Portland finalizes two new leases for companies at Maine State Pier

Congress Square Negotiations Begin

Posted by Michael Sosnowski

It wouldn’t be Portland if there wasn’t controversy!  The most current debate is around what to do with the Congress Square Plaza.  Rockbridge Capital, who purchased the Eastland Park hotel in 2011 and is currently in the final stages of a $40 million renovation, is trying to persuade city to sell two-thirds of the plaza.  If this is done, they will build a 9,400 sqft event center as part of the overall project.

The historic 86-year-old hotel is scheduled to reopen in December as the Westin Portland Harborview Hotel.

Public discussion has been going on for months and several conceptual plans have been presented.  As expected (and typical) opposition groups have been vocal, and as a result various plans have been presented by the developers.

For a review of the plaza’s history and potential new design, you can download the report: Congress Square Plaza.

The most recent hurdle to be passed was a meeting of the City Council’s Housing and Community Development Committee at the end of May.  In a 3-1 vote it was decided that the city should move forward with negotiations to sell the park property to Rockbridge Capital.

Prior to this decision, the task force assigned to find solutions to improving the plaza was deadlocked 6-6 as to whether to support the Rockbridge Capital plan.  This led to tweaks in the design and the subsequent HCDC meeting, public review and subsequent 3-1 vote.

Passion on All Sides:

Some comments on the plan, from those in attendance at HCDC meeting include:

• “We need to improve the plaza, not privatize it….”

• The new design was not “substantially different” from previous ones.

• Repurposing the plaza as a true plaza .… does indeed net us less open space, but it unequivocally nets us better open space….

• The event center would “enhance what is happening to Congress Square” …. the event center  proposal would be “a fantastic opportunity that will not happen again anytime soon.”

• “The vast majority of Portlanders will not want to see this park go away….” (really?)

• …. opposing it in favor of improving the existing plaza is the result of a “misconception,” because there are no plans to do so.

Next Steps

Following negotiations (assuming they are successful), a vote will be required by the Portland City Council to approve the sale.  There will still be ample time, however, for more debate – as expected.

Tom Hincks, former owner of the Fisherman's Grill in Portland, finalized a new lease for the restaurant on Wednesday. He said he plans to complete some interior renovations and open for business before July 4.

Jack Stiles operated the restaurant for more than 30 years, said Matthew Cardente, who helped broker the lease agreement.

"We're restoring what I remember from back in the day," said Hincks, 46, of Yarmouth, who expressed respect for Stiles and his long run as owner. "I'm just trying to make the old guy proud and make a living."

Stiles did not return calls for comment Wednesday.

Before closing the Jameson Tavern in February, Stiles converted the restaurant's front dining room into a retail space that has been leased to Brahm's Mount, a high-end local textile manufacturer. The lease of the restaurant will not displace Brahm's Mount, Cardente said.

Hincks' lease covers five years with an option after two years to extend the agreement. As long as business is steady, Hincks said, he plans to expand and build a permanent cover over an outdoor patio that is open during the summer.

Cardente, who said he worked at the restaurant years ago, said he is happy that the property will retain its name and identity.

"Everybody who was looking at (the property) either wanted to change the name or do something different," he said.

Built in 1779, the tavern was once an inn. For years, it was said to be the site of the signing of documents declaring Maine's independence from Massachusetts, although that claim now appears dubious.

Hincks said that, in taking over from Stiles, he plans to keep as much of the atmosphere as possible while making aesthetic updates to the space, with new tables and chairs and a refinished bar and floor surface.

Workers have spent three days sanding a thick coat of black lacquer from the decades-old barn boards in the main dining room -- a feature that puzzled Hincks.

"Talk about making a tavern as dark as possible," he said.

While the restaurant's interior will be largely unchanged, the menu will be revamped, with a heavy emphasis on local produce, fish and meats.

Hincks said the only frozen product he plans to use is Maine shrimp, only because of the short duration of the fishing season.

While buying lobsters, clams, crabs and other seafood directly from fishermen takes more time each day than getting it from a traditional food supplier, Hincks said customers in the age of social media and celebrity chefs are increasingly food savvy and willing to return for consistent quality.

