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."

Department store fills void at Maine Mall

September 9, 2013 in Articles

Author: Jessica Hall
Publication: Portland Press Herald

Amid challenging times for regional malls comes a rare achievement in South Portland – no vacancies.

SOUTH PORTLAND — Retailers hope the arrival this week of Bon-Ton Stores Inc. as an anchor tenant at the Maine Mall will increase foot traffic and sales at the shopping center, but sluggish retail sales nationally and competition from online shopping sites are likely to keep diverting customer spending from traditional department stores.

Carl D. Walsh/Staff Photographer

Bon-Ton is set to open Thursday at the Maine Mall, filling the site of the former Filene’s. The store sells a mix of high- and moderate-priced products and will employ about 170 people.

Those stores are banking on cosmetic changes in the stores and features such as customer service and high-end brands to bring in shoppers, especially in time for the peak holiday shopping season.

The arrival of the York, Pa.-based chain puts the Maine Mall, which has more than 1 million square feet of retail space, at 100 percent capacity, which is unusual for regional malls. Nationally, the vacancy rate at malls hovered at 8.6 percent in the fourth quarter last year, according to real estate research firm Reis Inc. That compares with an 11-year high of 9.4 percent in the third quarter of 2011 and a low of 4.9 percent in the second quarter of 2001.

Nationally, the outlook for retail sales has been lackluster. Retail sales in August were weak for the usually lucrative back-to-school season, the second-biggest shopping period of the year behind the winter holidays.

For the nine U.S. retail chains that reported August sales for stores open more than a year, sales rose 2.9 percent, falling short of Wall Street expectations.

Karen Pelletier of Portland said she knew Bon-Ton was opening soon because she had seen advertisements on city buses around town, but said she didn’t plan to make a point of stopping by to check out the new store.

“I try shopping online mostly. I don’t window-shop,” Pelletier said. “Sometimes you want to touch and feel something, so it’s good to come in person. But I often use technology to find a cheaper price.”

The growth in retail sales in South Portland, where the Maine Mall is located, has outpaced sales growth for the state as a whole, said James McConnon, a professor of economics at the University of Maine.

In 2012, South Portland consumer sales rose 4.5 percent from 2011, while general merchandise sales rose 4 percent. That surpassed statewide growth of 3.3 percent in consumer sales and 2 percent in general merchandise sales, McConnon said.

In the first six months of 2013, both consumer and general merchandise sales in South Portland rose 4.8 percent versus the same period a year earlier. That compared with the state growth of 2.7 percent in consumer sales and 1.5 percent in general merchandise sales in the same period, McConnon said.

“South Portland has been performing very well as a retail community. That Bon-Ton wants to be part of this indicates that they think they can generate sales,” McConnon said.

Bon-Ton is set to open Thursday, filling the site vacated by Filene’s in 2006. It will join Macy’s, Sears and J.C. Penney as the mall’s anchor tenants.

“We’re always looking for opportunities, and the Maine Mall itself was a draw. To have a mall with 100 percent occupancy is pretty rare these days,” said Alton Walker, vice president and regional store director for Bon-Ton.

Walker admits the store has yet to carve out an identity in the state. The Maine Mall location is its first in Maine and the name and brand are still unknown here.

“People don’t know what a Bon-Ton is. I’ve heard everything from candy store to Chinese restaurant,” Walker said.

Marybeth Ford of Brunswick had a typical reaction to the news that Bon-Ton was opening. She said she’s not a frequent mall shopper.

“I don’t come often. I didn’t even know Filene’s was gone,” Ford said. “I’m not a big consumer.”

The store has high expectations to meet. The Maine store’s opening follows a lower-than-expected earnings report and trimmed financial guidance by the parent company on Aug. 22. That prompted Zacks Investment Research to downgrade Bon-Ton’s stock to “strong sell.”

Other new arrivals at the Maine Mall include The Paper Store, as well as food establishments such as Qdoba and Charlie’s Grilled Subs. A Clarks shoes and accessories store also recently opened. Home goods store Pier 1 Imports is scheduled to open in mid-October. Pier 1, which had previously been in Portland until 2005, already has a location in Augusta.

The area around the mall has also seen recent growth in retailers. Nordstrom Rack, the outlet division of upscale retailer Nordstrom Inc., opened its first location in Maine this spring. Seattle-based Nordstrom opened the 30,000-square-foot store at Maine Crossing Shopping Center, near other name-brand tenants such as Target, Bed, Bath & Beyond and Men’s Wearhouse.

Having more stores opening in the area benefits everyone, Walker said.

“Anything that makes the shopping experience better is good for all of us,” he said. “It’s an issue of convenience. You want to get the biggest bang for your buck in terms of money and time – you want to have a destination that makes it worth your time to go shopping. It’s very good for South Portland not to have this location vacant anymore.”

The new Bon-Ton boasts wide aisles, bright lighting, extra-large dressing rooms and seating areas, part of a trend toward making the shopping experience customer-friendly.

