Developer sees future in historic buildings | Developer Tom Niemann says there are plenty of historic development opportunities in Maine. If you're tenacious.
Photo/Courtesy Niemann Capital
Developer Tom Niemann sees rehabilitation opportunities amid the recession
Tom Niemann initially wasn’t pleased to visit the state where he now does substantial business, but not for a reason one might expect. “I tried to avoid coming to Maine, because I knew I’d fall in love with the state,” he says.
Niemann already had plenty of work redeveloping old mills and tobacco sheds in Durham, N.C., his hometown, and didn’t think projects in Maine would be in the picture for another 10 or 15 years. Now, his firm, Niemann Capital, has offices both in North Carolina and Augusta, and he sees Maine as fertile ground for his specialty, the redevelopment of historic buildings.
His first visit to Maine came five years ago, at the behest of Portland architect Tobin Tracey, who was trying to interest a developer in the rebirth of the Kennebec Arsenal in Augusta, a complex of stone buildings dating to the 1830s. “At the last minute, [the other developer] backed away and we were the ones who took it on,” Niemann says.
The Arsenal has been a difficult nut for developers to crack, and still is. Niemann’s initial plans have been revised several times, most recently because of a reduced demand for commercial space. Niemann hopes to start on a housing-centered redevelopment this fall, despite some objections to his use of a city tax break that have been raised now that the project is no longer primarily office space.
His other project — the renovation of the old Hathaway factory in Waterville — has taken a faster track. Niemann partnered with Paul Boghossian of Rhode Island in a project rebuilding 200,000 square feet on five floors. They also plan to renovate buildings in the Lockwood Mills complex.
Niemann has traveled to many other Maine locales, including Lewiston, Portland and Bangor, as well as smaller towns like Dover-Foxcroft and Houlton, searching for potential projects. In Lewiston, Niemann took an option on two mill buildings, but said that leases with existing tenants posed an obstacle to the renovations he envisioned. “The conversation remains open,” he says.
Comparing North Carolina and Maine, Niemann sees similarities and differences. He gives Maine high marks for economic development strategy. “The Pine Trees Zones and the local TIF agreements work well. TIFs are easier to use here than in North Carolina,” he says. And he also appreciates the “spectacular venues” of many old mill sites along waterfronts. In Durham, N.C., the mills and warehouses usually fronted railroad tracks.
With stronger population and income growth, North Carolina has created more demand for space than Maine, but Niemann can foresee that changing. He’s a believer in the creative economy, and says of young professionals, “Why wouldn’t you come to place where there’s so much natural beauty?” He cites demographics that show people are moving back toward urban centers, a trend that favors renovation projects.
Neither the Augusta nor the Waterville project would have been possible without passage of state tax credits to supplement existing federal credits for historic building makeovers. Maine’s program will allow it to overcome obstacles that have left historic downtown structures vacant for decades. “The numbers have to make sense for these projects to proceed,” he says. “If the public policy supports the goal, it can happen.”
Despite the current economic slump, he says Maine’s outlook is favorable as a state that saw neither the extreme highs nor lows of the real estate boom. “There will be opportunities,” he says. “You just have to have the tenacity and the wherewithal to see them through.”
Niemann has indeed fallen in love with Maine. He has an apartment in Kennebunk, but also says he expects to be house-hunting in the future. “I have a wife and four daughters, and hopefully they’ll be willing to follow me here.”
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