August 21, 2006
A new coastal community | After years of false starts, the former Cutler Navy base is being redeveloped for residential and commercial use
By Taylor Smith
For Dianne Tilton, the years-long struggle to offload the former Cutler Naval Computer and Telecommunications Station was a draining experience, with enough twists and turns to fill a book. As former chair of the Washington County Redevelopment Authority, the group created by the state to handle the U.S. Navy's 2000 decision to transfer ownership of the 80-acre Cutler base, Tilton was front and center during negotiations that arranged for the Navy to transfer the base to the development authority, which would then turn around and sell the property to a private developer ˆ preferably one with deep pockets and an ambitious plan to boost the local economy.
In this case, the devil was in the details. "I think that everything that could have gone wrong with that project went wrong," she says. "It's amazing that now we're actually seeing some results."
It's a refrain heard often in Cutler and other neighboring towns in Washington County these days. For some, the fact that work is even underway at the former Navy base is a feat in itself. Yet on the property this summer, a development team is busy rehabbing dozens of units of former military housing into waterfront condominiums that are being snapped up at a rate that's surprising even to those developers. The master plan includes remaking the former Navy installation into a residential community with a business park and commercial center ˆ all in a town where residents drive a half-an-hour or more to the nearest grocery store. For many along the coast of Washington County, the long-awaited work being done at the Cutler site is a sign of life in an area that for years has suffered from a virulent strain of economic depression.
Whether the developers ˆ cousins and business partners Tom Manning and Adam Meyer ˆ will be able to keep up the torrid pace remains to be seen. Housing units are selling quickly now, but what happens if buyers begin to lose interest as the months go by? And on the commercial side, a remote point in Washington County isn't the most likely site for a business park. But Manning says he's comfortable that the pair's investor-backed plans were drawn up carefully, with both feet planted firmly in reality. So he's not even a little bit worried? "I'm going to say no, because we did so much upfront research," he says. "The people that were looking at the site didn't really know what to do with it, but we really thought there was a great opportunity there."
The plan isn't groundbreaking. Renovating former military housing into waterfront condos and taking advantage of the site's institutional infrastructure to lure businesses onto the property is the kind of mixed-use development territory well trod by Maine developers in recent years. But by the time the pair had assembled a group of investors and enough cash to cover the property's $2.1 million price tag ˆ the deal closed in early April ˆ few among the local community were willing to consider yet another far-out plan to redevelop the site.
Cutler residents already had battled a proposal to locate a drug treatment facility on the site, but local officials eventually nixed the plan. After that, a California boarding school's plans to turn the Navy base into a prep-school campus fell through, leaving many in Cutler and nearby Machias and East Machias wondering if anything would eventually get built on the spit of land jutting out into Holmes Bay.
For all of Manning's confidence, questions still remain ˆ most notably being whether this team of developers can succeed where so many others have failed. After all, a previous group of developers under the name the Sunset Group came riding into town with a plan similar to the current proposal, but couldn't make a go of it. Still, just seeing that Manning and Meyer's plans have gotten off the ground is making locals optimistic. "We're glad that something's going on there, because it was sitting for quite a few years," says Cutler Selectman Kristan Porter. "It'll be good to get it back on the tax roles and get some jobs created."
First through the door
Though cousins, the pairing of Manning and Meyer is an interesting one. Manning owns a cluster of bars and clubs on the more rowdy end of Fore Street in Portland's Old Port.
Meyer, on the other hand, is president of Engineering Technologies Inc., a construction and engineering firm he and Manning started together in 2004 that specializes in environmental consulting and real estate development. The firm has offices in Bangor, Portland and Beddington, where Meyer is based.
But Manning says that after spending time during the 90s as an IT manager for Boston Properties, a Boston, Mass.-based real estate investment trust, he wanted to come back to Maine and take advantage of what he saw as opportunities in the state's real estate market. "I think the entire state of Maine has a ton of properties that need people to come in and pick them up by the bootstraps," he says. "And in Washington County, you've got to be willing to be the first guy through the door."
Rehabbing of the Cutler base's residential units, renamed Beachwood Bay Estates, was priority one for Manning and Meyer, who formed Cutler Residential Development LLC to manage the project. The 61 condo units are on the market for between $100,000 and $209,000, and Manning says more than 20 are under contract. The pair have received interest from prospective buyers in New York, New Jersey and Florida, and recently closed on a two-unit sale to a buyer from New Mexico.