The city hopes to see at least 800 more apartments built as demand forces up rents

Bradford, a 26-year-old medical student, and her boyfriend, a financial analyst, have a good rental history with references, a clean credit score and cash to pay the move-in costs upfront.

"We thought that would be a shoo-in for finding the right place," Bradford said.

But it hasn't been. The Biddeford couple is looking to relocate at the end of May, but they have to fight swarms of other prospective tenants just to view available apartments. They're even stretching their budgets to expand their housing options.

"We've contacted a lot of different landlords," she said. "We just don't get calls back."

Such is the state of Portland's rental market, where vacancy rates have dropped from 7.5 percent to roughly 2 percent over the last five years and the average monthly rent for a two-bedroom apartment has risen from $850 to $1,050 over the last four years, according to landlord surveys. Current online listings show that rents are climbing even more in 2013.

The Portland rental market has been a hot topic, with the proposed "midtown" development poised to add 190 market-rate units in Bayside in the short term and 675 over a 10-year period, units that the project's developer argues are crucial to the city's future.

Whether the Portland rental market is truly as tight for tenants as surveys indicate, and how the market will be affected by the Bayside project, depends on whom you ask.

"I've been successful placing everyone," said Michael Smarc, a local rental agent who manages more than 75 units.

There are more than 17,000 rental units in Portland, according to Mary Davis, the city's housing director. Nearly 11,000 of those are on the peninsula.

The Maine Real Estate Development Association partners with real estate companies annually to collect rental information through landlord surveys. According to those surveys, vacancy rates have fallen drastically since the onset of the recession.

In 2007, landlords reported vacancy rates at roughly 7.5 percent. Those rates dropped to between 1 percent and 3 percent in 2012.

That's much lower than the rates beyond Greater Portland. Saco and Biddeford landlords reported a 10-15 percent vacancy rate last year, while those in Lewiston and Auburn reported a 15 percent vacancy rate.

Meanwhile, rents in Portland are rising along with demand. In 2008, landlords reported the average monthly rent for a two-bedroom apartment as $850. Last year, they reported the average monthly rent was $1,050.

A quick review of apartment listings online, however, shows a more drastic increase. On April 26, the asking rent for a top-floor, two-bedroom apartment with laundry and parking in the West End was $1,750, and a two-bedroom apartment in the East End was listed for $1,325.

Demand for rental units increased as the housing market crashed in 2008, when people lost homes to foreclosures and lending for new buyers was tight, said Harper Lee Collins, a Re/Max Realtor.

Collins said the housing market has recovered in Maine, with current inventories being lower than they were in 2005. Property owners who rented their homes out of necessity are suddenly able to sell them, putting renters back into the market. That is still feeding the rental demand in Greater Portland, Collins said.

Maine's housing market recovery mirrors a national trend. Last December, there were about 1.8 million homes on the market, according to the National Association of Realtors. That's a little more than half of the 3 million homes that were on the market in December 2010.

As a Realtor, Collins focuses mostly on home sales, but she is often asked about rentals in Portland. She usually refers prospective tenants to Portland rental agents with a key piece of advice.

"I tell them to be a bulldog on a pant leg to get help," she said. "It's very tough out there right now."

Brit Vitalius of Vitalius Real Estate Group owns 20 rental units in Portland. When a West End studio apartment opened up, Vitalius said he had no problem finding a qualified tenant. In fact, he had too many.

He recently showed the studio to eight prospective tenants over the course of an hour. Six were qualified and would have made great tenants, he said.

Rather than draw a name from a hat, Vitalius went with the first person to apply, because she knew someone in the building and promptly provided a check. The 180-square-foot studio, the equivalent of a 12-by-15-foot room, was rented for $695.

"I probably could have asked for more," Vitalius said. "I wish I had more units."

Greg Shinberg is the local consultant for Miami-based Federated Cos., the "midtown" developer.

Shinberg sees a demand for new, market-rate housing in a city with an old housing stock. He has seen the demand for new market-rate units first-hand as part-owner of 645 Congress St. The 56-unit building has been full since the fall of 2010, six months after it opened, he said.

