SOUTHWEST HARBOR — A developer proposing to build a 40-home subdivision on the waterfront along Main Street is already marketing the homes, though he has yet to get approval for all of them from the town’s planning board.

Developer Jeff Crafts announced last week his plans to develop The Village at Ocean’s End in three phases on a 35-acre parcel adjacent to Western Way Condominiums. The project includes an events center, swimming pool, walking trails and, on the harbor, a boat club with a deepwater dock and a golf cart tunnel under Main Street.

Mr. Crafts has permits to build three homes on the property. One, which will be a model home, is under construction.

Building a fourth home on the property would trigger subdivision review by the town’s planning board, according to Southwest Harbor code enforcement officer Don Lagrange. Maine law states “no person may sell, lease, develop, build upon or convey for consideration, or offer or agree to sell, lease, develop, build upon or convey for consideration any land or dwelling unit in a subdivision that has not been approved by the municipal reviewing authority” which, in Southwest Harbor, is the town’s planning board.

Mr. Crafts maintains that at this point he is only offering the three permitted homes for sale.

“We’re not offering anything for sale that’s not permitted,” he said.

Instead, he said he is offering potential buyers the “opportunity to purchase” homes in the subdivision through a “priority reservation program.” Through the program, a potential buyer puts down a deposit on a home with the understanding the offer is valid only if the project gets the necessary state and local permits. Mr. Crafts said he expects to apply for subdivision review this fall.

The deposit is completely refundable “for any reason” and on short notice. Mr. Crafts said he had a law firm draw up the contract and he is satisfied the arrangement does not violate state law.

Mr. Lagrange, however, would like to make sure the priority reservation program is legal. He said he intends to ask Mr. Crafts’ attorney to submit his opinion as to why the program is not in violation of state law. That opinion would form the basis for the town to develop its own legal opinion. As code enforcement officer, Mr. Lagrange cannot enforce the state statute.

“I don’t have the authority,” he said. “The selectmen have the authority.”

Mr. Lagrange said he expects to discuss the situation at the next selectmen’s meeting. “I think the town has good control of the situation,” he said.

Under the priority reservation agreement for The Village at Ocean’s End, a person who wants to purchase a home deposits $25,000 with the developer’s real estate broker, The Swan Agency Sotheby’s International Realty. The deposit is held in escrow, without interest, until permits are obtained. That gives the potential purchaser the “right of first offer” on the home.

“I’ll save it for you until the day it is permitted,” Mr. Crafts said.

The homebuyer then has five days to enter into a purchase contract with the developer. The price of a home, as stated in the purchase contract, may differ from any earlier construction cost estimate. If the homebuyer fails to sign the purchase contract within five days, the $25,000 deposit is refunded and the home can be offered to other potential buyers.

Mr. Crafts plans to build the project in three phases. In the first phase, 11 homes would be built, all with about 3,000 square feet of floor space. Prices are predicted to range between $750,000 and $885,000.

For the first phase, three different home designs are to be offered. A fourth home design will become an option in the later phases. The homes, designed by Mr. Crafts, who is a professional engineer, are in the shingle-style tradition and offer open interior spaces. Exterior walls will be stick-built offsite and assembled on the property.

The purchase price for 24 homes proposed for the second phase is expected to range from $775,000 to $935,000. The six homes in phase three are the closest to Main Street and no prices have yet been set, Mr. Crafts said.

Each home in all three phases is sited to take advantage of the view and will offer porches, second-floor balconies and extensive glass on the side facing the water. The property rises quickly from Main Street to about 150 feet above sea level, giving a homeowner views of Southwest Harbor and across Eastern Way to Bunker’s Ledge near Seal Harbor, Mr. Crafts said.

“What makes my design is everybody gets a view,” he said.

The homes are technically condominiums, with the purchaser owning the home and a 10-foot strip of land surrounding the structure.

Mr. Crafts is to offer a rental management service for homeowners who wish to rent their homes when they are not using them. The rental fee would be split 50/50 between the homeowner and management service, he said.