But Manning and Meyer also created Cutler Commercial Development LLC to handle the other side of the project, the business center on another portion of the base. That facility landed its first tenant in late June, when Look's Gourmet Food Co., a specialty food producer in nearby Whiting, agreed to turn 12,000 sq. ft. of the base's former commissary building into a storage warehouse. "We weren't really looking to focus on the development of the commercial [part of the plan] for at least 12 months," says Manning. "We really wanted to take our time, but we all of a sudden started getting calls from people who knew the base. We're way ahead of schedule as far as our whole economic development plan for the commercial part goes."
Mike Cote, who purchased the 89-year old Look's Gourmet in 2003, says the decision to locate a warehouse on the Cutler site was easy. The property is just 1.2 miles away from the Look's Gourmet headquarters on Route 191 in Whiting. In fact, he says he had approached the base's previous owners about locating there, but to no avail. "Those deals fell through, but I kept calling," he says. "Besides a few minor modifications, it was pretty much a turnkey operation for us."
The company received a $200,000 Community Development Block Grant through the town of Cutler, and backed by the town of Whiting, to outfit and operate the warehouse. Sales at Look's according to Cote, have grown at a double-digit rate during each of the last three years, and this year are up 40%. He expects to add seven employees at the new Cutler location, which Look's will use for storage and labeling when it moves in later this month.
In addition to the commissary building, Manning says there's about 100,000 sq. ft. of potential commercial space spread out between 10 buildings, including a roughly 30,000-square-foot former administrative building that he says he'd like to turn over to a corporate call center, or perhaps use as incubator space for small businesses. "Anything we can do to spur economic development in Washington County is a priority," he says.
But a call center or business incubator may be a tall order in Washington County, a place where Dianne Tilton says most towns are too small to take on an industrial project like a business park. Likewise, the county's commercial operations are relatively few and far between, and convincing other commercial tenants to relocate to an out-of-the-way spit of land in Washington County could be a tough sell.
The value of a convenience store
Given the community's experience during the base shutdown and subsequent years of redevelopment false-starts, it's not surprising Manning says local officials have been nothing but helpful during the negotiations for the property and its buildout over the past few months. He says the investment group worked to involve the community early in the process, before they had even purchased the property. They held informal meetings with residents and Cutler town officials to gauge what locals wanted to see happen to the former Naval base, which shut down after years of employing more than 300 people as a radio communications station.
The upshot: Manning and Meyer say their plan received plenty of support from the local citizenry ˆ enough so that they continued in earnest to raise the $2.1 million to purchase the site from Sunset Group LLC, an investment group that purchased the base from the Washington County Redevelopment Authority for $400,000 in early 2004. The contract stipulated that if the Sunset Group created 130 jobs in three years, the development authority would knock $100,000 off the price tag. "But Sunset LLC didn't feel like they were able to develop the base themselves," says Dianne Tilton. "It was a huge liability that nobody wanted anything to do with."
The "huge" liabilities Tilton talks about didn't seem insurmountable to the buyers. That's likely because ETI, Manning and Meyer's company, handled the site assessment for the California boarding school that was in negotiations with Sunset Group LLC to purchase the property. That deal fell through, but Meyer says he saw promise in the site. Sure, a new owner would have to build a new sewer system for the site, which dumped much of its treated waste into Holmes Bay during the Navy's tenure in Cutler, and new wells would have to be drilled to make up for a woefully inadequate public water supply. "But I was interested in doing it, and it made sense from an investment point of view," says Meyer.
While Manning says Cutler officials and residents applauded plans for housing, they were especially enthused by potential commercial development at the site. Even simple components of commercial development ˆ a convenience store or grocery ˆ garnered excitement among locals. "When we were meeting with the selectmen, their comment was, 'Jeez, we have to drive 30 minutes to get a gallon of milk or to get gas,'" says Manning. "So that would be a win-win for everybody."
There's movement on that front, says Eddie Dugay, a Democratic state representative from Cherryfield who will end his four-term run in the Maine Legislature this fall due to term limits. Dugay is handling on-site sales for the Manning and Meyer's commercial and residential properties, and says that representatives from Associated Grocers of Maine, a Gardiner-based food distributor for grocery stores in Maine, Massachusetts, New Hampshire and Vermont, are eyeing a spot in the commercial development. (A spokesperson for Associated Grocers confirmed that the company's president and CEO, Patrick Flannery, has visited the site.)
There are always the economic intangibles that threaten to derail even the most well-suited development plans. The investment team plans on pumping more than $3 million ˆ over and above the $2.1 million combined purchase price ˆ into the commercial and residential projects. Everyone involved, from Manning on down to the unnamed investors, are expecting a return on their investment dollars. And while the residential sales are, by all appearances, humming along, questions remain about whether the commercial side will garner a similar level of interest.
