OTISFIELD — A unique leasing agreement with the town that allows people to lease lakeside lots in Heniger Park for as little as $1 per year for 50 years is under review.

“They knew this coming, it was a nice ride but they know they have to pay something more,” said Selectmen Chairman Hal Ferguson, who also chairs the Heniger Park Committee.

In his last will and testament, signed Oct. 31, 1943, Otisfield resident Jacob Heniger gave the town of Otisfield several lots amounting to more than 100 acres of mostly woodland on Pleasant Lake off Jacob’s Way, Ferguson said. The will stipulated that the Board of Selectmen would decide what would be done with the real estate and that it be called Heniger Park.

At some point, selectmen decided to lease lots for 50 years. The people leasing the land were allowed to build on it. Most did and have been taxed for the building but continue to pay a fee to lease the land. Each agreement differed, Ferguson said. The leases expire between 2015 and 2035.

“As this all started about 50 years ago, we have no idea how the lot selection was done,” said Ferguson, who believes there probably wasn’t a great deal of demand for the lots 50 years ago. Today, the lots are generally passed down to family members. Only rarely does a lot come up for sale.

As the first of the leases is set to expire, officials began to discuss how and if they would be extended.

Earlier this year, the committee asked John O’Donnell’s assessing office to look at the properties to see what the assessed value would be if they were outside of Heniger Park. The analysis included 11 parcels of property, excluding buildings, within the park. The seven lakefront properties assessed ranged in value from $206,783 to $248,900, while the back lots ranged from $44,340 to $45,900.

Two local realtors were also contacted for a market analysis of Heniger Park lots. Caldwell Banker Lakes Region Properties determined the leases for desirable lakefront lots would bring in $185,000 to $200,000 and the better ones up to $245,000. Back lots would be in the $30,000 to $40,000 range with the value being higher with lake views and access to sandy beaches.

Maine Real Estate Network estimated the lakefront lots at $180,000 and back lots with deeded access to two beaches at $60,000.

“It’s been a unique lease for all these years,” Ferguson wqie.

Despite the value of the town land, town attorney Geoff Houle told the board it would not be wise to pursue the sale of any of Heniger Park based on the wording of the Jacob Heniger will.

Once it decided the land would not be sold, the committee agreed in April to develop a new lease agreement for the 37 lots, including the one not leased and to include the use of two beaches on the applicable leases.

At its Oct. 9 meeting, the Heniger Park Committee voted unanimously that the front lots be charged a lease rate of two times the adjusted land value and back lots four times the adjusted land value. For example, the front lots would be charged a lease rate of approximately $4,000; the back lots approximately $1,300.

A second motion was made that the percentage of increases in lease fees be based upon the latest assessed value and tax rates.

The committee agreed to extend the leases for 50 years until 2040, to make it easier for people to get refinancing, Ferguson said.

Heniger Park property owner Brian Stone of Peabody, Mass., said he doesn’t disagree with the increases, but he hopes the final assessment will be fair.

Stone, who is selling a house on a piece of leased land in Heniger Park for $185,000 and owns a second house on a leased lot, said the deal has allowed he and his family to own a house on a beautiful Maine lake that is affordable.

“It needs to be equitable. It should be fair to the town but also fair to people down there,” Stone said.

Ferguson said selectmen believe the town should be involved in the process even through the will clearly stipulates that the Board of Selectmen has the right to determine what will happen to the property.

An article may be drawn up for annual town meeting action in June.

“We feel the townspeople need to decide. Not just selectmen,” he said.

ldixon@sunjournal.com