January 17, 2013

Developer puts Portland condo project on hold

The 24-unit Newbury Lofts project planned for a site along Franklin and Newbury streets is "not quite viable yet," the developer says.

By Randy Billings rbillings@pressherald.com
Staff Writer

PORTLAND — A planned development in the India Street neighborhood is being delayed indefinitely, causing concerns that project may not move forward at all.

click image to enlarge

An architectural rendering shows the Newbury Lofts proposal for 24 condominiums in a five-story building on Portland’s Franklin Street.

Image courtesy of Archetype Architects

click image to enlarge

The Newbury Lofts were originally expected to be under construction by now and open by this fall, bringing 24 market-rate condominiums in a five-story building along Franklin and Newbury streets.

The property owner and developer, S. Donald Sussman, who is the majority owner of the Portland Press Herald, said in a written statement Wednesday that he is hitting the “pause button” on the project.

“Unfortunately, the current climate makes the project not quite viable yet,” Sussman said.

According to the website for Newbury Lofts, 13 of the 24 condos were under contract to be sold. With the price of those condos ranging from $200,000 to $664,000, developers already had $4.25 million in sales lined up. The cost of the project was estimated to be $5.8 million.

“Selling half doesn’t guarantee selling them all,” said Tom Federle, Sussman’s real estate attorney for the project. “You don’t see any return until you sell those last few units.”

Hugh Nazor, of the India Street Neighborhood Association, said area residents are concerned that the project will be canceled.

Sussman’s development team worked closely with the neighborhood to develop a plan for Sussman’s six properties, bordered by Franklin, Hampshire, Newbury and Federal streets.

Residents got behind the 65-foot tall tower, hoping it would re-invigorate a section of their neighborhood riddled with abandoned buildings and blight.

The association is sending a letter to Sussman expressing concern about the delay, Nazor said.

“We have very much appreciated Mr. Sussman’s past interest in the neighborhood and are very disappointed this project will leave the neighborhood with the same problem it has had for a while now,” Nazor said.

Federle said the development team has not set a construction date.

The Newbury Loft development team has maintained that Sussman is not looking to make money off the development, which he hopes will revitalize the neighborhood.

When asked if Sussman planned to flip the property for a profit or was intent on being the developer, Federle said, “He’s got a keen interest in this property being developed in a way that is good for the neighborhood and the city.”

Sussman echoed that sentiment in his statement.

“Hampshire Street is a great project and has the potential to play an important role in revitalizing this historic neighborhood,” he said. “I hope it won’t be long before the time is right to break ground on the Hampshire Street project, and until then I will continue to invest in other efforts that support Maine communities.”

The project was approved by the Planning Board on Sept. 11, 2012.

The subdivision approval is valid for three years and the site plan approval is valid for one year with the option of seeking an extension up to three years from the approval date, said Barbara Barhydt, the city’s acting planning division director.

The team will use the delay to re-evaluate their development proposal, said Federle, who did not detail other development options on the table.

Federle said there were other variables involved Sussman’s decision, including other area developments and planning efforts.

“With all these moving parts we want to keep our options open,” Federle said.

The India Street neighborhood was selected by Sustain Southern Maine as one of 10 Centers of Opportunity study areas in southern Maine. The study will provide a context for a larger land use plan for the neighborhood that is expected to begin later this year.

Meanwhile, several major projects and properties are now in flux.

The Bay House development is currently under way and will consist of 94 market-rate apartments in two buildings, a parking garage and 5,700 square feet of retail space.

The Catholic Diocese of Maine has purchased the Rite Aid shopping plaza on Congress Street for $2.75 million, according to spokesman Dave Guthro, noting the parcel is an investment property on which the diocese will pay taxes.

Finally, the second phase of New Hampshire-based Opechee Construction's development of the former Jordan Meats site is in question.

Phase two would have consisted of 18 housing units, 6,400 square feet of office space, 2,200 square feet of retail and a parking garage. Opechee President Mark Woglom said Wednesday the company has sold the phase two site, bordered by India, Market and Fore streets, but would
not disclose details of the sale.

Also a possible factor for developers in the India Street neighborhood, Federated Cos. is seeking approval to build up to 700 residences in the nearby Bayside neighborhood.

Staff Writer Randy Billings can be contacted at 791-6346 or at: rbillings@mainetoday.com
Twitter: @randybillings

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