Court names Boulos to manage Dana Warp Mill property for now

WESTBROOK – The Dana Warp Mill, one of Westbrook’s showplace development properties, was put under new management by court order this week.

Bank of America contends that the mill’s owner, Dana Warp Mill LLC, is in default of a $4.8 million mortgage.

The renovated former spinning mill at 90 Bridge St. is now in receivership, and Boulos Property Management was appointed by a Cumberland County Superior Court judge this week to manage the property until the mortgage dispute is resolved, according to Morris Fisher, president of CBRE/The Boulos Co. of Portland.

Fisher stressed that the mill’s approximately 40 tenant businesses shouldn’t notice an impact because their lease agreements will continue to be honored.

“All the tenants will be just fine operating their businesses there,” Fisher said.

He said Boulos Property Management is now the “receiver” of the property. He explained that legal term.

“When a lender is calling a default on a loan, they have right to ask the court to appoint someone to oversee the property,” Fisher said. “That way they can get an independent person involved to manage the assets, collect rent and pay bills.”

He said the receivership is an interim step that will continue until the legal dispute over the mortgage is resolved, either by the current owner working out a refinancing plan with the bank or by the sale of the property to a new owner.

The Maine Department of the Secretary of State lists the principal member of Dana Warp Mill LLC, a Maine corporation, as developer Timothy A. Flannery. The registered agent is Leslie Lowry, a Portland attorney.

Neither Flannery nor Lowry could be reached for comment by the American Journal’s deadline on Wednesday.

However, Keith Luke, the city’s director of economic and community development, said early Wednesday afternoon that he had spoken to a consultant who has been working with Flannery on further development plans for the mill.

Luke said that it is the city’s “understanding that Tim Flannery is working actively and aggressively to reclaim ownership or title to the property. He’s still a player.”

According to the order appointing a receiver, Bank of America claims that the Dana Warp Mill company is in default of a $4.8 million promissory note originally issued in April 2007.

The bank says it sent a notice of default to Dana Warp Mill this April. Another note was sent on July 13, the bank says. That July note said that the mill company had not cured the default and had 10 days to do so by paying the entire mortgage in full. The total sum that the bank claimed the mill owed at that point is not specified in the order. Fisher said he did not have details on the financial dispute, which he said is between the lender and the borrower.

The former red-brick spinning mill overlooking the Presumpscot River originally opened in 1881. Flannery has owned the 250,000-square-foot building since 1997, and has made headlines in recent years as he attracted an eclectic mix of businesses there.

The mill had been the traditional home for industrial and manufacturing businesses in the city. When Flannery bought the property, some spaces rented for 50 cents per square foot.

But Flannery put in a lot of work to rehabilitate the building and by 2006, he had raised the rents to $5 per square foot. He stated then that he had chosen not to renew the leases of manufacturers such as a woodworking business. Instead, he said he wanted to attract tenants looking for office space.

The mill ended up becoming an incubator for small businesses, particularly those run by artists, who found the comparatively low rents a haven from the higher prices charged in Portland.

One such business was Artforms, a designer and manufacturer of screen-printed and embroidered garments that has been at the mill for about 10 years. Owner Kip Stone said his business was formerly located in Portland on Riverside Street.

“We were one of the early tenants,” he said. “It was an exciting time. We all flocked to Westbrook.”

But, Stone said, his business expects to move to Brunswick by the end of the year when its lease at the mill expires because Flannery didn’t renew it.

“We were one of the tenants whose lease was not renewed so he could execute his development plans,” Stone said.

Flannery announced plans in the summer of 2008 to add 66 loft-style residential apartments to the mill building. Artforms is located on the fourth floor of the mill, in a space where some of the apartments were to be constructed.

It’s not clear where Flannery’s plans for the apartments stand. But, Stone said, although he didn’t want to leave the mill, he doesn’t bear his landlord any ill will and in fact was disappointed to learn about his apparent financial difficulties.

“I’m sorry to hear the news for Tim’s sake. It’s a tough climate these days to be a businessman,” Stone said. “He’s a good landlord. He really made that building.”

Another longtime tenant is Common Census, a business that provides management-consulting services. Daniel Freund, president, said his company has been there 10 years and would like to remain at the mill. He loves the company’s wide-open workspace with huge windows overlooking the river.

“The mill has been a super cool place to work,” he said. “I hope that Bank of America can continue to see the unique, the honestly unique, aspects of this property. Everyone who comes in the office says, ‘What a cool place to work.’”

Fisher said that Boulos Property Management has not yet had time to obtain information on the exact number of tenants in the building – which he believes is about 40 – or its vacancy rate, or ascertain what space currently is leasing for per square foot.

But he said that he expects that space in the building will “continue to be available in the same way” as it has been previously.

The city has assessed the property at about $3.8 million.

Jerre Bryant, Westbrook’s city administrator, said the city would work with tenants and whomever the owner is going forward.

“We still have a lot of confidence that it’s going to be a very valuable and viable property in our downtown,” he said.

The Dana Warp Mill, a renovated former spinning mill at 90 Bridge St., is now in receivership, but the 40 tenants have been assured their leases won’t be affected.
Staff photo by Tess Nacelewicz