“It’s not the way stores were built 20 years ago. There used to be a trend toward narrow aisles and filling as much retail space as possible with merchandise. Now, we try to listen to what people want and balance our needs and expenses,” Walker said.

Bon-Ton – French for “good tone,” meaning proper fashion or style – will sell a mix of higher-end designer lines such as Calvin Klein and Michael Kors, as well as moderate-priced brands such as Dockers, and a mix of its own brands.

Bon-Ton plans to tweak its products as needed, after feedback from customers.

“We know we’ll start out with a bang because we’re new, followed by the holiday shopping season.

Then we may need to tailor the assortment from what we initially offer after we hear from customers,” Walker said.

The 120,800-square-foot store will carry clothing, cosmetics and home goods. The chain also operates stores elsewhere in New England, including Concord, N.H., South Burlington, Vt., and Westfield, Mass.

McConnon said the arrival of a new shopping experience is likely to generate some interest and foot traffic in the short term.

“It has a diverse product offering and a wide customer base, so it fills many different demographics,” said McConnon. “It’s going to get a lot of interest. People will come just to see it and hopefully that will spill over into increased traffic and spending throughout the mall.”

Macy’s Inc., which operates about 840 department stores nationally and is a direct competitor, isn’t worried about the arrival of Bon-Ton, said Macy’s district vice president Phil Wilson.

Macy’s recently rearranged some departments to streamline customer traffic through the store, but that was routine, Wilson said.

“We’re not going to make any changes because of a new guy in town. The changes have nothing to do with Bon-Ton,” he said.

“We are the premier retailer at the mall. We’ve built our reputation on what the Maine customer wants,” he said. “We’re always looking for opportunities to make small changes, small investments, new vendor shops, new brands. You’ll continue to see routine upgrades.”

Bon-Ton will have about 170 employees at the new store, and plans to increase that to 200 workers for the peak holiday shopping season.

Walker said the Maine Mall location isn’t under extra pressure to perform well – all the stores face pressure.

“Everyone is trying to find the right balance between expenses and controlling costs and making sales,” he said. “Everyone talks about Filene’s and they have such passion in their voice. It’s inevitable that they will compare us. We’re hoping everyone gives us a shot and tells us what we can do to make things better. We don’t want to assume we know the answer or what everyone wants.”

Commercial Real Estate Market in Portland on fire

September 5, 2013 in Articles

Author: David Harrigan
Publication: Portland Press Herald
One of the most well known commercial buildings of Portland's skyline, the People's United Building, sold earlier this month for $5,550,000.  The 10-story office building is located in Monument Square at 465 Congress St. and provides 84,000+/- square feet of office and retail banking space. Previously known by many as the Maine Bank & Trust Building, the former bank was acquired by People's United in 2009.  People's United remains a major tenant in the building, occupying five floors in this landmark property.  465 Congress Street sold to 5 Monument Square, LLC, a commercial real estate investor and developer with major holdings in the Old Port and other areas throughout greater Portland.  Karen Rich, Partner & Vice President of Cardente Real Estate, represented the seller, L. E. Springer Inc. in the sale and the Purchaser was represented by Steven Baumann of Compass Commercial Brokers.

$38 million Portland project 'starting to gel'

August 28, 2013 in Articles

Author: Randy Billings
Publication: Portland Press Herald

Planning Board members give favorable reviews to the ambitious Bayside plan for apartments and retail space.

PORTLAND – Preliminary designs for the first phase of a high-rise apartment and retail complex in the Bayside neighborhood received favorable reviews from the Planning Board on Tuesday.

click image to enlarge

An artist rendering of the 'midtown' project, Phase I.

Image by CBT Architects, Boston, Mass.

The ambitious project -- called "midtown" -- calls for three phases that could take as long as 10 years to complete. It envisions 675 market-rate apartments in four towers of about 15 stories each, 1,100 parking spaces in two garages and 93,000 square feet of retail space.

The first phase would consist of a 165-foot-tall residential tower and six-story parking garage.

David Hancock, principal at the Boston-based design firm CBT Architects, and Greg Shinberg, owner of the Portland-based Shinberg Consulting, presented the preliminary design for Phase 1 for the first time on Tuesday.

"It's really starting to gel," said Planning Board Chairwoman Carol Morrissette.

The design includes pre-cast concrete, glass and metal skins with red accents.

"It's modern industrial," Shinberg said of the design after the meeting.

CBT replaced another architectural firm, Perkins Eastman, due to differing artistic visions with Federated Cos., the Miami-based developer, Shinberg said.

The scale of the project has caused concern among some residents.

While planners were encouraged by the preliminary design, Alex Landry, a member of the Bayside Neighborhood Association, said it reminded him of a beach-front condo in Miami rather than a building that would fit into Portland's historic landscape.

"I was really looking forward to seeing some brick, but I didn't get it," said Landry, who was otherwise optimistic about the project because it promises to bring an influx of residences to the neighborhood.