On the harbor side of Main Street, Mr. Crafts has plans to construct a building for a boat club, and erect a dock with a 60-foot fixed pier with ramp and two or three floats. Members of the boat club would have the use of boats owned by Mr. Crafts. He plans to have one boat for every 10 homes. The boats would range from small powerboats to larger sailing yachts, he said.

The boat club building will be about 800 square feet in size and would be for use by club members. There will be no restaurant or bar facilities, he said. The property, which is in the town’s harbor zone, is too small for home construction, according the Mr. Lagrange. Mr. Crafts said he plans to argue that the boat club building is a water-dependent use.

Another feature of the project is a tunnel planned to take pedestrians or golf cart-sized vehicles under Main Street to avoid traffic. Mr. Crafts is proposing an 8-foot-by-8-foot tunnel similar to one constructed at the Lucerne Golf Course to take golfers under Route 1A in Dedham.

Altogether, Mr. Crafts said he owns close to 50 contiguous acres that will be associated with the development. The properties include a home on Main Street, which increases the road frontage for the project to more than 200 feet, and almost 12 acres behind the development. He said he plans to build walking trails through this acreage for use by homeowners. The parcel, which he bought for $25 in the early 1960s using proceeds from his newspaper delivery route, abuts Acadia National Park. He said he has no plans to build homes on this property.

Most of the property has been in Mr. Crafts’ family for more than 200 years, with the exception of about 10 years. The 35 acres the homes are being built on was mortgaged by Mr. Crafts to Emil Dopyera and D. Susan Rock Dopyera in 1992. The Dopyeras foreclosed on the property in 1997 and it was purchased by Morrision Newell of Chicago at an auction in 1998.

In March, Mr. Newell sold the property in three parcels to Crafts Family Reserve, LLC and Village at Ocean’s End, LLC. Mr. Crafts said he and his son, Jonathan Crafts, own Village at Ocean’s End and his wife owns Crafts Family Reserve.

According to Maine Revenue Service real estate transaction documents, the Crafts paid $146,500 for the three lots, which includes about 235 feet of shorefront. For property tax purposes, the town appraises the three properties at $621,900.

A number of local, state and federal permits must be obtained before the project can be completed as proposed.

First the Maine Department of Transportation (MDOT) must grant an entrance permit for the road leading into the development from Main Street. Tom Johnston, transportation operational manager for the MDOT, said he inspected the site on July 31.

“I don’t see any problems with it,” he said.

Mr. Crafts is planning to apply for the entrance permit, Mr. Johnston said. An additional lane would be added to Main Street at the entrance to allow traffic to make a right turn into the development without impeding the progress of other vehicles traveling in the same direction.

The tunnel would also require review from the MDOT and the state Department of Environmental Protection, Mr. Johnston said.

“It’s no piece of cake,” Mr. Johnston said. The matter is complicated by the fact that the town owns the sidewalk the tunnel would pass under, he added.

Construction of the pier would require permits from the DEP and the Army Corps of Engineers, said John Cullen of the DEP. Mr. Crafts had obtained a permit by rule for the pier about three years ago but that permit has expired and any new permit would require a full review by the DEP, Mr. Cullen said. During the review, the DEP consults with the Department of Marine Resources and other agencies to determine what impact the pier would have on the area in which it is built. The town’s harbormaster would also be consulted to see if boat traffic from the pier would have a negative impact on harbor operations.

Other permits must be obtained from the DEP regarding stormwater management, and the project would have to get subdivison approval from the town’s planning board.

Mr. Crafts said he is confident the project will get all the necessary permits.

“I’m going to be doing everything according to the letter of the law,” he said.

He said he plans to have all the necessary state permits before approaching the planning board.

A sales center for The Village at Oceans End opened at 474 Main Street on July 31. John Bennett, a broker from The Swan Agency, said a number of people have already expressed an interest in the project.