A neighborhood in transition | Spurred by plans for a new cruise ship terminal, interest in Portland's India Street corridor is on the rise

At the edge of Portland's eastern peninsula is a neighborhood known as Munjoy Hill. This section of town starts at India Street, an urban few blocks complete with a coffee shop, a salon, an Italian grocery store, a tavern and a halfway house for substance abusers. Around the corner on Newbury Street is a boarded-up house that was once a part of the Underground Railroad. A chain link fence protects the historic site, and the overgrown grass that surrounds it is littered with cigarette butts and beer cans.

On a sunny afternoon, the neighborhood's sidewalks are bustling. An elderly woman carries a plastic shopping bag filled with groceries. A man and his young son stroll hand in hand. And cyclists ride in droves toward a quiet pathway along the waterfront.

Whether it's the draw of the water or the neighborhood's eclectic feel, the base of Munjoy Hill has been getting a lot of attention lately. The buzz began in December 2001 when the lease expired on Bath Iron Works' ship repair facility. The city announced plans to use the vacated site as an international cruise ship and ferry terminal, a $12 million project known as Ocean Gateway. (See "Time after time," p. 28.) The news spurred developer interest in the area and, since then, India Street and the blocks that surround it have been slated for redevelopment. If building permits are approved, the neighborhood could see changes as soon as this summer. Possible additions to the area include luxury hotels, condominiums and townhouses, retail space and a 750-car parking garage. (Profiles and renderings of three of these projects follow.)

Andy Hyland, owner of Port City Architecture, purchased his Newbury Street office for $150,000 six years ago. The 3,500-square-foot office has water views, but at the time, the view was obstructed by Bath Iron Works' unsightly dry dock. "The dock put a lot of people off to the area," he recalls, "but there was talk that it would go away." When the rumors proved true, regard for the neighborhood quickly changed and Hyland watched property values rise. According to Hyland, office space like his could sell for $400,000 today. "I should have bought more property when it was cheap," he says.

The new development that's coming to Munjoy Hill is strictly high-end. Some wonder if the demand for well-appointed condominiums and town homes is present in a city where affordable housing is hard to find. City councilor and area realtor Will Gorham agrees. "I'm not sure we need so many upscale properties," he says. "Is there a market out there? Only time will tell."

Riverwalk
Developer: Riverwalk LLC, Portland
Project: 50-room hotel; 70 condominiums; 750-car parking garage
Location: Hotel/condos: Blocks bounded by India, Fore and Hancock streets; Garage: Western portion of Shipyard Brewery lot at Fore, Hancock and Middle streets
Cost: $75 million
Timeline: Construction to start this fall; completion scheduled for spring 2007

Drew Swenson of Riverwalk LLC has conducted market studies to ensure there's a healthy demand for the boutique hotel his company plans to build. And while recent news reports question the need for more hotels in a city that's known as a seasonal destination, Swenson is confident his 50-room hotel will be the first of its kind in Portland. "Hotels come in many shapes and sizes," he says. "Each competes in its own segment of the market. Our small hotel will have different clientele than the Holiday Inn, for example. We're not in direct competition with anyone."

The company also is developing 70 condominiums and a 750-car parking garage, awarded by the city after public bidding in 2004, that will accommodate passengers from the Ocean Gateway terminal.

Since the formation of Riverwalk LLC in 2003, Swenson and his business partner, Shipyard President Fred Forsley, have experienced their share of challenges. Originally slated to hold 1,100 cars, the parking garage required additional space behind two longtime neighborhood businesses, the Breakaway Tavern and Miccuci's Grocery. The owner of the Breakaway opted to sell, but Miccuci's decided to remain, causing Forsley and Swenson's garage to lose 350 spaces.

Despite the change in plans, the Riverwalk team has given the grocery store's owners the option to change their mind as the project evolves. "It's difficult to move a long-established business," Swenson says. "I understand that changes can be detrimental. For now, we've agreed to move forward and be good neighbors."

Bruce Miccuci, president of Miccuci's, says he seriously considered moving, but found it difficult to sell the establishment where his family business has thrived for more 40 years. "Without the store, we'd still have a healthy wholesale business, but it's not about money," he says. "There's history and memories in that building. The Riverwalk project is great for the city and great for the area, but it's better for us to stay where we are."

Riverwalk also has spent time with Portland's Community Development Committee and other neighborhood groups to address concerns about the project, which revolve around the traffic that new neighbors and tourists would bring to the area. According to a report by Gray-based Gorrill-Palmer Consulting Engineers, which was hired by the CDC to conduct a traffic analysis for the eastern peninsula, current street systems pose the biggest challenge to keeping traffic flow out of Munjoy Hill's residential neighborhoods. Gorrill-Palmer President Tom Gorrill declined to discuss how improvements would be executed.

