One Riverfront Plaza, the office building that opened its doors last year, has been sold to a New Jersey-based group.

The building’s current owner, local developer Tim Flannery, said Monday he was in the process of closing the sale of One Riverfront Plaza to a group of investors based in Hackensack, N.J.

Flannery declined to reveal the purchase price of the building, but a listing on a national real estate Web site gives an asking price of $23.5 million for the building.

Donald Hanson of Roebling Investment Company of Hackensack, N.J., confirmed Friday that the sale was in the process of closing and he expected it to be closed sometime this week. Hanson also declined to reveal the purchase price.

Hanson said he was purchasing the building along with a group of investors headed by his brother Peter Hanson, who will be the managing member of the group of limited liability companies that will own One Riverfront Plaza. He said the building would be managed out of the Hanson’s New Jersey offices.

Flannery said he didn’t build the office building with the intention of selling it so quickly, but he said the offer came in from Hanson’s group, and he said it just made sense for him to accept the offer and sell the building.

Hanson said his company sprang out of a family-owned business started by his father 50 years ago. He and his two brothers each own their own separate real estate companies, but they sometimes work together on larger deals like Riverfront Plaza. Hanson said his family owns retail properties and office buildings in two dozen states. One Riverfront Plaza would be the company’s sole building in Maine.

The office building has played a big role in the continued revitalization of downtown Westbrook ever since it was announced in late 2002 that Disability RMS had agreed to lease most of the $17 million building. The company originally agreed to occupy four floors of the building, but earlier this year it announced it was expanding, and would be leasing the vacant first floor of the building as well.

Hanson said the fact the building had a stable, long-term tenant was a major factor behind the decision to purchase the building. “They are a very good, well-run company,” he said.

In addition to the attraction of having Disability RMS as a tenant, Hanson said he was impressed with the Portland area, and Westbrook in particular. “The city’s been nice to work with,” he said. “We like the marketplace. We like the Portland market. We think it’s got a good, stable economy.”

Westbrook Director of Economic and Community Development Erik Carson said it’s a good sign that an out of state company has decided to invest so much in Westbrook. He takes that as a sign the city is gaining a reputation as a good place to do business.

“It’s very encouraging to have an out-of-state development interest purchase property in Westbrook,” he said. “It means we’re on the map.”

The building is adjacent to a parking garage the city built at the same time Flannery was building One Riverfront Plaza. As part of an agreement with the city, the owner of the office building has the right to lease all of the spaces in the garage for 25 years for the use of the office building’s tenants. In addition, the city has agreed to lease 90 more spaces within 1,000 feet of the office building, the location of those spaces has not yet been identified.

The city also agreed to provide Flannery with a $1.2 million line of credit in April 2003 to help cover financial shortfalls. The loan, which was supposed to be paid back when the building was completed, was extended several times while Flannery worked to sell the building. City Administrator Jerre Bryant said Monday that the city has received about $1.4 million from Flannery to cover the amount of the loan plus interest.

Bryant said the tax increment financing district agreement that was created for the office building would continue to apply to the new owners. He said the agreement calls for the city to refund property taxes of up to $300,000 per year to the owner of the building for 20 years. The city would keep any portion of the tax bill exceeding $300,000.

Bryant said last year’s tax bill for the building, valued at about $12 million, was $277,000. The city returned all of the property taxes to Flannery.

Once the city undergoes a citywide revaluation, it is likely the value of the office building will increase, and as a result the tax bill will also go up. Bryant said the purchase price of the building will be figured into the revaluation, and it is likely the building’s tax bill will increase as a result.

While the city is not currently realizing any property taxes on the building, Bryant said the city does realize some tax revenue from the building. He said all of the equipment in the building is subject to a personal property tax, which is not included in the tax increment financing agreement. He said there is about $3.5 million worth of equipment in the building, which results in an approximate tax bill of $80,000.

“There’s a decent tax bill being paid for that building, but it’s for the equipment inside,” Bryant said.

While Flannery is selling one building downtown, he will continue to play a big role in Westbrook. He still owns the Dana Warp Mill just across the street from Riverfront Plaza, and he has an agreement with the city to invest $1 million in Westbrook’s downtown over the next five years. Flannery said he is not exactly sure how he is going to fulfill the agreement, which was made as part of a negotiation over the extra parking spaces for Riverfront Plaza, but he said investing $1 million “won’t be hard to do.”

Flannery said he is planning to hold onto the mill. He said he is excited about the potential the mill holds and said he believes businesses are interested in moving there.

“I’m looking forward to working with the Dana Warp Mill,” he said. “I think it’s going to the next level.”

One potential for the mill is an expansion of Disability RMS into space there. When One Riverfront Plaza was under construction, there were plans to construct a sky bridge over Bridge Street connecting the mill with the office building. Flannery said if Disability RMS were to expand into the mill space, the bridge would be built. Hanson also said the sky bridge could still be built, but he said it was not in the immediate plans.

Flannery said he is not sure what his next major project is going to be. “I’m just going to explore and see what’s out there,” he said.

While he is still searching for major projects, Flannery is continuing to buy property in the city. He has entered into an agreement to purchase the old Eagles Club building on Bridge Street. Flannery has the building under contract, and he planned to close on the sale sometime next month. Flannery also declined to disclose the purchase price for the Eagles building.

The building, which is adjacent to the Dana Warp Mill, is home to Bridge Street Billiards. Earlier this year, the Eagles Club moved out of the building and is currently located in the former Knights of Columbus building on Saco Street.

Flannery wasn’t sure what his long-term plans were for the building, except that he doesn’t plan to make any immediate changes and he will honor the pool hall’s current three-year lease. “There’s an existing tenant in there running a pool hall, and it’s going to stay status quo,” said Flannery.

While he plans to maintain the current situation for the time being, Flannery said the site could eventually be used to help ease the congested parking situation in the area by the mill. “I’m trying to think about the future, and I see that site inevitably becoming part of the parking solution,” said Flannery.

Flannery said the land could be used for surface parking, and he would not rule out the possibility of constructing a garage there, though he added he has not made any plans for the building or the land other than continuing to honor the pool hall’s lease.

While he was excited about Westbrook’s future and his role in it, Flannery said he was having “bittersweet” feelings about selling One Riverfront Plaza. “I’ve got a lot of pride and emotions invested in that building,” he said.

Developer Tim Flannery is in the process of selling One Riverfront Plaza.


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