That said, most in the area are just happy to see that Manning and Meyer have gotten the project off the ground. "If I had told the town of Cutler that those housing units would be fetching over $100,000 apiece and people would be buying them like candy, they'd be laughing at me," says Tilton. "So much has changed in the last five years."
In this case, the devil was in the details. "I think that everything that could have gone wrong with that project went wrong," she says. "It's amazing that now we're actually seeing some results."
It's a refrain heard often in Cutler and other neighboring towns in Washington County these days. For some, the fact that work is even underway at the former Navy base is a feat in itself. Yet on the property this summer, a development team is busy rehabbing dozens of units of former military housing into waterfront condominiums that are being snapped up at a rate that's surprising even to those developers. The master plan includes remaking the former Navy installation into a residential community with a business park and commercial center ˆ all in a town where residents drive a half-an-hour or more to the nearest grocery store. For many along the coast of Washington County, the long-awaited work being done at the Cutler site is a sign of life in an area that for years has suffered from a virulent strain of economic depression.
Whether the developers ˆ cousins and business partners Tom Manning and Adam Meyer ˆ will be able to keep up the torrid pace remains to be seen. Housing units are selling quickly now, but what happens if buyers begin to lose interest as the months go by? And on the commercial side, a remote point in Washington County isn't the most likely site for a business park. But Manning says he's comfortable that the pair's investor-backed plans were drawn up carefully, with both feet planted firmly in reality. So he's not even a little bit worried? "I'm going to say no, because we did so much upfront research," he says. "The people that were looking at the site didn't really know what to do with it, but we really thought there was a great opportunity there."
The plan isn't groundbreaking. Renovating former military housing into waterfront condos and taking advantage of the site's institutional infrastructure to lure businesses onto the property is the kind of mixed-use development territory well trod by Maine developers in recent years. But by the time the pair had assembled a group of investors and enough cash to cover the property's $2.1 million price tag ˆ the deal closed in early April ˆ few among the local community were willing to consider yet another far-out plan to redevelop the site.
Cutler residents already had battled a proposal to locate a drug treatment facility on the site, but local officials eventually nixed the plan. After that, a California boarding school's plans to turn the Navy base into a prep-school campus fell through, leaving many in Cutler and nearby Machias and East Machias wondering if anything would eventually get built on the spit of land jutting out into Holmes Bay.
For all of Manning's confidence, questions still remain ˆ most notably being whether this team of developers can succeed where so many others have failed. After all, a previous group of developers under the name the Sunset Group came riding into town with a plan similar to the current proposal, but couldn't make a go of it. Still, just seeing that Manning and Meyer's plans have gotten off the ground is making locals optimistic. "We're glad that something's going on there, because it was sitting for quite a few years," says Cutler Selectman Kristan Porter. "It'll be good to get it back on the tax roles and get some jobs created."
First through the door
Though cousins, the pairing of Manning and Meyer is an interesting one. Manning owns a cluster of bars and clubs on the more rowdy end of Fore Street in Portland's Old Port.
Meyer, on the other hand, is president of Engineering Technologies Inc., a construction and engineering firm he and Manning started together in 2004 that specializes in environmental consulting and real estate development. The firm has offices in Bangor, Portland and Beddington, where Meyer is based.
But Manning says that after spending time during the 90s as an IT manager for Boston Properties, a Boston, Mass.-based real estate investment trust, he wanted to come back to Maine and take advantage of what he saw as opportunities in the state's real estate market. "I think the entire state of Maine has a ton of properties that need people to come in and pick them up by the bootstraps," he says. "And in Washington County, you've got to be willing to be the first guy through the door."
Rehabbing of the Cutler base's residential units, renamed Beachwood Bay Estates, was priority one for Manning and Meyer, who formed Cutler Residential Development LLC to manage the project. The 61 condo units are on the market for between $100,000 and $209,000, and Manning says more than 20 are under contract. The pair have received interest from prospective buyers in New York, New Jersey and Florida, and recently closed on a two-unit sale to a buyer from New Mexico.
But Manning and Meyer also created Cutler Commercial Development LLC to handle the other side of the project, the business center on another portion of the base. That facility landed its first tenant in late June, when Look's Gourmet Food Co., a specialty food producer in nearby Whiting, agreed to turn 12,000 sq. ft. of the base's former commissary building into a storage warehouse. "We weren't really looking to focus on the development of the commercial [part of the plan] for at least 12 months," says Manning. "We really wanted to take our time, but we all of a sudden started getting calls from people who knew the base. We're way ahead of schedule as far as our whole economic development plan for the commercial part goes."
