Rising Portland property costs could present an opportunity for Topsham developers to build more housing and office space, according to a market analysis of the town’s commercial corridors presented to the select board Thursday evening.
Topsham Development, Inc. President Curtis Neufeld presented a summary of the 124-page report, which consultant group Camoin Associates drafted this spring. The document, which includes analyses of the real estate market and the economic feasibility of several types of commercial development, will help Topsham developers and officials move beyond “gut feelings” when evaluating which projects are right for the town, according to Neufeld.
“We’ve never really had data from professionals,” he said. “I think it can serve us well in the future.”
The study focused on two commercial corridors that include the Topsham Fair Mall, the Crooker site and Maine Street. It found a strong market demand for medical office space and mixed-use space as well as moderate demand for a 200,000-square-foot distribution center and 80-room hotel.
Exploring demand is just one step in deciding whether to pursue a project, said Neufeld, who added residents might not want a large distribution center, even if it would be profitable. Developers and town leaders will also need to monitor the actions of neighboring towns, which share a market with Topsham.
“If something gets built over at Brunswick Landing before something gets built here, the area may only support one,” he said. “I don’t know that we necessarily want to race to beat our neighbors, but that’s sort of the reality of it.”
According to the analysis, Topsham’s commercial corridors have one distinct advantage in attracting business and industrial space: their immediate access to Interstate 295, which makes them easily accessible to travelers from Portland, Lewiston and Augusta.
“If you have two-thirds of (the) state’s population within 35 miles, it says that there’s an opportunity, right?” agreed Don Spann, chairperson of the Topsham Planning Board.
Topsham’s central location has made it especially attractive to homebuyers fleeing rising prices in Portland, according to the analysis. It estimates there will be a demand for 86 new rental units and 295 new owned units in Topsham in the next five years, figures that Neufeld said are likely low.
“This is nothing new,” said Sue Spann, a Topsham realtor. “Portland agents have not been able to find homes for their clients in Portland in part because of supply and in part because of pricing.”
Increasingly difficult market conditions will make it challenging to satisfy the demand for new housing in Topsham, according to Spann. She said supply chain problems have made the cost of building a new home 35%-40% more expensive than buying an existing structure, while rising interest rates have pushed monthly mortgage payments far higher than they were a year ago.
After Neufeld’s presentation, select board members questioned the town’s role in helping to promote the development of affordable housing projects through subsidies or inclusionary zoning policies the like one attached to Brunswick’s temporary housing moratorium.
Neufeld admitted he didn’t have the answers but said addressing Topsham’s housing shortage is the first step in attracting commercial development to the area.
“We need to be able to welcome people to our community with good jobs and good places to live,” he said. “That’s kind of what it’s all about.”
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