"There is still quite a bit of pent-up demand in Portland," Shinberg said. "There is just a funky cool to (Portland) that people enjoy."

The city has made increasing housing options a priority. A 2002 housing plan called for the creation of 3,000 new housing units in the city, with a goal of having 25 percent of the total number of housing units in Cumberland County.

The city has held steady at 24 percent of the units in the county, even though 1,949 units, including 912 rental units, have been added in the past decade, Davis said.

The city has invested $7 million to help create 672 of those units, Davis said.

Meanwhile, the city's housing plan calls for the full implementation of the Bayside vision of adding 800 units over five years with an eye toward three-bedroom rental units for families.

Shinberg said Federated is still working out the details, such as square footage and number of bedrooms, for the 675 units envisioned over the next decade.

The first phase of 190 units in a 165-foot-tall tower is expected to get under way later this year and will help alleviate the demand, he said.

But real estate professionals offered different assessments of the project's prospects for success and its impact on the local market, which is driven by young professionals and empty-nesters.

Collins said the developer needs to build units that are at least 1,200 square feet with in-house laundry to be successful.

But Vitalius, the president of the Southern Maine Landlord Association, said many of his prospective tenants are young "hipsters" who want to live in a two- or three-story building. High-rise apartments, like those planned in midtown, could push the apartments out of reach for many people looking to move to Portland, he said.

"It's going to be completely different than the units people are looking for," Vitalius said.

Some real estate professionals believe the rental market will cool down as the housing market heats up, but Shinberg said demand will always be high here.

"Portland is kind of a unique experience," Shinberg said, noting the coastal city's trails, restaurants, arts scene and its walkable neighborhoods. "(And) there are people who don't want the risk of ownership."

When finished, phase one of The Forefront will have a 4,500-seat event center, office buildings, a hotel, a sports medicine facility, a parking garage and a restaurant.

The Libbytown section of Portland, looking up Park Avenue toward the I-295 overpass.

Christopher Thompson told about 60 people Tuesday night that the project, which was approved in June by the city's Planning Board, could take as long as 24 months to complete.

When finished, phase one of The Forefront will have a 4,500-seat event center that will host outdoor concerts in the summer and serve as home to the Maine Red Claws basketball team in the winter.

The complex also will have two office buildings, a hotel, a sports medicine facility, a 700-space parking garage and a restaurant, Thompson said.

"We have made tremendous progress," said Thompson, who told the audience that The Forefront will lead to several street and sidewalk improvements in the surrounding Libbytown neighborhood.

As part of the project, the city and the Maine Department of Transportation, along with the developer, were given a $3 million grant to design and construct traffic improvements in Libbytown.

The city is also considering several options -- such as speed tables, traffic circles and center islands -- to slow traffic on 11 side streets.

Most of the people who attended Tuesday's presentation at the Italian Heritage Center live on the streets, between Brighton Avenue and Congress Street.

"There is an awful lot going on in Libbytown, but I like to think that Libbytown is where it's at," said Edward Suslovic, the district's city councilor.

Suslovic said Tuesday's meeting was held to update Libbytown residents on all of the changes that are planned in their neighborhood, which is generally considered the streets off Park Avenue and Congress Street between Sewall Street and Gilman Street.

Traffic engineers said Thompson's Point Road will be rebuilt and widened from two to three lanes.

The road, which will connect The Forefront at Thompson's Point to the Fore River Parkway and Congress Street, will have an 8-foot-wide walking path.

Sewall Street will be improved to accommodate pedestrians.

New sidewalks and curbing will be installed, along with street lights.

Traffic engineers are also considering converting a section of Park Avenue and Congress Street -- between Denny's restaurant and St. John Street -- from one-way to two-way traffic.

Engineers said they are looking at redesigning and possibly removing some of the ramps that connect Libbytown to Interstate 295.

Suslovic said, "Some of these ramps are redundant (two ramps on Congress Street provide access to the northbound lanes).

"A lot of valuable land is being tied up. We have an opportunity to make these areas safer and to knit back the fabric of the neighborhood that used to exist here."

In the early 1970s, about 100 houses and apartment units were torn down to make way for the highway and interchange -- a project that historians say "cut Libbytown to shreds."