Mike Cote, who purchased the 89-year old Look's Gourmet in 2003, says the decision to locate a warehouse on the Cutler site was easy. The property is just 1.2 miles away from the Look's Gourmet headquarters on Route 191 in Whiting. In fact, he says he had approached the base's previous owners about locating there, but to no avail. "Those deals fell through, but I kept calling," he says. "Besides a few minor modifications, it was pretty much a turnkey operation for us."
The company received a $200,000 Community Development Block Grant through the town of Cutler, and backed by the town of Whiting, to outfit and operate the warehouse. Sales at Look's according to Cote, have grown at a double-digit rate during each of the last three years, and this year are up 40%. He expects to add seven employees at the new Cutler location, which Look's will use for storage and labeling when it moves in later this month.
In addition to the commissary building, Manning says there's about 100,000 sq. ft. of potential commercial space spread out between 10 buildings, including a roughly 30,000-square-foot former administrative building that he says he'd like to turn over to a corporate call center, or perhaps use as incubator space for small businesses. "Anything we can do to spur economic development in Washington County is a priority," he says.
But a call center or business incubator may be a tall order in Washington County, a place where Dianne Tilton says most towns are too small to take on an industrial project like a business park. Likewise, the county's commercial operations are relatively few and far between, and convincing other commercial tenants to relocate to an out-of-the-way spit of land in Washington County could be a tough sell.
The value of a convenience store
Given the community's experience during the base shutdown and subsequent years of redevelopment false-starts, it's not surprising Manning says local officials have been nothing but helpful during the negotiations for the property and its buildout over the past few months. He says the investment group worked to involve the community early in the process, before they had even purchased the property. They held informal meetings with residents and Cutler town officials to gauge what locals wanted to see happen to the former Naval base, which shut down after years of employing more than 300 people as a radio communications station.
The upshot: Manning and Meyer say their plan received plenty of support from the local citizenry ˆ enough so that they continued in earnest to raise the $2.1 million to purchase the site from Sunset Group LLC, an investment group that purchased the base from the Washington County Redevelopment Authority for $400,000 in early 2004. The contract stipulated that if the Sunset Group created 130 jobs in three years, the development authority would knock $100,000 off the price tag. "But Sunset LLC didn't feel like they were able to develop the base themselves," says Dianne Tilton. "It was a huge liability that nobody wanted anything to do with."
The "huge" liabilities Tilton talks about didn't seem insurmountable to the buyers. That's likely because ETI, Manning and Meyer's company, handled the site assessment for the California boarding school that was in negotiations with Sunset Group LLC to purchase the property. That deal fell through, but Meyer says he saw promise in the site. Sure, a new owner would have to build a new sewer system for the site, which dumped much of its treated waste into Holmes Bay during the Navy's tenure in Cutler, and new wells would have to be drilled to make up for a woefully inadequate public water supply. "But I was interested in doing it, and it made sense from an investment point of view," says Meyer.
While Manning says Cutler officials and residents applauded plans for housing, they were especially enthused by potential commercial development at the site. Even simple components of commercial development ˆ a convenience store or grocery ˆ garnered excitement among locals. "When we were meeting with the selectmen, their comment was, 'Jeez, we have to drive 30 minutes to get a gallon of milk or to get gas,'" says Manning. "So that would be a win-win for everybody."
There's movement on that front, says Eddie Dugay, a Democratic state representative from Cherryfield who will end his four-term run in the Maine Legislature this fall due to term limits. Dugay is handling on-site sales for the Manning and Meyer's commercial and residential properties, and says that representatives from Associated Grocers of Maine, a Gardiner-based food distributor for grocery stores in Maine, Massachusetts, New Hampshire and Vermont, are eyeing a spot in the commercial development. (A spokesperson for Associated Grocers confirmed that the company's president and CEO, Patrick Flannery, has visited the site.)
There are always the economic intangibles that threaten to derail even the most well-suited development plans. The investment team plans on pumping more than $3 million ˆ over and above the $2.1 million combined purchase price ˆ into the commercial and residential projects. Everyone involved, from Manning on down to the unnamed investors, are expecting a return on their investment dollars. And while the residential sales are, by all appearances, humming along, questions remain about whether the commercial side will garner a similar level of interest.
That said, most in the area are just happy to see that Manning and Meyer have gotten the project off the ground. "If I had told the town of Cutler that those housing units would be fetching over $100,000 apiece and people would be buying them like candy, they'd be laughing at me," says Tilton. "So much has changed in the last five years."
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