January 29, 2020
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Prime waterfront lot in Portland hits the market, could fetch $20 million

Troy R. Bennett | BDN
Troy R. Bennett | BDN
This undeveloped property with a water view and adjacent parking garage are considered prime development opportunities in Portland.

PORTLAND, Maine — One of the first properties cruise ship passengers see when they step onto dry land in Portland is hitting the market.

The undeveloped 1.34-acre site tucked between the eastern end of the high-traffic Fore Street and waterfront Thames Street has long represented a prime redevelopment opportunity in a city already experiencing a building boom.

“When you look at the various sites available in Portland for development, this is one of the best ones,” said Jeff Levine, Portland director of planning and urban development. “It’s a real opportunity for somebody.”

Frank O’Connor, a managing partner with the brokerage firm NAI-The Dunham Group, said his organization posted the property this week, and interest in the property is already heating up.

“We’re very excited about it,” O’Connor said. “I’ve had a ton of activity on it. My phone is basically ringing off the hook. I’m getting calls from all over the country. Portland is basically the San Francisco of the East Coast. There’s a lot happening here.”

The property for sale also includes the adjacent 720-space parking garage at 167 Fore St., but it does not include the landmark brick Grand Trunk Railroad building at the intersection of India and Thames streets.

The historic building was previously tied up in a split ownership, with the Gorham Savings Bank owning the bottom-floor unit and Boston-based Intercontinental Real Estate Corp. — the firm that also owns the nearby undeveloped lot and parking garage — holding rights to the upper floors.

O’Connor said Intercontinental agreed to sell the upper floors to Gorham Savings and place the downtrodden building, once named by Greater Portland Landmarks to its annual “Places in Peril” list, under a single owner.

That left the rectangular lot behind it, largely overgrown and surrounded by a chain-link fence, unencumbered by the historical considerations the old Grand Trunk building would have brought to a redevelopment project there.

Developers received city approval eight years ago for an ambitious project at the site featuring 122 condominiums, 28,000 square feet of retail space and 100 indoor parking spaces, O’Connor said, but the economic recession sank the housing market and now the current owners at Intercontinental are looking to sell.

Levine said city codes allow buildings to reach 65 feet in height at that location, and the parcel, which sits on the edge of the India Street neighborhood, could be affected by a city effort to create new development guidelines for the historic area. Those guidelines could include the implementation of “form-based codes,” which require buildings to conform to certain architectural styles.

But he said that while the city would have high standards for anything built there, much of what the city hopes for would be agreeable to most developers.

“You could do something fairly sizeable on that site,” he said. “From our perspective, we’d be looking for something that would respect the Grand Trunk building and wouldn’t just look like a big block dropped down from space.”

O’Connor said he expects the property could sell for a price “approaching $20 million.”

“It’s a primo site,” he said. “That could kick off some retail development in that area. This is directly across the street [from the Ocean Gateway Terminal, where cruise ships dock].”

The city of Portland welcomed nearly 82,000 cruise ship passengers this year.

The property hits the market at a busy time in the Portland development scene. The 10-acre waterfront Portland Company complex, just east of the undeveloped lot, was purchased from Portland Yacht Services owner Phineas Sprague Jr. by a local development team last year.

That development group — which includes well-known local principals Jim Brady, Casey Prentice and Kevin Costello — has yet to publicly announce plans for the property, but it has sought zoning changes to allow mixed uses in what was previously restricted to marine-related uses.

Portland Community Chamber consultant Christopher O’Neil said in 2013 that the Portland Company complex sale could be the lead domino in what could be “a billion dollars of development” in Portland.

Since then, Sprague has begun to rebuild his Portland Yacht Services campus on the other end of the city waterfront, on West Commercial Street, while the International Marine Terminal, reinvigorated by the arrival of Icelandic shipping company Eimskip, has planned an expansion.

The Casco Bay Ferry terminal underwent a $3 million overhaul, and the city signed lease deals to add or expand two seafood companies in the space at the Maine State Pier.

Two $100-million-plus projects — a 32-acre redevelopment of the Thompson’s Point peninsula and the four-tower Midtown complex in the Bayside neighborhood — have been proposed in the city in recent years, and Portland also is in the midst of adding more than 500 new hotel rooms.

The city of Portland has assessed the 167 Fore St. parking garage property at a value of more than $9.6 million, while the adjacent 1.34 acres of land is valued at just more than $1 million.

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