PORTLAND — The ground floor of the former Cumberland Cold Storage building on Merrill’s Wharf remains mostly empty nine months after Pierce Atwood and its staff of 135 lawyers moved into the upper floors.

The owners of the renovated building have yet to find any marine tenants. Even though the city’s new waterfront zoning rules allow up to 45 percent of the ground floor for non-marine users, there are only two non-marine tenants, a yoga studio and a small law firm, which combined take up less than 10 percent of the 18,000 square feet available.

The situation at the building occupied by Pierce Atwood mirrors the lack of activity on the rest of the city’s waterfront, which has yet to experience any significant non-marine development since the City Council decision in December 2010 to loosen the zoning rules.

Before the zoning change, only marine businesses were allowed on ground floors in an effort to preserve Portland’s working waterfront.

City officials and pier and wharf owners blame the recession for the lack of interest.

“The economy has been so bad, I don’t think anybody has been really able to take advantage of it yet,” said Ken McGowan, who owns Custom House Wharf.

“Everything is the same. Nothing has happened,” said Pete McAleney, who owns New Meadows Lobster and a portion of Portland Pier.

Indeed, there has not been a single site plan application to the city for what’s known as the central waterfront zone, an area that stretches from the Maine State Pier to the International Marine Terminal. It includes outer sections of wharves and piers that are at least 150 feet away from Commercial Street.

The two biggest projects in the zone have both involved new sheds to store bait. Pierce Atwood’s new headquarters was built prior to the zoning change.

In 2010, pier and wharf owners lobbied the city for the new zoning, arguing that they needed more non-marine tenants to boost revenues and have enough money to fix their piers, which are expensive to maintain.

Because the groundfishing industry has struggled for more than a decade, there is less demand for marine uses.

The pier owners may have overestimated the attraction of a pier location for non-marine users. The lack of activity there is in sharp contrast to the Old Port district, which does not have much vacant retail and office space, according to commercial broker Roxane Cole. One reason: Space on the piers is removed from business activity on Commercial Street, she said.

Still, she said, the greater flexibility in zoning eventually will yield results. “This sort of thing will take time to mature,” she said.

Drew Sigfridson, the broker working for Waterfront Maine, the owner of the building occupied by Pierce Atwood, said he has been marketing the ground floor of the building for a year.

“The tough part of our building is that it’s off Commercial Street,” he said. “Retailers like to be right on Commercial Street.”

Because demand is low for marine uses, he said, the rent is going to be much lower for those uses.

The asking price is $21.50 per square foot for non-marine users and $12 per square foot for marine users.

Another issue is compatibility. Marine uses shouldn’t be disruptive to office workers in the upper floors, so a bait processing company wouldn’t work, he said. Ideally, the best fit would be a marine research lab or office space, he said.

According to a city survey completed last year, the central waterfront zone had 375,000 square feet of ground floor space, two-thirds of which was occupied by marine uses. For those buildings available for marine use, the vacancy rate was 9 percent.

When the council changed the zoning in 2010, there was no pent-up demand for non-marine uses, said Greg Mitchell, the city’s economic development director. Since then, the economy has been sluggish, he said.

Another obstacle is the additional expense of erecting a new building on a pier or wharf, said Joe Malone, a commercial broker working with Peter Cianchette on a possible development project on the Maine Wharf.

The Maine Wharf faces serious issues due to lack of maintenance. Cianchette has issued eviction notices to three businesses on the wharf because the support pilings underneath are deteriorating and pose a safety risk.

Malone said Cianchette is now working on a plan for an office and retail project on the wharf and will begin the permitting process later this summer. Currently, there are no tenants for the project, and Cianchette won’t build unless he gets tenants, Malone said.

Residential development on the waterfront would generate more interest, Malone said. He said the City Council made a mistake by extending its ban on residential development — including hotels.

Charlie Poole, whose family has owned Union Wharf and had lobbied the council for the zoning change, said pier owners never viewed the zoning change as a panacea. He said he still supports that zoning as another tool.

“I don’t think anybody said there would be people knocking on the doors if the thing passed,” he said. “It just affords us the opportunity to do something.”

 

Staff Writer Tom Bell can be contacted at 791-6369 or at:

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