To keep traffic to a minimum, Riverwalk has incorporated pedestrian-friendly retail space into its game plan. "We want to be the first large development downtown where a car isn't needed," says Swenson. Possibilities for the space include a high-end restaurant, a day spa and a bank branch. The company plans to have tenants lined up by November.

Prospective buyers for Riverwalk's 1,200-2,000-square-foot condominiums, which will start at $500,000, include upscale empty nesters from both in and out of state. "We hope to attract people who are searching for a vibrant urban center with access to everything," Swenson says.

Swenson and Forsley hope to finish construction in time for the spring 2007 cruise ship season. When asked if the Ocean Gateway terminal will be completed in conjunction with his company's garage project, Swenson responds, "The city and the state have been working together to make sure delays don't occur. These things can't be done too quickly if you want them done well."

Westin Hotel and condominums
Developer: Liberty Companies, South Portland
Project: 150-plus-room Westin Hotel; 100 condominiums
Location: Former Jordan's Meats site, blocks bounded by Franklin Arterial, Middle, India and Fore streets
Cost: $100 million
Timeline: Construction to start this fall; slated for completion in early 2007

South Portland-based Liberty Companies also plans to build a hotel, in this case a Westin Hotel, and condominiums targeted towards high-end customers. The company has partnered with the Procaccianti Group of Cranston, R.I., a privately owned real estate firm that manages, designs and builds full-service hotels like the Westin. The $100 million project is being led by Liberty's vice president of development, Andrew Bedard, and is due to begin this month. According to Bedard, his company is not concerned with the similarities between the two projects. "We'll complement each other," he says. "The more people we can attract to the area, the better."

The two-acre Jordan's Meats site will incorporate two buildings ˆ— a 150-plus-room Westin Hotel and up to 100 private residences. While scaled down in size from big city models, the Westin will offer a restaurant and retail space, a ballroom, indoor recreation and a parking garage.

While he looks forward to the changes to his neighborhood, Bruce Miccuci says he's concerned that visitors could affect his regular customer base. "I hope it doesn't get too touristy," he says. "We get a lot of weekly shoppers, as well as business from local restaurants, and tourist traffic could be really tough on them."

Liberty Companies is confident that there will be a healthy demand for the hotel, as well as the condominiums. According to Bedard, the company is conducting market studies to determine the cost and square footage of the residences. "It's too premature to say what the numbers will be," he says, "but we plan to offer condos in various sizes."

The company is hopeful that new construction will generate jobs and increase sales throughout Portland. "Our site is a first step over Franklin Arterial. We're sure it will create a lot of foot traffic," Bedard says.

Federal Street townhouses
Developer: Homestar Group, Chicago, Ill.
Project: Seven townhouse units
Location: 44 Federal St.
Cost: $4 million
Timeline: Construction to start in June; completion scheduled for January 2006

In addition to the larger development plans, a third project is taking shape on Federal Street (just above the Village Café), where Chicago developer Ron Gan is preparing to build seven townhouses. Gan, who first came to Portland three years ago for a weekend trip, says he had an instant affinity for the area. "The Eastside is reminiscent of many neighborhoods I had developed in Chicago," he says. "It's a great location." (Gan plans to relocate to Portland in the year ahead.)

The $4 million project is modest in comparison to those planned by Riverwalk and the Liberty Companies. "I have a vision that's completely opposite from everyone else's," Gan says. While the developer sees potential in the area, he doesn't think the city needs any more condominiums, hotels or parking garages. According to Gan, Portland can be misleading to real estate people. "It has a great urban feel, but it's very much a small town," he says. "There are only about 60,000 people in this city and a lot of developers just aren't recognizing that."

Gan's townhouses will be priced at approximately $500,000 per unit and each will provide 2,700 sq. ft. of living space. For potential buyers, the builder is counting on second homeowners, retirees and empty nesters from larger cities, as well as Peak's Island residents looking for an in-town location. When asked what makes his townhouses different from others in the area, he responds, "Others are selling 1,500 sq. ft. for the same price. I think we've got a wider market. I hope to God we can sell them."

Andy Hyland of Port City Architecture is responsible for the design. Hyland likens the architecture to brick row houses of old with contemporary interpretations. The townhouses will include a backyard, decks with water views and be within walking distance to East End shops and restaurants.

With large development projects in the works, other East End businesses are considering their options. John Reali, CEO of the Village Café on Newbury Street, says the window of opportunity was hard to ignore. The building was placed on the market in February. Since then, the café, which is still open for business, has generated interest but offers on the property have yet to be made. Reali remains optimistic that the redevelopment of lower Munjoy Hill will draw more business. "The changes here are long overdue," he says. "I think they'll be good for the city and good for business. I'm excited about it."