Shinberg said the tower will be stepped back between the third and fifth floors so it is less imposing to pedestrians. He acknowledged that challenges remain -- such as addressing the tower's effect on wind and shadowing.

"I find this very encouraging," board member Bill Hall said. "You're headed down the right road."

Federated Cos. has 3.25 acres of city-owned land on Somerset Street under contract to buy for $2.3 million.

City and neighborhood officials have made a priority of redeveloping Bayside, a former industrial neighborhood next to Interstate 295 that has been home to rail yards, scrap yards and warehouses.

The first phase is projected to cost about $38 million. It would consist of 180 to 190 market-rate apartments, a six-level parking garage for 705 vehicles and more than 40,000 square feet of ground-floor retail space at the corner of Somerset and Pearl streets.

Shinberg said he expects to have another workshop with the Planning Board on Sept. 10. His goal is to receive board approvals by the end of October and begin construction shortly thereafter. "We'll try to shoot right ahead," he said.

Cumberland Ave. housing project wins approval

August 28, 2013 in Articles

Author: Randy Billings
Publication: Portland Press Herald

The Portland Planning Board acts over neighbors' objections to the development's limited parking.

PORTLAND – The Planning Board on Tuesday unanimously approved a 57-unit housing development on Cumberland Avenue that will mix market-rate and affordable units but provide only limited parking.

click image to enlarge

Digital renderings of 57-unit, mixed-income apartment complex proposed by Avesta Housing at 409 Cumberland Ave. in Portland.

click image to enlarge


The project, which will have just 18 parking spaces, was approved over the objection of nearby residents, who complained that finding parking is already difficult – especially in the winter.

Seth Parker, the director of real estate development with the nonprofit Avesta Housing, which is developing the project, said construction would likely begin in December and last about a year.

The $10.2 million project at 409 Cumberland Ave. would have 11 market-rate units and 46 affordable units in a five-story building.

Avesta hopes to secure additional financing for a roof-top greenhouse and raised garden beds, Parker said.

If that happens, it would be the first green roof in the city, according to planners.

"We haven't been able to find another one," said Caitlin Cameron, the city's urban designer.

The project was approved after a lengthy and at times contentious discussion about parking.

Many area residents, especially those living on Mechanic and Hanover streets, said 18 spaces are not enough, since parking is already a challenge in the neighborhood.

Others, however, noted the need for affordable housing -- especially as the city grapples with homelessness. They said the units would attract residents who preferred to walk, bike or use public transit.

Hanover Street resident Hilda Taylor acknowledged that the project was forward-thinking in that it plans on having mostly car-free residents.

"I think it's looking a little too forward to a reality that's not quite here yet," Taylor said. "People have cars."

Board members mostly agreed that parking was already an issue in the neighborhood, but disagreed whether it was an issue they had the authority to handle.

Board members roundly criticized the Payment in Lieu of Parking program, which allows developers to pay a one-time fee of $5,000 for every parking space required by the city code that it cannot provide. That money goes into a general transportation fund that can be used to improve parking, public transit and bike-pedestrian amenities, according to planning division director Alex Jaegerman.

Board members believe the $5,000 is too low, calling it a political number, not one based on reality, since the cost of building one structured parking spot is $25,000.

The city code requires one parking space be provided for each residential unit. However, other options have been added in recent years for housing developers in business zones. In addition to the Payment in Lieu of Parking program, one car-sharing space counts as eight parking spaces.

Avesta requested -- and the Planning Board granted -- permission to only provide 0.7 spaces per unit without penalty.

It intends to pay the city a fee for 15 parking spaces it will not provide on the site and employ the option of having a dedicated car-sharing space count for eight spaces. City staff counts the total number of spaces as being 40, even though only 18 spaces are actually being provided.

A spirited debate ensued about whether the board could generate more revenue to address parking issues in the neighborhood by denying Avesta's request to be responsible for just 40 parking spaces, rather than the 57 required by code.

Board member Jack Soley said that making Avesta responsible for all of the parking under city code would only amount to an additional $85,000, which was a fraction of the overall cost on the $10 million project.

However, board member Bill Hall said the applicant provided detailed information justifying the reduced parking requirement and staff had signed off on it.

The board ultimately rejected Soley's recommendation by a 6-2 vote.

Avesta plans to finance the project with a 20-year property tax reduction intended to promote affordable housing development; a federal low-income housing block grant through the city; and low-income housing tax credits through the Maine State Housing Authority.

Eleven units would be leased at market rates ranging from $825 to $1,400 per month, while 46 subsidized units would go for $669 to $1,030 per month for households with incomes ranging from $25,000 to $40,000.

Steve Hirshon, president of the Bayside Neighborhood Association, said Avesta should commit to the green roof design due to the level of public investment in the project.

Parker said the greenhouse and raised garden beds would cost an additional $450,000.

"We're still fully committed to figuring out how to make that work," he said.

The project would also include a community kitchen for public cooking classes on the first floor, as well as additional classroom and office space.




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