A member of Ellsworth’s city council has been told that a banner he erected criticizing the city violates the city’s sign rules.
Councilor Steve O’Halloran did not seek or get permission from the city to erect a large banner at the intersection of Main and Oak streets that says “SHAME ON ELLSWORTH!! RETURN THE KARST FAMILY EQUITY!! $117,907.99,” according to Code Enforcement Officer Robert Grant. The city’s sign ordinance requires property owners to get permits from the city for non-campaign signs that are displayed outdoors.
The banner refers to a decision by the city in 2023 to sell a property it foreclosed on nearly five years ago for unpaid property taxes. O’Halloran and his supporters say the city should give the income it made from selling the house at auction back to the previous owners. Other councilors and top city officials have countered that doing so could open a legal can of worms and subject the city to lawsuits from others who lost properties to the city for unpaid taxes.
Grant said that O’Halloran leases the property where the banner is erected and has erected other banners there in the past. Technically, the violation has been issued to the property owner, and the property owner told city officials he would ask O’Halloran to remove the banner, Grant said.
Last fall, O’Halloran displayed large campaign signs for several local City Council candidates on shipping containers facing the busy intersection. The city did not contact O’Halloran about those signs because election campaign signs are regulated by state law and the signs were not up for long, Grant said.
Grant said his office did contact O’Halloran this spring when the councilor put up a sign promoting his business, P.E. O’Halloran Inc. Off-site business signs are not permitted under the city’s sign regulations, he said.
O’Halloran did not respond Wednesday to a message seeking comment about the alleged sign violation.
The issue over the unpaid taxes on the Karst property dates back nearly five years, when the city took possession of the 5th Street home in December 2020. Kerry Karst, who lives in Brewer, inherited the two-bedroom house from his father in 2014 but did not pay more than two years’ worth of tax bills on it, racking up a $7,000 debt to the city.
After taking possession of the house, which now has an assessed value of $117,000, the city took bids from potential buyers, as is required by the city’s regulations for tax foreclosures.
The city received several bids but the council rejected them all in January 2023, however, after O’Halloran and some other councilors — some of whom are no longer on the council — said they wanted the home returned to the Karst family. They noted the COVID pandemic had disrupted much of society at the time, and notices the city had tried to mail to Karst were returned to the city undelivered.
The following month, in February 2023, the council voted 6-1, with O’Halloran opposed, to auction off the property instead, which Karst told councilors was okay with him. All he wanted to do, he said at the time, was retrieve his parents’ belongings from the home.
“This whole thing is due to me. I’m the one that did not pay the taxes,” Karst told the councilors, including O’Halloran, in February 2023. “I appreciate it, Steve, what you’re doing. I just want to get my stuff and let the house go.”
The following month, the city sold the property at auction for $148,500 to a Bar Harbor-based entity called 617 Bayside LLC, according to the city’s assessing records. That entity still owns the property.
But the debate over the city’s actions was revived again two months ago, when O’Halloran placed it on the agenda for the council’s August meeting for discussion.
O’Halloran again argued that the leftover money from the sale, after the city had recouped its expenses, should be given back to Karst. Other members of the council did not support his proposal, saying that the city’s attorney has advised the council to abide by laws that were in effect at the time, which did not allow the city to donate public funds generated by the sale of the house back to the Karsts.
O’Halloran erected the banner criticizing the city in September.
City officials said Wednesday that they expect the proceeds from the sale of the former Karst property to be discussed again by the council when it meets on Monday, Oct. 20.
It was unclear Wednesday what the potential penalty might be if the banner is not removed. The city did not respond to a request for a copy of the notice of violation.