United States Post Office in Hampden, Maine. Hampden is raising the rent charged to the U.S. Postal Service to lease a town-owned building on Western Avenue. Credit: Linda Coan O'Kresik / BDN

Hampden is raising the rent charged to the U.S. Postal Service to lease a town-owned building on Western Avenue by $10,000 a year to make up for lost tax revenue.

Under a new, five-year lease, the postal service will pay the town $60,000 a year. The postal service has paid rent for the past four decades to Lewiston businessman Paul Lessard and, in the years since his death, to his estate.

The town first leased the land where the post office is located to Lessard 40 years ago. He in turn rented the building to the postal service for $50,000 a year most recently.

The most recent lease for the 3,700-square-foot building expired on Feb. 1.

The rent hike and renegotiation followed a process that dates back to the fall of 2019, when the town ended its lease agreement with Lessard’s estate because it wanted to use the building for municipal purposes, Town Manager Paula Scott said.

The town negotiated directly with the postal service for a rent $10,000 higher than what the postal service had paid Lessard’s estate to make up for the $8,200 the estate paid the town in taxes, Scott said.

The rent money will go into the municipal building reserve account rather than the general fund, according to a memo from Scott to the Hampden Town Council, which was to take up the new lease Monday.

The Hampden post office is one of about 400 buildings in Maine that the postal service rents.

The Bangor post office is located on Hammond Street in a building owned by Penobscot County. Rent is $85,590.00 per year for 5,700 square feet, according to County Administrator Erika Honey.

When Hampden sought to end its rental agreement with the post office, a U.S. Postal Service representative told the town there was a moratorium on new construction.

Legally, the postal service could have attempted to take the building by eminent domain, but the Town Council decided to extend the lease as it considers future needs for additional space.

The council chose to negotiate a five-year lease rather than the 10-year lease the postal service requested. Negotiations were stalled for a time, in part, because the postal employee in the real estate division the town had been dealing with retired, leaving Hampden’s case in limbo.

Sen. Susan Collins’ office intervened to connect town officials with the correct person, according to Scott.

Correction: An earlier version of this story misstated the size of the postal service’s rent increase as well as the amount of rent it previously paid and to whom. The story also misstated how Hampden sought to use the current post office space.