By Kelley Bouchard | Portland Press-Herald | August 12, 2005

Portland's plan to sell the Miss Portland Diner to a controversial restaurateur is dead, trumped by competing efforts to redevelop the Bayside neighborhood and extend passenger rail service north to Brunswick.

City officials decided Wednesday night to abandon their pending deal with Michel "Sal" Salvaggio, a former restaurant owner from Falmouth. They plan to seek new proposals after they complete a land swap with the Maine Department of Transportation, which could involve a city-owned lot on Marginal Way that was earmarked for the diner.

"We don't really know what land is available for the diner," said City Councilor James Cloutier, head of the community development committee. "Once we know more, we'll invite everyone who's interested to bid again if they want to. But at this point, it's just gone on too long, so we had to cut it loose."

The committee's decision came nearly five months after the City Council split 4-4 on Salvaggio's offer to move and expand the 56-year-old diner at the site of an unused bus passenger shelter. It has been a year and a half since the diner's former owner, Randall Chasse, gave the Miss Portland to the city after failing several times to sell it.

Salvaggio's proposal ran aground in March, when city officials and others started questioning his business history.

The deal was further delayed when officials learned that the state might want some city-owned land along Interstate 295, where Theodore West plans to build an office building, a parking garage and college-student housing at Marginal Way and Preble Street Extension.

State transportation officials want land along the highway to create a rail corridor for Amtrak's Downeaster. If the state gets the parcel it wants, West will need land near the bus shelter that was intended for the diner, Cloutier said.

Salvaggio, who owned Michel's restaurants in Portland, Westbrook and elsewhere, declined to comment Thursday on the committee's decision.

Salvaggio stepped forward after no one responded to the city's advertised request for proposals to buy the diner and move it from its present location on Marginal Way near Hanover Street. He agreed to pay $25,000 for the diner and $50,000 for the 6,000-square-foot bus shelter lot across from The Whole Grocer.

Salvaggio also planned to spend $400,000 on an addition that would make the diner a feature of the Bayside neighborhood. He wanted to lease another 18,000 square feet of city land for parking, which would have cost him $1 annually for 20 years.

Some city officials questioned whether Salvaggio was right for the deal, especially since a city investigation turned up at least one failed restaurant and several outstanding business liens. Others questioned whether $50,000 was enough for what some say is prime real estate.

Cloutier said it could be weeks or months before the city knows whether there's enough land left near the bus shelter to accommodate the diner. At that time, his committee may issue a new and much more detailed request for proposals. He said Salvaggio would be welcome to submit a new proposal, as would others who have expressed interest in buying the diner.

If none of the proposals satisfies city officials, they may put the Miss Portland in storage until a better offer comes along.

"We may shrink-wrap it and put it someplace," Cloutier said.

Originally published online here: http://pressherald.mainetoday.com/news/local/050812diner.shtml