Wednesday, April 23, 2014
PORTLAND – Former partners in an ambitious $100 million mixed-use development that stalled on the eastern waterfront say they are moving forward separately with plans to sell and develop the parcels.
The movement comes after the former partners finally settled a lawsuit filed five years earlier over ownership of the Ocean Gateway Garage, halting progress on a proposed mixed-use development of luxury condos, office buildings and retail space.
The court-approved settlement gave Fred Forsley, president and co-owner of Shipyard Brewing Co., ownership of two parcels directly abutting the Ocean Gateway Garage, while Boston-based Intercontinental Real Estate Corp. retained ownership of the garage and a 1.6-acre lot across Fore Street.
Forsley said he is working with Harborview Properties to find a developer to construct office buildings and/or residential condominiums on the two lots he owns.
He expects to list the properties in the coming weeks.
"I think the market is here for small office and residential," said Forsley, who indicated he is looking to be a partner in the development. "I really think there is a strong demand for residential (units) downtown."
Intercontinental, meanwhile, will likely sell the garage and the vacant lot to a developer within the next three to six months, said Paul Nasser, the company's chief operating and chief finance officer.
Previous planning approvals for more than 100 luxury condos have expired, he said.
"The good news is it seems the market in Portland has picked up," Nasser said. "We've had several inquiries on the property. There's a lot of good uses that can go on that property."
Forsley, Intercontinental and local developer Drew Swenson formed a partnership to build the Ocean Gateway parking garage, which was intended to serve a nearly two-acre mixed-use development that city officials hoped would be an economic catalyst for the eastern waterfront.
The project would have included 125 luxury condominiums, called The Watermark, on what is now a dirt-covered parcel at the intersection of Fore, Hancock and Thames streets. The project also would have included a five-story office building next to the garage at India and Fore streets, as well as 30,000 square feet for retail shops.
The project was approved by the Planning Board in 2006, but only the six-story, 750-vehicle parking garage at Middle and Hancock streets was built, which frustrated neighbors.
The garage opened just as the real estate market tanked in 2008, and the rest of the project never moved forward.
Intercontinental Real Estate Corp., of Boston, agreed to finance the $20 million garage in 2007.
The dispute over ownership emerged after the garage was finished 2008.
Forsley, a partner in Riverwalk LLC, filed the lawsuit against his Riverwalk partner, Drew Swenson, and Intercontinental.
In the lawsuit, Forsley claimed ownership of the garage. But Swenson and Nasser claimed a subsequent agreement changed the terms. That agreement conveyed 95 percent of Riverwalk's assets to Intercontinental and gave the Boston firm 50 percent ownership of the parking garage. Forsley claimed he never authorized the action outlined in the memo.
After years of legal wrangling, attorneys for Forsely and Nasser filed papers in Cumberland County Superior Court in February saying they would settle the case. An agreement was reached and the case was dismissed in May.
Neither Forsley nor Nasser would disclose details of the settlement beyond the land ownership. Swenson, who was also involved in the lawsuit, did not return calls this week seeking comment.
Forsley said the settlement gives him ownership of a 12,000-square-foot lot at the corner of Hancock and Middle streets and a 7,000-square-foot lot at the corner of India and Fore streets.
Brandon Mazer, general counsel for Shipyard Brewing Co., said the current zoning would allow for the construction of a 65-foot tall building.
Drafts of a real estate brochure show conceptual designs of a six-story building at Hancock and Middle, and five-story building at India and Fore.
Forsley said his property is now held by a newly formed company, East India Land Co. LLC.
Forsley said he expects to begin advertising the parcels in the next few weeks as being suitable for a small office building or residential condominiums, with first floor retail.
Nasser, meanwhile, said Intercontinental is now the sole owner of the parking garage and the 1.6 acre lot on Thames Street.
City zoning would allow a 65-foot-tall building at that location.
Attorney Paul Driscoll, who represented Intercontinental, said the company also retained an ownership interest, along with Gorham Savings Bank, in the old Grand Trunk building at the corner of India and Thames streets.
Driscoll said there were other terms of the settlement that he could not disclose.
"There are a lot of terms to that agreement," Driscoll said. "It was a long and involved process."
When the project was first pitched, the city agreed to sell the developers an acre of land at the extensions of Commercial and Hancock streets in 2005. It also gave the developers an estimated $5 million property tax break over 13 years.
City Economic Development Director Greg Mitchell said that tax agreement was given to a single corporate entity based on a specific development plan. Any attempts to modify that agreement would have to be reviewed and approved by the City Council, he said.
Mitchell said he is pleased an agreement had been reached clarifying ownership, which should clear the way for development on some well-positioned land near the waterfront.
"I have had some discussions regarding development interest in this property," Mitchell said.
Staff Writer Randy Billings can be contacted at 791-6346 or at: