With $2.3M land acquisition, Midtown development closer to a reality
Courtesy / City of Portland
A rendering of Portland's Midtown Project.
Courtesy / THA Architects
A rendering of the proposal of Midtown Building 3 submitted to Portland's Planning Board in March.
PORTLAND — It was a long time coming, but development of the 3.5-acre Midtown site in West Bayside is on track, now that the $2.3 million sale by the city to The Federated Cos. has been completed.
The property is a long strip running along Somerset Street between Pearl and Elm streets, parallel to Marginal Way. In effect, the parcel is bookended by a Whole Foods Market and a Trader Joe’s — demographics nearly any developer would find attractive. It is also situated along the Bayside Trail.
The sale and development of the land is the culmination of a decade-long effort by city planners, who envisioned redevelopment for the West Bayside neighborhood, said Economic Development Director Greg Mitchell.
Bayside has long been a run-down, industrial area of scrap yards and warehouses — and remnants of that legacy remain, despite the addition of high-end retailers and housing.
“The plan recognized that we wanted to take the type of development that was happening along Congress Street, our central business district, and extend it into Bayside toward I-295,” said Mitchell. The plan calls for mixed-use buildings designed to bring in more 24-hour life, including retail, residential and recreation options.
“Everyone recognized it was housing that we needed,” Mitchell said. “This area was a great solution. From a land use and development standpoint, there are few locations on the peninsula that can support this increase in residential density.”
Recession slowed development
The city acquired the 3.5-acre parcel, an abandoned rail corridor, about 15 years ago from the Maine Department of Transportation. Throughout the planning process, the site has been a temporary location for recycling containers and as a snow dump in the winter.
The city hired CBRE|The Boulos Company to market the 3.5 acres. Over the years, a number of developers came forward with projects that didn’t come to fruition for various reasons, including the recession.
Mitchell, who was hired by the city in late 2008, initiated a relationship with Miami-based Federated Cos., whose work spans real estate acquisition, development, construction and management. Its CEO, Jonathan Cox, hails from New England. Federated was already in the process of successfully turning around a troubled student-housing project in West Bayside.
While meeting with Cox and his team on the student housing project, Mitchell introduced the Bayside concept.
“It was in the depths of the recession, but they did their market research and could see that Portland had huge potential,” said Mitchell. “So in 2010, we entered into a public-private partnership with them.”
The contract called for the city to sell the 3.5 acres in West Bayside to Federated and invest $9 million in U.S. Department of Housing and Urban Development funds into redevelopment. Originally, Federated planned four apartment buildings and street-level commercial space, as well as parking garages.
Over the planning process, the original plans have been modified to account for public feedback, including a 2013 lawsuit by Keep Portland Livable.
Moving ahead with a new vision
Plans now call for a single 800-space parking garage, three 6-story buildings comprising 450 market-rate apartments and 87,000 square feet of ground-level retail space. The revised plan was approved in 2015. The recent land sale was the last part of the process.
“The partnership was always designed so the developer would get regulatory approval first,” said Mitchell. “The city did that for its own protection. We wanted to control the real estate and make sure the developer would do what he said he would.”
Mitchell conservatively estimated Federated’s costs for build-out will be about $75 million, not counting millions of dollars it has already spent on engineers, architects, attorneys and the like.
Former use complicates process
“We’re very appreciative that Jonathan Cox has hung in there for the length of time it’s taken to get to this point, and for his personal commitment and the company’s commitment in recognizing the Portland marketplace as strong enough for this kind of project,” said Mitchell.
Construction, which is expected to last three years, will start this summer, pending removal of contaminated soil.
“It’s a challenging property to develop, as a former scrap yard,” said Mitchell. “Some of the land has been cleaned up. The city obtained state and federal approval on a cleanup plan for the remaining contaminated soil, which will be excavated and appropriately disposed of.”
The property is within a tax increment financing district, but in this case, the city will retain an estimated $1.5 million in annual tax revenue to invest in public infrastructure, including consolidation of Public Works to Canco Road, and continued revitalization of Bayside through disposition of additional city-owned land formerly occupied by Public Works operations.
The development coincides with Portland’s growing demand for residential housing and additional retail and services.
Other recent developments in the neighborhood include the conversion of the former Schlotterbeck & Foss site, the Bayside Bowl expansion on Alder Street, a Bangor Savings Bank branch on Marginal Way, the redevelopment of the Century Tire site on Marginal Way, and the recently permitted Fork Food Lab; plus multi-million-dollar public infrastructure upgrades through new streets, lighting, sidewalks and landscaping.
“Bayside has come a long way,” said Mitchell. “It’s popping right now.”
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