SOUTH PORTLAND – What is arguably the most visible spot in South Portland has sat vacant for three years. Now, most of the space at 100 Waterman Drive will be occupied by the fall.

Three of the four floors have been sold, and work crews are getting the spaces ready for the new owners to move in.

Additional Photos

This fall, the building at 100 Waterman Drive in South Portland will be occupied by the South Portland Housing Authority and by First Atlantic Corp. Gabe Souza/Staff Photographer

The 16-member office team of the South Portland Housing Authority expects to occupy the first floor in September.

The third and fourth floors, meanwhile, have been purchased by First Atlantic Corp., which will move its corporate offices this fall from St. John Street in Portland.

City officials are encouraged by the sales, and hope they are part of a larger rejuvenation of the Knightville area, which has struggled to redefine itself since the Casco Bay Bridge opened in 1997. The new bridge diverted thousands of cars that used to pass through the Knightville and Mill Creek areas each day when they traveled across the old Million Dollar Bridge and onto Ocean Street.

Developer Andrew Ingalls got the city’s approval in 2007 for the four-story building, and construction was completed the following year. Then the economy and the real estate market experienced meltdown, leaving the building, complete with its eye-catching copper finishing, unoccupied.

“We finished about three months after Lehman Brothers declared bankruptcy,” Ingalls said.

Despite everyone’s awareness of the economic downturn, Ingalls said he has been asked repeatedly around town why the building was vacant.

“The reality was, virtually nothing sold anywhere for about two years,” he said. “It just stopped. Businesses were trenching while they were trying to figure out what the economy was going to do to them.”

Ingalls said the building, designed with energy-saving features and more than 30 points toward national Leadership in Energy and Environmental Design standards, has held up just fine without tenants.

Michael Hulsey, executive director of the South Portland Housing Authority, said he and his staff are excited to make the move to Waterman Drive from 51 Landry Circle, where the agency has been since 1977.

“I think it is going to be a great home for us, and I feel that we got a very fair deal,” Hulsey said. “We are looking at the feasibility of adding additional housing units at the location we’re leaving.”

South Portland Housing Development Corp., a separate nonprofit organization that serves as the development branch of the housing authority, bought the first floor for $895,000. The sale closed June 16.

Hulsey said the housing authority, as the tenant, will pay about $70,000 per year to the development corporation. The housing authority owns or manages about 600 units for elderly, disabled and low-income residents. Its annual operating budget is about $6.7 million.

First Atlantic Corp., which owns several elderly housing facilities in Maine, purchased the third and fourth floors for a total of $1.65 million, according to the South Portland assessor’s office. Ken Bowden, First Atlantic’s chief executive officer, could not be reached last week.

As recently as last year, the asking price on the entire 32,000-square-foot building was $5.4 million. Ingalls is the developer and broker, and Read Hart Inc. was the ownership partner.

Ingalls said he has received some interest in the second floor, but it is not yet under contract.

“Even though the pricing on it has not been what we had hoped for, it’s gratifying to know that the demand for high-quality buildings is coming back,” he said.

Staff Writer Trevor Maxwell can be contacted at 791-6451 or at:

tmaxwell@pressherald.com

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