When credit card giant MBNA came to Belfast in the 1990s, the company built immense office buildings between routes 52 and 3 where thousands of debt collectors and other call center employees would do their jobs.
MBNA, and its acres of brand-new office space, helped transform the down-at-the-heels blue collar city still reeling from the loss of its chicken processing, sardine packing and shoemaking industries into something else: a place where people clad in business suits came to work in gleaming buildings that featured soaring atriums and top-notch technology.
But that was then.
The credit card company, which sold its holdings to Bank of America in 2006, is long gone. The buildings, though, are still here. And while a lot of the hundreds of thousands of square feet of office space built by MBNA now is owned or leased by such important Maine employers as athenahealth, Bank of America and OnProcess Technology, some of it has been vacant for a long time.
That vacancy has come at a cost: a plummet in tax valuation from $41 million to $16.7 million in four years, which is causing the city to refund its largest taxpayer, a Massachusetts-based real estate investment company, $384,000.
“We’d like to see the buildings sold and for them to be put to full use. That would be ideal, obviously,” Brent Martin, the Belfast tax assessor, told the City Council at a regular meeting earlier this month. “For right now, it is what it is. A very large what they would call a white elephant in the industry, but a very good opportunity for the right people to come along.”
Right now, almost 200,000 square feet of office space in the west side of the complex is vacant. Those buildings are owned by STAG IV Belfast LLC, which leases space to Bank of America and to OnProcess Technology. The empty office space has led to a long-running dispute over the property’s property tax valuation, but Martin said that after several years, the city has come to an agreement with the owner.
“I believe it’s good that we’ve come to a resolution,” Martin said.
Efforts Wednesday to speak with an official at STAG IV were not immediately successful. The company has contested the city’s tax valuation of its property since 2015. At that time, Belfast valued the property at $41 million. Since then, the city lowered its value to $33 million and then $28 million, but the dispute continued.
Through mediation and various expert appraisals, the city and STAG IV settled on new numbers. Its 2016 tax value was set at $17.9 million; its 2017 value was determined to be $17.1 million; and its 2018 valuation was set at $16.7 million.
That’s a steep drop in valuation in just a few years, but Martin said that Belfast has been preparing for this.
“There was writing on the wall that large-scale flex office space is under pressure nationally, not just local to Maine,” he told councilors.
Councilors asked if the city has been documenting STAG IV’s efforts to lease the vacant offices, and Martin said that the company has been marketing the property through CBRE, a worldwide commercial real estate and investment firm.
“That will be something followed going forward, to see where are those efforts,” Martin said.
Belfast City Manager Joe Slocum said that values that drop don’t have to stay down. When athenahealth purchased 200,000 square feet of office space in buildings located on the east side of the complex, the company paid $6 million. Now, the property is valued by the city at about $17 million.
“If you have this obsolescence now, if somebody new does come in, the value will go back up, just like with athenahealth,” Slocum said.