The Dana Warp Mill, which traditionally has been a home for industrial and manufacturing firms, has been undergoing a change over the past few years. Now, more and more, space inside the mill is being converted to office space, and the manufacturers who helped fill the mill from the beginning are finding themselves on the way out.

As the mill continues to attract white-collar firms, which tend to have higher payrolls and deeper pockets than industrial or artisan workshops, rents continue to rise. As a result, industrial businesses that have been at the mill for years are not having their leases renewed and are being told they are going to have to find another home.

Mill owner Tim Flannery said that he has chosen not to renew the leases of the manufacturing businesses, some of which are on month-to-month leases now. Instead of signing long-term leases with those businesses, Flannery said he would like to have those businesses start moving out of the mill by the end of the summer.

Flannery said he is actively seeking to purchase other space for these mill tenants, most likely in a warehouse environment, although he hasn’t identified a site yet.

“They’ve been there with me for six or seven years and I have loyalty to them,” Flannery said. “I’m looking for space. My goal would be to keep them in Westbrook.”

There has been a good deal of work done to rehabilitate the mill over the last 10 years and the prospective tenants looking at space in the mill have shifted to a different type of tenant with fewer manufacturing businesses and more tenants looking for office space, Flannery said.

“It’s just the way it has evolved. The manufacturing side has been there a number of years and served a purpose,” Flannery said. “The mill had a lot of vacancies, and they brought tenants and jobs to Westbrook.”

“The sense I get is the tenor of the building is shifting to more service and certainly lighter use,” said Erik Carson, Westbrook economic and community development director. “The conflict is whether the businesses there blend together. It’s a really big challenge.”

Workshops such as Tim Hill Fine Woodworking and Maine Dovetail, which came to the mill when it was beginning its transition and trying to attract tenants as a business incubator with lower rent, are now on the low end of the financial scale.

When Flannery Properties first purchased the mill, some spaces rented for 50 cents per square foot-most spaces now rent for $5 per square foot. Flannery said that he raised prices when he bought the mill and will continue to raise rents as the market demands. “I’m just going to go with the market flow,” he said. “As rents move up, where does it become inefficient for (the manufacturing businesses).”

Some smaller manufacturing businesses said they couldn’t afford to pay much higher rents.

“We’re in the traditional field of cabinet-making and furniture-there are limits to what we can pay,” said Tim Hill, of Tim Hill Fine Woodworking. “We cannot be paying more than $6 a square foot.”

Hill said that he has another year left on his 5-year lease, but he said Flannery has approached him about moving to another building if Flannery can find one. Hill said he could see the writing on the wall about his company’s future at the mill. “We’re definitely going to have to move eventually out of the building,” Hill said. “Whether it’s a year from now, it’s going to happen. And I don’t know where (we’re going) yet.”

Hill said he would need another two years to comfortably make a transition out of the building, given that he put $60,000 into the space when he moved in for renovations and would need to do the same to another space if he moved.

Joe Pollak, owner of Knock on Woodwork and Maine Dovetail, makers of wood drawers, said that the Dana Warp Mill has been a good space for him the last six years. “I’ve grown a lot,” he said. “(I’ll) probably never have another space like this with the high ceilings and huge view of the river.”

Pollak said he initially signed a five-year lease and then a one-year lease, and he said Flannery refused to give him another lease when that one expired in September.

Pollak said it will be difficult to find affordable space if Flannery doesn’t find a space for him and the other small manufacturers because businesses like his don’t generate a lot of money.

“(Flannery) can get more money out of white-collar businesses. I guess it’s just sort of how it goes,” Pollak said. But he said he’s not bitter about the situation and appreciates Flannery being honest about wanting them to go but not just throwing them out. “I think it was a good move for him to do that,” he said.

A worker at Maine Dovetail in Westbrook’s Dana Warp Mill. Mill owner Tim Flannery is looking to move out industrial businesses in favor of office space.Tim Hill of Tim Hill Fine Woodworking inside his shop at the Dana Warp Mill. Hill is one of several business owners who could be looking for a new home because of mill owner Tim Flannery’s decision to move out industrial businesses in favor of higher-paying office space.