$12 million Portland housing proposal up for city approval

October 7, 2013 in Articles

Author: Randy Billings
Publication: Portland Press Herald

PORTLAND – Another 39 units of market-rate housing could soon be in store for the city's India Street neighborhood, a former industrial area nestled between the Old Port and Munjoy Hill.

Work continues on the Bay House development in Portland on Monday, Sept. 23, 2013.

Shawn Patrick Ouellette / Staff Photographer

 

The Planning Board on Tuesday will hold a public hearing and vote on the Seaport Lofts, which would bring seven townhouses and 32 single-story units at Hancock and Newbury streets.

The estimated $12 million project is the second phase of the 86-unit Bay House development, which has been under construction over the last year.

Seaport Lofts would be built on what is now a parking lot at 133 Newbury St. The four-story building would consist of brick on the bottom half and metal siding on the top. Forty-three parking spaces would be included on site.

William Conway of Sebago Technics, a consulting firm representing the developer, said the plan being presented Tuesday is the project's fourth iteration. The changes have consisted of tweaks to the overall design, landscaping and stormwater systems, he said.

"In my view, any of the remaining issues are relatively minor in nature," Conway said.

The new units will further bolster the supply of market-rate housing on the east side of the city.

The Bay House development, consisting of 86 condominiums in two buildings at the site of the former Village Cafe is still months away from being finished, but 60 percent of the units are under contract.

Most of the tenants are baby boomers said Sandra Johnson, a broker at Town & Shore Associates, which is marketing the condos.

Half of the tenants are from Maine, she said.

"They're moving out of their suburban homes," Johnson said of the tenants. "They want to live within walking distance of the city's amenities."

Johnson said the most expensive unit at Bay House – a top-floor, three bedroom condo with a water view – has already been sold for $825,000.

One-bedroom condos are being marketed online starting at $295,000. Two bedrooms start at $380,000 and three bedrooms start at $585,000.

Johnson said the southernmost building, consisting of 42 units, should be finished by the end of the year, and the north building, consisting of 44 units, should be finished in January.

Up to six ground-floor retail units are being marketed along Middle Street. Prospective tenants, including a fitness center, are showing interest, but no leases have been signed, said Jennifer Small, an associate broker at Malone Commercial Brokers.

Bay House is 65 feet tall and has elevators and an underground parking garage for 80 vehicles. Parking lifts allowing one vehicle to park above the other are also available to tenants for an additional charge, Johnson said.

Building heights have been a source of concern for India Street residents.

Seaport Lofts will be 50 feet tall, the maximum allowed by zoning. It was originally part of a contract zone that would have allowed an additional 65-foot-tall building. However, that zone was amended last year by the City Council to remove the Seaport parcel.

The Bay House project was originally slated to get underway in 2008, but was delayed when the economic downturn and banking collapse made it impossible for the project to get financing.

The project was restarted last year, after the City Council granted developers an estimated tax break of $2.05 million over the next 20 years.

To receive financing, developers also agreed to turn one of the Bay House buildings into apartments if condo sales fell flat.

That, however, has not been a problem.

"It's been a pleasant surprise how well the units have been received," said Gordon Reger, the chairman and chief executive officer of Reger Holdings LLC, the New York investment firm spearheading the projects.


Maine home sales up 20% in August

September 23, 2013 in Articles

Publication: MaineBiz

The sales volume for single-family homes jumped 20% in August compared with the same period one year ago.

The latest figures from the Maine Real Estate Information System show real estate agents in the state sold 1,506 homes this year, compared with 1,255 in August 2012. The median price on those homes also rose compared with last year from $170,000 to $182,000.

The increases in home sales volume and median price in Maine outpaced regional and national trends for single-family homes. In New England, sales volume rose 12.7% and the median sales price rose 7.6% to $268,000.

Nationally, sales volume rose 12.8% in August and the median sales price rose to $212,200, a 14.4% increase, according to the National Association of Realtors.


Group of Old Port properties going on online auction block

September 23, 2013 in Articles

Author: J. Craig Anderson
Publication: Portland Press Herald
The commercial buildings at the corner of Fore and Wharf streets were foreclosed on in 2011.

A group of commercial properties on Fore and Wharf streets will hit the virtual auction block Monday, when the previously foreclosed-on buildings' loan servicer will attempt to sell them online.

Image provided by Cardente Real Estate shows the Old Port properties that will be auctioned online.

The block of properties in the Old Port, comprising 432, 434, 436 and 446 Fore St. and 42 and 50 Wharf St. totals just under 50,000 square feet of restaurant/bar, residential and retail space. Commercial tenants include Buck's Naked BBQ, Oasis, Fore Play, Gorgeous Gelato, Pearl Lounge, Merry Table, Ollo Salon, Blazin Ace, 51 Wharf Street Restaurant and Shine Salon.

