A fire escape makes a pattern along the Pepperell Mill Campus as the evening light hits the bricks in Biddeford. A real estate development company is in the process of purchasing the mill, and state and city leaders have expressed worry about potential double digit rent increases. Shawn Patrick Ouellette/Staff Photographer
BIDDEFORD — Leaders in Biddeford are expressing concern about a potential increase in residential and commercial rents on the Pepperell Mill Campus that could come following the sale of the mill later this year.
Much of the property is under contract by Chris Rhoades and Andrew Preston, real estate developers who are affiliated with the Texas-based Presidium Group. They told the Portland Press Herald they expect to close on the property in mid-December.
According to information on CrowdStreet, where the prospective buyers were seeking investors, Presidium has 10 of the 16 buildings that make up the Pepperell Mill campus under contract for approximately $52.7 million, broken out to $25 million for the residential space and $27.7 million for the commercial space, according to the invitation to investors.
The property was purchased by Doug Sanford in the early 2000s, for about $1.4 million. Sanford did not respond to a telephone message by the Courier seeking comment about the sale of the mill on Tuesday.
Local and state Tax Increment Financing mechanisms helped fund renovations, city and state leaders said.
Rhoades said he and Preston commissioned a market study and determined that the current rents, both residential and commercial, are about 20 to 25 percent below the market rates, according to the Press Herald report. Rhoades told the Portland newspaper they “will probably raise rents as tenants move out but haven’t made a decision on across-the-board rent hikes.”
In a 2-minute promotional video by Rhoades and Preston on CrowdStreet, Preston said commercial rents were 35 to 50 percent below market rate and residential rates were 30 to 35 percent below market.
“We’re going to use best practice from Presidium and their established team to come in here and raise rents and do some capital improvements at the location,” Preston said in the video.
The campus has 152 residential units, and a waiting list of 400 people, according to information posted to prospective investors on CrowdStreet. There are 146 commercial tenants.
City and legislative leaders have voiced concerns about the prospect of increased rents. Maine House Speaker Ryan Fecteau, Mayor Alan Casavant and the Biddeford legislative delegation say they are inviting the Maine-based developers to a meeting at the Speaker’s Office in Augusta to learn about their intentions and to advocate for the residents and businesses at the Pepperell Mill Campus.
“At the heart of the work we’ve done in Biddeford, one of our missions has been to preserve affordable housing, which we view as a critical element for economic stability and thriving families and communities,” said Casavant in a joint news release with Biddeford’s state delegation. “This brazen rent increase would be a devastating blow to the small businesses who have revitalized our community. These buildings hold outdoor gear manufacturers, distilleries, local food producers, clothing designers and local artists, to name a few. It is imperative that any new owner of the mill be aware and considerate of the interests of the community, and not simply interested in profit margins.”
Fecteau said he would normally be excited about new possibilities for downtown. If the new owners “come even within earshot of double-digit percentage increases, it would be no doubt devastating for families and businesses located in the mills,” he said.
State Sen. Susan Deschambault said the community is already struggling with a housing affordability crisis.
“How can we attract a strong workforce if folks can’t even afford to live here,” said Deschambault, in part. “Biddeford is my home, and it’s home to hardworking people. Many of the businesses in these buildings are small mom-and-pop stores who contribute to the fabric of the community. A big hike in rent like this would absolutely force them to shut their doors, leaving a hole in our downtown.”
State Rep. Erin Sheehan owns Lorne Wine, just across Main Street from the Pepperell Mill Campus
“Over 150 families who rent here could be priced out of their homes and 150 commercial tenants could lose the place they’ve grown their small businesses,” said Sheehan. “This could really hurt Biddeford’s business community.”
Rhoades and Preston have been involved in other developments, most notably the conversion of hundreds of military housing units at the former Naval Air Station Brunswick, now called Brunswick Landing, to private housing, according to the Press Herald story. As well, they own the Portland Time & Temperature Building.
“Affordable housing is one of the largest challenges facing our state and it is outrageous that investors could help our downtown price out over 150 renting families and 150 small businesses,” said Biddeford City Councilor Amy Clearwater, whose ward includes the Pepperell Mill Campus, in the news release. “The pitch to hedge funds they’re advertising is that they can raise the rents in a substantial way to get a return on investment on the backs of our neighbors. I see that as tragically short-sighted for what our community needs and deserves.”
Comments are not available on this story.
Send questions/comments to the editors.
