street applying for a permit to operate transient accommodations (motel or hotel) has been illegally renting at least one of the units, according to a citation filed by Code Enforcement Officer Angela Chamberlain on Aug. 22.

Destination Health at 124 Cottage Street which owns four apartments behind the spa at 7 Brewer Avenue was renting at least one apartment without a short-term rental registration.

The QSJ reported Aug. 12 that the owner had failed to renew her STR registration by the May 31 deadline but did not disclose that when she appeared in front of the Planning Board Aug. 2 with her representative, former PB chair Tom St. Germain, to apply for a permit to operate the units as a motel or hotel.

St. Germain convinced the board to designate the application as a “minor” change to avoid having to hold a public hearing and to allow the planning director to decide instead of the full board.

The fine for operating a vacation rental without a registration is $1,500 and Destination Health will not be allowed to apply for a STR registration unless the fine is paid.

In the case of a second violation within one year, the fine is $3,000.

St. Germain wrote in an email July 26 to Planning Director Michele Gagnon that “the applicant intends to change from one permitted use in Downtown Village 2, to another permitted use in that district.”

St. Germain’s assertion was the basis for a 4-1 vote by the board to grant his request to vet the application without a public hearing. Two board members told the QSJ they were not aware of the STR registration lapse when they discussed the application.

Board secretary Elissa Chesler said had she known, she would have had more questions “about the true intent of the application.”

Only new member Cosmo Nims expressed concern whether the change was as seamless as the applicant represented. He voted against the motion to skip the public hearing.

The purpose of the vacation rental ordinance passed by voters in November 2021 was to place a cap on new registrations and allow existing registrations to remain fallow, if not renewed, until vacation rentals declined to 9 percent of the town’s housing stock. A total of 42 registrations, or 9 percent of all VR2s, were not renewed by the May 31 deadline, including four by Destination Health.

Some owners are saying the four-night minimum is making it harder to rent VR2s which demonstrates that the cap is starting to work. But allowing them to change to transient accommodations would end run the vacation rental cap.

VR2 is a class of rentals which requires a four-night minimum. VR1 has a two-night minimum and must be owner-occupied.

St. Germain and board member Joseph Cough voted against the vacation rental ordinance in the fall of 2021. That November, citizens voted overwhelmingly 1,260-840 to approve the ordinance.

Town Council member Matt Hochman proposed at the council meeting two weeks ago that the town adopt a moratorium on new transient accommodation permits to enable a review of whether the town has exceeded its capacity to handle visitors.

The town now has more motel/hotel rooms, 3,500, than dwelling units, 3,416, according to data provided by the assessor and Chamberlain.