Participation in the 48-hour auction, which begins Monday at noon on auction.com, requires a deposit of $25,000 and a minimum bid of $2 million. One of the properties' brokers, Michael Cardente of Portland-based Cardente Real Estate, said he did not know whether the seller has set a reserve price for the auction. A reserve price is the price below which the seller will decline to sell. It is higher than the minimum bid and rarely disclosed.

Cardente said the seller, a limited-liability company called BACM 2007-3 Wharf Street LLC, had not previously listed the properties for sale.

BACM's parent company, Florida-based LNR Property LLC, prefers to sell properties via auction, he said. "We were hired specifically to market these properties for auction," Cardente said.

LNR is what's known as a "special servicer," a company that facilitates the repayment of delinquent commercial real estate loans that have been divided into tranches and sold off to investors as commercial mortgage-backed securities. It has a sister company, LNR Partners, that is responsible for selling properties that have been foreclosed on.

The properties in the Old Port were foreclosed on by LNR and put up for auction in 2011, but no third-party buyer was willing to beat the special servicer's bid of $5.9 million. The previous owner had purchased the block of properties in 2007 for $8.3 million but later defaulted on the loan.


Portland plaza turns into flash point

September 17, 2013 in Articles

Author: Randy Billings
Publication: Portland Press Herald

The debate over Congress Square's underused park seems to go beyond the fight on open space to issues of rich vs. poor and corporate intrusion.

PORTLAND - When the City Council meets Monday to decide whether to sell a section of Congress Square Plaza to an out-of-state developer, many observers will see more at stake than the plaza's fate.

The space at Congress and High streets, which started out holding a wooden row house, has undergone many changes over the years. Walgreen’s replaced the row house, and Dunkin’ Donuts moved in later. In the 1980s, the space was converted into a plaza.

Evening Express and Press Herald file photos

1920

Those with opposing views see the deal for the nearly half-acre concrete plaza at Congress and High streets as either a symbol of all that's wrong in the world or an opportunity to bolster Portland's economy.

The debate is about gentrification -- sweeping homeless people (or people who appear homeless) out of view to make way for a shiny building and affluent people.

It's about preserving a public space for civic discourse and maintaining Portland's history of creating and valuing open spaces.

It's about economic development, turning a liability into a tax-producing asset that provides jobs.

For the more radical factions, like the handful of remaining Occupy Maine members, it's about corporate welfare and corporate domination of working men and women. It's about backroom deals, perceived corrupt politicians and even the subversion of democracy.

All of that has led to shouting matches, public demonstrations and an attempt to start a petition drive.

But it all begs the question: What is really going on?

"I just can't seem to get my arms around it," said Cheryl Leeman, one of two city councilors who say they are undecided on the deal. "Something has gone amok."

The other undecided councilor, Jill Duson, who is up for re-election in November, did not return a call for comment.

COMPLAINTS OF FAULTY PROCESS

The council is expected to vote Monday on whether to sell two-thirds of Congress Square Plaza to Ohio-based Rockbridge Capital. The developer wants to build a single-story event center there as an addition to the former Eastland Park Hotel, which it is renovating. The deal would leave 4,800 square feet for a new public plaza.

The dispute appears to be centered on process -- too much process for supporters of the sale, not enough for opponents, and not the right kind of process for independent observers.

For years, the city has been studying ways to fix what most agree is a failed, underused public space.

Rockbridge Capital ran into opposition last year when it presented a plan to develop the entire plaza. It returned this spring with a scaled-down proposal.

Bruce Wennerstrom, who has been representing the developer in its negotiations with the city, says he has held meetings with about 30 residents, neighborhood groups and professional associations.

"In my opinion, it has been a very thorough and complete process, giving everyone a chance to weigh in," said Wennerstrom, who will manage the renovated hotel when it reopens in December as the Westin Portland Harborview Hotel. "Now it's time to vote and move on."

Opponents, however, criticize a series of closed-door meetings between the developer and the council's Housing and Community Development Committee to negotiate the sale. When an agreement was reached, the committee quickly recommended passage to the council. The agreement sets an aggressive timeline for the project to move forward.

Frank Turek, president of the Friends of Congress Square Park, a nonprofit group that opposes the sale, says a community-led process that concluded the downtown space should be redesigned entirely was usurped.

The city was prepared to spend $50,000 to redesign the plaza, but withheld the call for proposals when Rockbridge Capital bought the adjacent hotel. City officials have acknowledged that they approached the company to ask whether it was interested in developing the space.

"With Congress Square Park, there has never been any indication that the city had a desire to be rid of the property," Turek said. "It was never anyone's intention to sell the park until Rockbridge came on the scene."

Turek says the sale will set a precedent for selling other public spaces in favor of development.

