Shipyard prison redevelopment remains in limbo

When the U.S. Navy unveiled its “outleasing” program at Portsmouth Naval Shipyard in 1999, the most ambitious plan involved turning the former naval prison into the Seavey Island Technology Center, a first-class business park for technology firms.

But the death a year later of Joseph Sawtelle — the Seacoast developer who envisioned the project — has left his plans, and any similar proposals for the 19th century facility, in limbo.

Sawtelle’s death, followed by the Sept. 11 terrorist attacks and the economic downturn in the high-tech industry, essentially put an end to that proposal. No other developers have come forward with other proposals that complement the Navy’s goals and security needs.

“The Navy currently has no specific plans to outlease the former Portsmouth Naval Prison or any other Shipyard facility,” shipyard spokeswoman Danna Eddy told Foster’s Daily Democrat. “Outleasing initiatives have been slowed due to economic conditions as well as security considerations and their potential cost impact.”

The 10-year agreement between Sawtelle’s Seavey Island LLC was the first of its kind between the Navy and a private firm.

At the time, Sawtelle’s proposal was hailed by the Navy, the New Hampshire and Maine congressional delegations and the business community.

Capt. Kevin McCoy, commander of the shipyard, told Foster’s that he still believes a technology center would be a good option for the prison.

“It still makes good sense now,” said McCoy, who is being transferred to Washington and promoted to rear admiral.

But Mark Phillips, a commercial real estate developer in Newington, said he would be reluctant to work with the Navy again on any outleasing projects because he found the bureaucracy too frustrating. Phillips was formerly affiliated with Seavey Island LLC.

Phillips said that after Sawtelle died, other developers who wanted to continue the project were stymied when the Navy would not give them a 25-year lease. While Sawtelle believed he could see a return on his investment in 10 years or get a lease extension, Phillips said other developers wanted more time.

When Pease Air Force Base closed in 1991, the development authority that created the Pease International Tradeport that exists today gave private companies 25- to 50-year leases so they could recoup their investments, Phillips said.

“That is something they, the Navy brass, still do not understand,” Phillips said.