John Karnes agreed nearly a year ago to sell his Bangor inn to Penquis CAP for it to develop housing, but with only a few days left before that deal expires and no sign of a sale in sight, he needs the city’s help.
Karnes isn’t asking for money to revitalize his business. He needs the city to remove or relocate the large encampment of people experiencing homelessness referred to as “Tent City,” which formed across the street from the inn and has driven away Karnes’ guests and employees.
Karnes believed Tent City would mostly, if not entirely, dissolve when Penquis agreed to buy his inn to develop 18 efficiency units and 18 one-bedroom apartments, and allow vouchers to cover the majority of the monthly rent.
The financial loss Karnes has shouldered is one of many unintended consequences of Bangor’s burgeoning homeless population coupled with a shortage of housing for people of all income levels that mirrors many other metropolitan areas across the country.
“Penquis has a lot of good services in place to help people transition into housing, so I thought this was a win-win,” Karnes said. “Now, I’m not so sure and I don’t know what the hold-up is.”
Penquis also planned to partner with another organization to offer addiction recovery and other services for people living there, Jason Bird, the agency’s housing development director told the Bangor Daily News last year.
MaineHousing granted Penquis $4.25 million in federal pandemic relief funding to support the project. MaineHousing has not withdrawn any funding or support for Penquis’ project, according to the organization’s communications director, Scott Thistle.
Karnes bought the Pine Tree Inn at 22 Cleveland St. from the city in April 2016 for $10,000. He spent the next year and more than $2 million renovating the building and opened his business in 2018. The inn has 42 rooms, all of which have kitchenettes, and 14 suites that have separate living and bedrooms.
Karnes saw plenty of traffic in 2018 and 2019, but the COVID-19 pandemic brought business to a grinding halt in 2020. The inn stayed afloat by hosting travel nurses who came to assist the area’s health care agencies, Karnes said.
While the inn worked to tread water amid the uncertainty of the pandemic, Karnes noticed a tent across the street in a wooded area in 2021. Then, a second tent arrived.
These first few encampments sparked curiosity from employees and guests, but no issues arose. But when the city shut down an encampment under the Interstate 395 bridge in 2021, many of the people experiencing homelessness were pushed into what is now Tent City — a sprawling encampment behind the Hope House shelter.
As the encampment ballooned in summer 2021, incidents between guests, employees and people experiencing homelessness became more common, Karnes said. This brought negative reviews that tarnished the inn’s reputation and slowed business.
“It wasn’t until we started to have several tents and people wandering into the lobby and trying to sleep in the hallways that things started to get alarming,” he said. “We have trash blowing into our yard, used needles, someone set up a tent in our parking lot. We found someone sleeping in our lobby restroom, and we had to start locking it.”
The inn has called the Bangor police at least 20 times in recent years because of incidents involving Tent City residents, Karnes said. These calls sometimes led to officers issuing no-trespass orders, he said.
Karnes said some guests arrive at the inn, check in, then leave before they ever reach their rooms because they’re unnerved, afraid and intimidated by the nearby encampment.
“In the hospitality business, first impressions are everything,” he said. “I’ve had people fly into Bangor, get in an Uber, come to the Pine Tree Inn and that’s their first impression of Bangor, Maine.”
In recent weeks, the inn has hosted about 14 guests at a time, compared with roughly 35 during the pandemic, Karnes said. Before the pandemic, the inn was typically full in March.
Penquis approached Karnes with an offer to purchase the inn and turn it into housing for those experiencing homelessness in 2021. The parties began negotiations in May 2021 and signed a one-year purchase-and-sale agreement on March 25, 2022.
That agreement expires at the end of the week and Penquis had not finalized the sale as of Friday.
More than half of the inn’s 14 employees quit when it was first announced last spring that Karnes would sell the inn to Penquis. Its remaining nine employees have been left in limbo waiting to see what will happen following a deal that’s looking less likely to happen by the day.
When Karnes made the agreement with Penquis, he said only from 30 to 40 people were living in Tent City at the time. But as the year continued without a final sale, the encampment grew.
Bird said Penquis is “actively working toward a closing and expects to do so.”
While Bird didn’t name an expected closing date, he credited the lengthy closing process to the extensive “behind the scenes” work that must be completed when using federal funding, such as an environmental review.
If Penquis doesn’t finalize the sale in the coming days, Karnes said he’s preparing to maintain ownership of and revitalize the inn to “turn this ship around.” But he said he needs Bangor to address Tent City to make that endeavor successful.
This assistance could mean anything from using the more than $20 million in federal pandemic relief funding Bangor received through the American Rescue Plan Act to house people or moving the encampment where it won’t negatively affect nearby businesses.
“The city needs to think about what they’re facilitating,” he said. “They have relief funds from the pandemic, and they need to figure out how to use them to help these people. The people out there are not living, they’re surviving.”
Time is ticking, Karnes said, because he expects Tent City will only grow as the weather warms and people who spent the winter in shelters and warming centers return to encampments.
“The city is in a tough spot, but they need to stop talking about it and start doing something. Even if you do something wrong, at least you’re trying and you learn from your mistakes and keep going.”