ROOT CAUSES OF OPPOSITION

Jack Kartez, a professor of community planning and development at the University of Southern Maine's Muskie School of Public Service, said it's important to have the right type of process -- one that genuinely engages all stakeholders, whether they're developers, residents or business owners.

"There's a very complex constituency downtown," Kartez said.

In addition to merchants and students downtown, there are many people who rely on public assistance and spend their time on the street.

Many elderly and disabled people who live in the Congress Square Plaza apartment complex have testified that the plaza is one of the few places they can congregate.

According to the 2010 census and the 2011 American Communities Survey, nearly 8,400 residents live in neighborhoods -- Parkside, West Bayside, the downtown and the West End -- around Congress Square.

An average of about 4,000 vehicles a day passed through the intersection of Congress and High streets in 2010, according to data from the Maine Department of Transportation.

Mayor Michael Brennan has said the intersection is a gateway to the city that can shape people's opinions of Portland as a whole.

Ethan Kent, a representative with the national Project for Public Spaces, a New York-based nonprofit that helps communities create dynamic public spaces, visited Portland in June at the request of the Friends of Congress Square Park.

Kent, a graduate of Bowdoin College in Brunswick, said in an interview that the proposal to sell and develop the plaza has become a flash point because the process began with a specific development proposal, rather than a broad community vision for that corner.

"The current discussion is unfortunately rather divisive -- you're either for it or against it. You can only react to it," Kent said in June.

Charles Colgan, chairman of the Community Planning and Development Department at the Muskie School of Public Service, said open space takes on a greater significance on Portland's peninsula, which is heavily developed.

Also, many Mainers have a "longstanding suspicion" of out-of-state companies -- let alone a multinational corporation like Rockbridge Capital -- coming in and proposing major changes, Colgan said.

"When you combine the normal issues of contested public space with suspicions of out-of-state developers, you get a pretty volatile mixture," he said.

SITE NOT PUBLIC SPACE UNTIL 1980s

The first building to occupy what is now the plaza was a wooden row house constructed in the mid-19th century, said State Historian Earl Shettleworth. In the 1940s, the wooden row houses were torn down and a Walgreen's was built. In 1971, Dunkin' Donuts took over a portion of the space. It quickly became popular with prostitutes and vagrants.

Several years later, the City Council expressed a desire to clean up the area. The council eventually seized the former Dunkin' Donuts building through eminent domain and razed it. In the early 1980s, the city secured a $7.3 million federal grant to convert the former building site into a plaza.

The city worked with community partners to hold events in the park and provided annual funding, but the events never became self-funding, and by 2002 no funds were allocated to a group that coordinated the events.

In 2008, the Congress Square Redesign Study Group was created. It recommended redesigning the park and keeping it as an open space, before the Rockbridge proposal surfaced.

CORPORATION VS. POOR 'FRENZY'

Portland, which has a strong Buy Local program, has a penchant for shunning corporations downtown.

When a Hooters restaurant and bar was proposed on Congress Street in 2008, the city nearly passed a hotly debated ordinance that would have banned chain businesses from the downtown.

"You've got some people who just want to stick it to 'the man,'" said Chris O'Neil, who represents the Portland Community Chamber, which supports the sale and redevelopment of Congress Square Plaza. "It's taken on the trappings of a panic, a mob or a frenzy."

David Wagner, a professor of social work at USM who opposes the sale, said the issue has become a battle between rich and poor members of society.

He said Congress Square is symbolic of what he sees as the city's effort to sweep people "who are not aesthetically pleasing" out of the commercial center.

Then there is the "ludicrousness" of the proposed sale price -- nearly $524,000 -- to a corporation that can afford to pay much more, he said.

"For a number of groups, it has hit a nerve," said Wagner.

If the council agrees to the sale, the debate is expected to rage on.

The Friends of Congress Square Park hoped to collect signatures for a referendum that would ask voters to make it harder to sell and develop 35 public open spaces, including Congress Square.

On Friday, the city attorney rejected that effort, saying citizens cannot initiate a referendum over fiscal matters, including the sale of real estate.

The Friends of Congress Square Park are considering challenging that decision in court.

To view additional media materials via original article: http://www.pressherald.com/news/plaza-turns-into-flash-point_2013-09-16.html?pagenum=3


Disputed Portland plaza sale approved by council

September 17, 2013 in Articles

Author: Randy Billings
Publication: Portland Press Herald

Foes threaten to sue after the 6-3 vote to allow an event center and a smaller public space on the downtown site.

PORTLAND – Despite loud protests and an arrest, the City Council voted 6-3 on Monday night to sell Congress Square Plaza to Rockbridge Capital, the Ohio-based investment firm that hopes to build a single-story event center on the site at an estimated cost of $3.5 million.

