WATERVILLE, Maine — When Paul Boghossian launched the partnership that restored the historic Hathaway Mill in Waterville five years ago, he had no idea he’d have to wait until 2013 to start renovations on the other two buildings in the mammoth Lockwood Mills complex.
Back in 2007, there had been no Wall Street collapse, nor tighter lending standards adopted in its wake. He also had a North Carolina business partner who had been hailed as a master of mill restorations and headed up his own capital investment firm.
Almost simultaneously, development money vanished, as did his business partner, leaving Boghossian the sole developer to finish restoration of the former Hathaway Shirt factory. Today, the complex houses 67 apartments and 130,000 square feet of office and retail space and Boghossian is ready to turn his full attention to the Lockwood Mill complex.
At just shy of 500,000 square feet, it’s one of the largest remaining 19th century industrial sites in Maine, and is immediately adjacent to Waterville’s downtown. The Main Street shopping district lies just across a six-lane approach road to the bridge to Winslow.
Reconfiguring traffic so that Waterville has a pedestrian-friendly downtown is just one of the issues Boghossian is tackling in his most recent project, which includes refurbishing the two buildings in Lockwood Mills complex previously occupied by Central Maine Power Co. and Marden’s, and putting them before the planning board and city council, so far to generally favorable receptions.
He envisions a hotel, restaurants, retail and office space, and many new apartments — one of the most successful features of the Hathaway renovation.
“When I was trying to show an apartment there recently, I had to show my own unit,” he says. “None of the others were vacant.”
Boghossian, a Colby College grad who began his career restoring mills in his native Rhode Island, also wants the city to commit to $1 million in road and intersection improvements that include restoring two-way traffic to Main Street and replacing the six-lane arterial — which he calls “hopelessly inefficient” — with a roundabout similar to the one that originally marked the site.
Waterville Mayor Karen Heck says the traffic plan is doable, and necessary to re-create the downtown ambience that once brought shoppers from around the region.
“Paul has invested years of his life and millions of dollars in our city,” Heck says. “It’s about time we reciprocated.”
A partnership gone sour
Boghossian says redeveloping the two buildings, collectively about the same size as the Hathaway Creative Center that he renovated and reopened in 2008, will cost as much as $25 million. The overhaul of the National Historic Register properties will use both federal and state historic tax credits.
“That’s what makes projects like this viable,” he says. “It’s like having 55-cent dollars when you go to the bank.”
He’s learned some valuable lessons in financing, he says, following the almost four years it took to partially extricate himself from an original partnership with Tom Niemann, a North Carolina developer who owns the Kennebec Arsenal in Augusta. That long-stalled project has resulted in the state exploring litigation to reclaim the property.
Problems, Boghossian says, began almost immediately after the finishing touches were put on the Hathaway project in the winter of 2008-09. Niemann was supposed to manage the two largely vacant Marden’s and CMP buildings and bring in financing to replace the $500,000 Boghossian had invested in them, supposedly for the short-term only.
“He never brought in a dime,” Boghossian says of Niemann. “And he didn’t even pay the electric bill or fill the oil tanks. The tenants were repeatedly given shutoff notices.”
Attempts by Mainebiz to reach Niemann for comment for this story were unsuccessful.
Boghossian started foreclosure proceedings that dragged on for years that ultimately resulted in default judgments in September, making him sole owner of the Marden’s and CMP buildings. Niemann remains the largest single owner of the Hathaway building, though with a minority share.
Boghossian concedes some of the delays would have happened anyway, even without the wrinkle of the failed partnership.
“There was no financing for this kind of project after the financial crash, and it isn’t likely that we’d have been able to sign up anchor tenants,” he says.
Now that the economic forecast has brightened a bit, he thinks it’s time to go forward with the Lockwood project.
The middle CMP building, at 53,000 square feet and two stories, and the Marden’s building that overlooks downtown — four-and-a-half stories and 168,000 square feet — lend themselves more to housing than commercial development, more so even than the Hathaway project, says Boghossian, who contrasts Hathaway’s fully occupied apartments with the about 80 percent occupancy rate of its office space and a lower proportion of the first-floor retail.
“These two buildings are narrower, and we’ll be able to get away from the longer, deeper spaces that makes the Hathaway units relatively large for downtown living,” he says.
Many of the Hathaway apartments are 1,000 square feet or larger, and carry market-based rents of $1,000 a month. The units offered in the other buildings will run from 500-800 square feet, and average 650 square feet, which will make rents about $750.
“In this market, that’s much more affordable and increases their appeal,” he says.
The Marden’s building has drawn considerable interest from hoteliers, says Boghossian, and could support an 80-room inn with a large restaurant, along with retail units and some housing.
“That’s one of the things downtown needs to put it back on the map,” he says. Existing hotels and motels are all clustered around Waterville’s two interstate exits, the closest well over a mile away.
Boghossian is thinking even further down the road, to a possible cooperative program with Thomas College, which offers a popular program in hotel management.
“They’re always looking for places to intern, while hotel chains are also looking for good employees,” he says. “It could be an excellent match.”
If a hotel does locate in the mill buildings, a parking structure across the street on a city-owned lot would be needed. Boghossian envisions a series of walkways connecting the three buildings and the garage, so that — as in other northern cities — tenants could access the entire complex, and reach their cars, without ever having to step outside.
Inspirations from the past
When he’s having a difficult moment, as Boghossian says he does, now and then, he takes inspiration from the original story of the Lockwood Mills. When a group of wealthy Waterville citizens decided the time was ripe for a major industrial expansion in the 1870s, they chose Amos D. Lockwood, who had built mills in Boston and Providence, R.I., as their designer and engineer.
Not only was Lockwood a skilled building designer, but he was “a practical genius” when it came to waterpower, Boghossian says, and in charting the intricate channels of penstocks, sluiceways and millwheels that went into making an efficient 19th century plant. By 1876, 33,000 textile spindles were in operation and the Lockwood Co. employed 1,300 people at its peak, with production continuing until 1955; Hathaway Shirt lasted another 40 years.
“The owners were so impressed that they named their company not after themselves, but their builder,” Boghossian says.
In bringing these mill buildings back to life, he says he hopes to replicate a similar brand of persistence and ingenuity.
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