Hannah Dow straightens a cot inside the Portland Expo on April 7, three days before about 300 asylum seekers were to move into the temporary shelter. The city’s decision to convert the arena into a shelter meant canceling an agreement with Promerica Health, which had leased the space for a health convention set for early May. The company is now suing the city for damages. Brianna Soukup/Staff Photographer
The City of Portland is being sued for terminating a contract with a Falmouth health care company to lease the Portland Expo for a convention so that the city could instead shelter asylum seekers in April.
Promerica Health filed a civil lawsuit at the end of August alleging that the city unjustly terminated a contract to rent the Portland Expo building without offering financial compensation or reimbursement.
At the heart of the case is the reason the city asserted when it terminated that lease. The city says it acted lawfully because of a clause in the contract with Promerica that grants the city the right to terminate the lease if there were “unforseen circumstances” like “Acts of God,” and that offering temporary housing to asylum seekers fits that criteria.
“The language in our agreement specifically allowed us to terminate our agreements with renters in order to use the Expo as a shelter in the face of the sudden homelessness emergency that was beyond our control,” Portland city spokesperson Jessica Grondin said in a written statement. “It is unfortunate that the emergency situation the city was faced with has resulted in litigation.”
But Promerica Health CEO Stephen Woods doesn’t agree. Rather, Woods finds the method, timing, circumstances and reasoning dubious, at best.
“They made a decision based on lots of criteria, but none of that criteria had to do with God. It had to do with, ‘well we don’t want to use the school, we don’t want to move asylum seekers down to the Old Port to the (Ocean) Gateway, let’s utilize the Expo,’ ” Woods said. “They should have clearly stated, ‘we need to cancel your event because the city feels as though we have a moral obligation to house asylum seekers. But we want to work with you to remedy the cost it’s going to cost in how we go forward.’ They didn’t do that.”
The concerns in the suit began on March 24, when Woods learned in a Portland Press Herald article that the city was planning to offer temporary emergency shelter space in the Expo. Woods had been planning Promerica’s HealthyMaine Expo, the company’s first health and wellness conference, that was supposed to run at the Portland Expo from May 5-7.
The filing alleges that Woods repeatedly emailed city officials, including interim City Manager Danielle West and Mayor Kate Snyder, but he didn’t hear back until March 28 when a city attorney informed him the lease would be broken. By then, more than 1,000 people seeking asylum had moved to Portland since the first of the year and the city opened the Expo on April 10 to provide shelter for about 300.
As a result, Promerica Health ended up postponing its conference and moving it to the Cross Insurance Arena, where it will run this Saturday and Sunday.
The city, for its part, said it returned Promerica Health’s deposit and offered alternative dates for the conference.
“They then decided to move their event to the Cross Insurance Arena on Sept. 16-17, which were actually the same dates that we offered them for use of the Expo,” Grondin said.
Promerica Health’s attorney, Erik Peters with Verrill Law, said that the company was concerned about being burned again if it rebooked at the Expo.
“They did this once, what’s to stop them from doing it again?” he said.
The filing claims that Promerica Health has faced damages because of the switch – “increased rents and expenses and loss of sponsorships and revenue.” It said it had more than 60 sponsors lined up for the May event, and had sold thousands of tickets when it learned of the city’s plans.
The filing states that Woods and Promerica Health have been asking the city since April for $250,000 as compensation for those damages, but the city has allegedly refused. Grondin did not answer specific questions about any plans for Portland to reimburse Promerica Health.
The suit also alleges that the city was willing to accommodate the Maine Celtics schedule, but not honor the contract with Promerica Health. On Aug. 15, the city announced it was closing the shelter and moving the remaining families to hotels in Lewiston and Freeport. The Press Herald previously reported that the city set the date for the closure weeks prior because the sports arena would need to be available for scheduled events this fall.
The filing asserts that the city based the opening and closing of the temporary shelter on the Maine Celtics’ schedule, an NBA-affiliate basketball team that plays their home games at the Expo.
“Once the Celtics were eliminated from the G League playoffs, and the city’s primary tenant no longer needed the building, then it became available and this ‘Act of God’ occurred,” Promerica’s attorney, Peters, said. “It seems like they favored one party over another, which I suppose is their right as business people, but when you breach a contract, you’re liable for damages. And that’s why we had to file suit.”
Promerica Health filed its civil lawsuit on Aug. 30.
Woods believes it is necessary for the city to address the growing housing crisis, but he wonders why the shelter hadn’t opened months earlier when the number of asylum seekers moving to Portland had already started growing. Housing was already a concern well before late March, he said.
“There were asylum seekers here for months during the Celtics season, in February and January … And there are still asylum seekers here, this month and next month,” Woods said.
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