Portland City Councilor John Anton raises his hands in exasperation while discussing the proposed sale of Congress Square Plaza to an Ohio investment firm during the city council meeting Monday, Sept. 16, 2013.

Gabe Souza / Staff Photographer

Silent protestors kneel in front of the Portland City Council as they vote to approve the sale of Congress Square Plaza to an Ohio investment firm on Monday, September 16, 2013.

Gabe Souza / Staff Photographer

However, the nonprofit Friends of Congress Square Park said after the meeting that it will take the city to court in an effort to save the half-acre concrete plaza at High and Congress streets.

Councilor Jill Duson, who was one of two undecided councilors going into the meeting, said she supported the sale because it is a unique situation that would benefit businesses in the area.

Under the purchase-and-sale agreement approved by the council, Rockbridge Capital will pay $524,000 for two-thirds of the plaza, leaving 4,800 square feet for a new, smaller public space.

The 5,000-square-foot event center, expected to draw 300 to 500 people per event, will be built in a 9,500-square-foot addition to the former Eastland Park Hotel. Rockbridge Capital is expected to reopen the hotel in December, after a nearly $50 million renovation, as the Westin Portland Harborview Hotel.

According to a memo to the council, the event center is projected to generate $67,950 a year in additional property taxes and create 25 new jobs -- banquet staff, valets, front desk staff, bell staff and engineers.

"I am a 'yes' on this item. I think it will result in a usable and inviting space for the people who live in the neighborhood," said Duson, who acknowledged faults in the sale terms. "I think it's a little stingy. ... I wish it was more money."

Councilors John Anton, Kevin Donoghue and David Marshall voted against the sale.

Anton and Donoghue argued that the city should demand a better development proposal for one of Portland's most prominent intersections.

"I wish we'd aim higher," Anton said.

The vote followed an impassioned debate that divided the community and played out last week as councilors heard more than three hours of testimony, mostly opposing the sale.

No public comment was taken Monday night, but both sides showed up in numbers.

More than a dozen protesters, carrying signs and banners and beating drums, rallied in Congress Square Plaza and then marched down Congress Street to City Hall, blocking one lane of traffic.

Supporters of the sale, wearing "Yes on Congress Square" stickers, arrived at City Hall early to get their seats and sat quietly as the noisy protest continued on the steps of the building.

Once the meeting got under way, Erika Elkins, 63, began shouting from the crowd and did not heed Mayor Michael Brennan's request to be seated and quiet. After about 10 minutes, she was arrested by two plainclothes officers on a charge of criminal trespass, said Police Chief Michael Sauschuck.

Other protesters were quiet but made their presence known. Two put tape over their mouths during deliberations, then turned their backs to the council and kneeled on the floor. They were joined by someone dressed like a ninja, wearing a dark mask, sunglasses and gloves.

Councilor Cheryl Leeman, who went into the meeting undecided, was moved to support the sale after several changes were made to the agreement, including making Rockbridge Capital pay for the relocation of the Union Station Clock from the plaza.

Councilor Nicholas Mavodones, who chairs the council's Housing and Community Development Committee, which negotiated the agreement, argued against the amendment because there was no cost estimate or plan to relocate the clock.

"Yet you agreed to have the city pay those costs and approved it in the purchase-and-sale agreement," Leeman shot back. "I felt it was important to put the onus on Rockbridge because it's their building that's displacing the clock."

The event center, which needs approval from the Planning Board and Historic Preservation Board, would include a pre-event area with glass walls facing Congress Street that would also be used as an art gallery.

Under the purchase-and-sale agreement, the hotel must operate an event center in the hotel's addition for at least 10 years, and hold at least six public art shows a year in the space. The hotel, however, retains final decision-making authority and could cancel those events.

Hotel Manager Bruce Wennerstrom, who has represented Rockbridge Capital during the negotiations with the city, said the developer would like to get the foundation built by this winter.

The purchase-and-sale agreement would allow Rockbridge Capital to back out of the sale if approvals are not received before Feb. 15.

The agreement would allow the city to withdraw the sale if approvals are not granted by June 1.

The nonprofit Friends of Congress Square Park, which sought to prevent the plaza sale through a referendum, was thwarted last week by the city attorney, who said citizens cannot petition the council on fiscal matters, such as selling city property.

On Monday night, the group put out a news release saying it will challenge the city's ruling in court.

"Tonight's vote is an offensive move on the (city of) Portland's park system," Frank Turek, the group's president, said in a written statement. "The city is forcing our hand. If we continue our work to protect Portland's parks, our only choice is to take this to court."

After the council's vote, some protesters voiced their displeasure, using the proponents' argument that the event center is needed to fix a failed public space.

"City Hall is a failed public space," said one protester as he walked out of the council chamber. "We should sell that too."

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