A developer from Florida wants to build a six-story hotel with top-floor condominiums near Portland’s eastern waterfront, the latest in a series of projects that have added more than 650 hotel rooms in the downtown area in the past two years.

The project, estimated to cost $20 million, indicates that developers still see opportunities in Portland despite a development boom in hotels and market-rate and luxury housing, and speculation that the market could become oversaturated.

The proposal calls for a 150-room AC Hotel by Marriott at 158 Fore St., with roughly 4,000 square feet of restaurant or retail space. Sixteen one- and two-bedroom condos would be built on the top floor.

The project would be near the former Portland Co. complex, where a different development plan has sparked a referendum effort to protect scenic views by limiting building heights under certain circumstances. It was not immediately clear whether that effort could affect the new hotel proposal.


The project is proposed for a portion of a vacant, weed-strewn, 1.39-acre lot between the Ocean Gateway garage and the Ocean Gateway terminal. The property was once considered for luxury condominiums as part of the “Riverwalk” development, which got bogged down in lawsuits between the owners.

Those lawsuits were settled in 2013, and other properties originally included in the Riverwalk plan received approvals from the Planning Board in May. A four-story, eight-unit condominium complex is planned for 185 Fore St., and a five-story, mixed-use office building is planned for 16 Middle St.

The developer of the latest project, Ara Aftandilian of the Portland Norwich Group, which is based in Sanibel, Florida, could not be reached for comment Tuesday.

Plans filed with the city say the developer is proposing to subdivide 158 Fore St. into two lots. The hotel would be built on two-thirds of an acre bordering Fore, Hancock and Thames streets. No development plan has been filed for the rest of the property.

The Planning Board will likely take up the proposal this month or in early November, according to the city’s planning office.

AC Hotel by Marriott is a boutique brand of hotels, billing itself as “modern hotels with Spanish roots and European design.” The brand exists in seven countries, including five locations in the Unites States – Chicago, Kansas City, Miami Beach, New Orleans and Washington, D.C.

According to planning documents, the hotel would be a C-shaped building, with a 20,385-square-foot footprint and a three-season gathering area with warm southern exposure. Drivers would enter from Fore Street, where there would be a cobblestone cul-de-sac and a courtyard.


The ground-floor building materials would be pre-cast concrete, with aluminum storefronts and a metal-and-glass canopy. The upper floors would be brick, composite metal panels, metal shingles and punched aluminum “warehouse” windows.

Parking would be provided in the Ocean Gateway garage, where only 330 of the 720 parking spaces are under lease.

Hospitality industry experts are still trying to assess the marketwide impact of the hundreds of hotel rooms that have opened in the past couple of years.

Since December 2013, more than 650 hotel rooms have been added in downtown Portland, including the Press Hotel, The Hyatt Place Portland Old Port and the Courtyard Portland Downtown/Waterfront.

Although some speculated that so many new rooms would lead to lower rates, that doesn’t appear to be the case. Industry analysts predicted in January that the average daily rate for hotel rooms would continue to increase, and the Maine Innkeepers Association said last month that Portland has absorbed the new hotel rooms over the past two years.

Greg Dugal, executive director of the Maine Innkeepers Association, said Tuesday that occupancy rates are down nearly 1 percentage point year-to-date, compared with the same period last year, when there was an occupancy rate of 61 percent.

Occupancy rates for June and July were up 4.2 and 5.4 points, from 66 percent and 78 percent, respectively, but the occupancy rate in August dropped 5.2 points from last year, Dugal said.

The average room rate remained relatively stable at $159 a night. The $2 increase from $157 last year is much smaller than the $11 increase that occurred from 2013 to 2014, he said.

“I think what you’re seeing is rate resistance,” he said, noting that Portland’s hotel rates are approaching Boston’s rates.

But Dugal said it’s too soon to say whether Portland can support even more hotel rooms.

“The end of this year is going to be really indicative,” Dugal said. “This will be our first full year of all of this (additional rooms).”

Developers remain bullish about demand for Portland’s hotels.

Recently, the Florida-based Federated Cos. asked the city about possibly converting two residential buildings that had been approved on Somerset Street into hotels, citing the strong market. City officials objected, and the entire development plan remains in limbo.

A hotel could also be part of the redevelopment of the former Portland Co. complex, at 58 Fore St. The future of that project hangs in the balance as Portland voters decide Nov. 3 on whether to enact an ordinance that would keep building heights from impeding views over the property.

The proposed ordinance also would allow an affected property owner, or 20 other residents, to petition the city to preserve distinctive and highly distinctive views. The city’s planning department could not immediately say if, or how, the proposal could affect the project at 158 Fore St.

As for the hospitality industry as a whole, experts are keeping watch for any significant market changes.

“Right now, we’re steady as she goes,” Dugal said. “But I have a hard time believing we can keep dumping rooms on line and have everything be OK.”


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.