March 16, 2010

Prime land part of newspaper package

TUX TURKEL

— By

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Michael Liberty (handout photo)

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20071009_WalshPier

Gordon Chibroski

Additional Photos Below

Staff Writer

The investor group negotiating to buy Blethen Maine Newspapers also would acquire one of the best downtown development sites in Portland, two commercial brokers said this week.

The deal would include the newspaper's former press building and employee parking lot at 385 Congress St. Tearing down the nearly vacant, 43-year old structure, these brokers say, would give a buyer a high-profile two-acre parcel that some day could support an office tower or mixed-use project.

''It's really one of the top sites in Portland,'' said Tom Moulton, a broker at NAI The Dunham Group. ''I have a couple of clients who would like to jump on this immediately.''

It's hard to find a comparable piece of land, said Joe Malone, designated broker at Malone Commercial Brokers. The site is next to city hall, just off Franklin Arterial and within walking distance of the Old Port and waterfront.

''It's a tremendous piece of real estate, one of the best in Portland,'' Malone said.

The sites' real estate potential is generating some speculation, for two reasons: Behind the scenes, potential buyers -- including the one talking with Blethen -- have hired consultants to study the properties' market values. Also, two principals in the investor group, Maine Media Investments, have development backgrounds in the city.

Robert Baldacci is vice president of Ocean Properties, which recently lost out on a high-stakes competition to redevelop the Maine State Pier. Michael Liberty developed 100 Middle St. and Chandler's Wharf in the 1980s, and most recently was part of a now-stalled plan for a Westin Hotel at the former Jordan Meats plant.

Both men this week downplayed the role of real estate in the newspaper sale.

Property values are a distant consideration in the ongoing negotiations, Baldacci said. The 385 Congress St. property could be a key future asset, Baldacci acknowledged. But he stressed that the investment group is concentrating on the larger issue of the viability of the newspaper's media operations.

''We recognize the real estate assets,'' he said. ''But it's not the focus of this deal at all.''

Baldacci said brokers have contacted him over the past week to ask about the availability of the parcel. He has been telling them their calls are very premature.

Liberty, who has a long-term friendship and business relationship with Baldacci, said the group hasn't discussed real estate in its evaluation of the newspaper purchase. And Liberty, who lives primarily in Los Angeles and focuses on investments and acquisitions around the country, said he has no personal interest in Blethen's properties.

''I have no intentions of developing anything in Maine. Period,'' he said.

Some local brokers, however, are expressing interest in the newspaper's downtown properties, two weeks after Blethen announced it had entered exclusive negotiations with Maine Media Investments over the sale of its assets in Maine, which include the Portland Press Herald/Maine Sunday Telegram. Despite the bad economy, Moulton and Malone say, developers plan for projects that are years away.

City officials also are taking that long view. They're hoping that any new buyer has reuse plans for what they're calling one of the last big pieces of open land in the downtown commercial district.

''The city would like to see it put to its highest and best use,'' said Pat Finnigan, Portland's assistant city manager. ''We'd be excited to see it developed to its full potential.''

Developers have twice in the past 20 years introduced major construction plans that included 385 Congress St. Neither project went forward, but brokers are always looking ahead to the next uptick in the business cycle.

Blethen Maine Newspapers owns three downtown properties: 385 Congress St.; home office at 390 Congress St.; and a deck in a parking garage at 134 Lancaster St.

The former printing press building at 385 Congress St. was built in 1965. Along with the parking lot, it covers a city block bounded by Congress, Pearl and Myrtle streets, and Cumberland Ave. The property is assessed for tax purposes at roughly $3.7 million, with the building making up $2.3 million of the total.

Moulton, who has researched the properties for clients, said he thinks the building assessment is too high. The market value of the site with the building torn down, he estimates, is roughly $2.5 million.

The 390 Congress St. property is really two attached buildings, one built in 1925, the other in 1947. Together they cover 84,000 square feet. They are assessed together by the city at more than $4.4 million. Placing a market value on 390 Congress St. is difficult, Moulton said, because the offices need updating. He estimates a range from $3.6 million to $5.8 million.

The company also owns the second level of the 20-year old parking garage at 134 Lancaster St. It is assessed at $720,000.

The company also owns its current printing plant on Gannett Drive in South Portland. The 131,000 square foot building was built in 1989, on 21 acres. It's assessed for tax purposes at $16.9 million.

During a tour of Blethen's properties last week, Richard Connor, a Pennsylvania newspaper publisher who's heading the investor group, said there currently is no plan to close the Press Herald's downtown operations and consolidate in South Portland. The group has, however, hired a consultant to assess the newspaper's property in Portland, he said.

One broker with a deep knowledge of the Portland site's market potential is Joe Boulos, principle at CB Richard Ellis/The Boulos Co. In 2005, Boulos led an effort to build a hotel-convention center-sports complex on land that would have included 385 Congress St. and an adjacent parking lot, Top of the Old Port. Boulos' project died after he was unable to obtain a public funding component for part of the financing.

Since then, the Boston-based owners of Top of the Old Port have had periodic inquiries from interested buyers, according to Edie Hale, a property manager at Dirigo Management Co., but none recently.

Boulos said this week that he had been hired to assess the Blethen properties for another potential buyer of the newspapers and declined to discuss the issue publicly.

Malone said that he, too, had been hired by a group interested in buying the newspapers. That group declined to pursue the deal, Malone said, but had made it clear that real estate development would have been an important part of the equation.

Staff Writer Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com

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Additional Photos

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Photo by John Ewing/Staff Photographer.. Tuesday, August 12, 2008...Portland Press Herald building at 390 Congress Street in Portland.

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Gordon Chibroski

 


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