PORTLAND — Richmond-based Shucks Maine Lobster could soon be processing seafood on the city’s working waterfront.
The company wants to lease nearly 19,000 square feet of space in the city-owned Portland Ocean Terminal on the Maine State Pier.
The City Council’s Housing and Community Development Committee unanimously recommended the proposed 15-year lease Wednesday. The council is expected to consider the lease agreement July 15.
“It really is creating a hub of activity here in Portland that starts to brand us,” said Greg Mitchell, the city’s economic development director. “It’s identifying and reinforcing our working waterfront and creating jobs.”
Shucks Maine Lobster employs about 65 people in a 25,000-square-foot plant in Richmond, said its manager, John Hathaway.
He said the company uses high-pressure water processing to humanely kill lobsters, then ships the fresh, raw, out-of-shell lobster meat all over the globe.
The nearly seven-year-old company would employ nine full-time workers and 60 part-time employees in Portland, according to a memo to the committee.
Hathaway said Wednesday morning that the company plans to invest $2 million to $3 million in renovations to the building. If the lease is approved by the city, operations will likely begin in the summer of 2014, he said.
Shucks Maine Lobster could have chosen a cheaper location for its expansion, Hathaway said, but being on Portland’s working waterfront would enable it to sell the sustainable Maine brand along with lobster.
“There is no better culture you can develop in your company than to actually be right in the working waterfront,” he said. “Our goal is to help make Portland the center of gravity of Maine lobster.”
The company has established an annual competition for lobster chefs, the Shucks Maine Lobster Chef World Series. The competition was held last year in Scarborough. Hathaway said he would like to hold future competitions in Portland.
Shucks would lease the pier space for $10.54 per square foot, totaling $202,208 in the first year of the lease. The rate would increase by 2 percent annually over the 15-year lease, and the company would have the option of leasing an additional 5,700 square feet.
Shucks would be the second business to lease space from the city in the Portland Ocean Terminal. Ready Seafood now leases about 11,200 square feet at the end of the pier.
Mitchell said Ready Seafood, a distributor of live lobsters, is paying the same price per square foot.
The city can buy out the leases if the council decides to take another shot at redeveloping the pier, Mitchell said.
Some pier owners and real estate professionals have complained over the years about the city competing with businesses in its role as a property owner.
The city, for example, tried to sell and redevelop the Maine State Pier into a hotel with stores and restaurants, and it now uses the nearby Ocean Gateway Terminal as an event facility.
Phineas Sprague, who owns the Portland Company Complex on the eastern waterfront, said he understands that the city must generate revenue to maintain the pier.
But he said the city must be careful about competing too hard against the private sector, because it could have a “stifling effect on the investment.”
Mitchell said the lease rates charged by the city are actually above market rates for space that needs to be renovated. Similar properties have lease rates of $8 to $10 per square foot.
Mitchell said there were no other waterfront spaces large enough to accommodate Shucks.
John Ready, who handles purchasing for Ready Seafood, said he wishes Shucks Maine Lobster the best of luck in Portland.
Ready doesn’t consider Shucks a competitor. In fact, he said, the companies have done business together.
“No matter how you look at it, it’s a good thing for us, the state and the city of Portland,” Ready said. “I see it as another person in the state of Maine trying to promote Maine lobster and hopefully get more money for the fishermen.”