July 25, 2005
A package deal | Brett Cohen on his firm's acquisition of $50 million of MBNA real estate in Maine
By Michaela Cavallaro
Brett Cohen's latest deal has raised eyebrows across Maine. As vice president of Maine Investment Properties LLC, Cohen is leading his firm's acquisition of $50 million worth of MBNA property in the midcoast region. Observers wonder what the Baltimore-based firm has in store for high-profile properties such as the Knox Mill in Camden and the credit card company's harbor-front complex in Rockland.
Cohen, a Maine native whose father, Donald Cohen, was a Bangor developer, understands the concern about the properties' fate. "We understand the magnitude of the deal, and we understand the impact it's going to have on the economy," he says. "I realize this isn't a kind of deal that happens every day there. Even in Baltimore, this is a big deal; it made the newspaper here."
Cohen is managing the deal for his father-in-law, Walter J. Skayhan III, a Baltimore developer who has worked on residential and commercial projects through his firm WJS&A; about a third of Skayhan's work is with what the Baltimore City Paper called the "drug-treatment economy" in the city, such as methadone clinics. Skayhan's partners in Maine Investment Properties are Richard Pineau, a Baltimore roofer, and Stephen Geppi, CEO of Timonium, Md.-based Diamond Comic Distributors. According to Cohen, the three men formed Maine Investment Properties to "keep the lines clean" between their various projects.
Mainebiz recently spoke with Cohen about how the deal came together and what the group plans to do with the real estate. (He declined to disclose how much MIP is paying for the properties, though he said the deal is expected to close at the end of the summer.) An edited transcript of that conversation follows.
Mainebiz: How did you end up interested in this property?
Cohen: We purchased a piece of property from MBNA on the Chesapeake Bay [early this year], and during that time we became aware of their holdings up in Maine. Around that time, I'm not sure MBNA had completely formulated their strategy of what they wanted to sell off and what they wanted to keep, so we started discussions with them about being interested in the properties from Maine. I was pretty familiar with the area, [so] we had sort of an inside track on the viability of residential or commercial or retail propositions up there.
We started discussions with MBNA a few months back, and the more that we toured the properties and viewed the properties, the more we were impressed with the way they were built and the way they were maintained, and that led to where we are now.
We acquired a substantial [piece], if not the majority, of their holdings in the midcoast area.
Why were the properties attractive to you?
We feel confident in the midcoast economy. I think there's a lot of growth in the area and that the mix that we were contemplating between residential, commercial and retail use seems to fit pretty well with the location of the properties and the nature of the properties.
Was there a particular facility that was more interesting than others?
We were looking at it as a package. As we find out more and more information on the market, the properties themselves [and] the history, they are changing positions in our eyes as far as which ones are the shining stars.
What's the shining star at the moment?
Right now I can't say there is one; each of them have their own qualities. In Rockland, you've got this [property with] amazing waterfront presence with a lot of waterfront development opportunity. In Camden, you have a historic mill complex built around these beautiful waterfalls very close to the harbor, and the residential play there is very promising for residential condos. There's also the potential for commercial space there and obviously for first-floor retail.
Point Lookout [a corporate retreat in Northport] is such an amazing property. If there is a shining star from the perspective of a breathtaking property, the investment in the infrastructure and the buildout of Point Lookout is spectacular. There's very few properties that I've seen around the country that rival it as far as the investment in the infrastructure and the views from the top of the mountain.
That property seems like it would require a specific use; what are you thinking about that?
We're talking to a couple of private parties about them taking it on as a user. It's ideal for use as a private conference center or a hospitality play. But we're also pursuing potential development of it. There's not a lot of excess land to develop there, so what you have built there is what you have to deal with. There are ways to split it up and sell off interests as a kind of resort concept. I think both development as a resort play and selling it off to a private user ˆ of course, depending on the private user ˆ [would be] beneficial to the area.
One possibility that's been mentioned for the Knox Mill is a college of pharmacology. Is there anything else you're considering?
The school of pharmacology is something we aren't considering doing ourselves. There's a party interested in doing that and we would be flipping the property to them. We think it's a great use for the property and a great use for the town, so we're fully behind it. But whether or not the economics of that work are completely up to the people who are doing that project. It's not something we really have control of.
We're also considering developing it ourselves residentially, leaving the first floor retail in place. We think it's important for the town to have that first floor retail. And there's currently office space [in the building], so the easiest thing to do would be to keep it as office space. We're just not as confident in the office market for that property as we are in the residential market for it.
MBNA didn't seem to get a lot of office tenants in that space.
I think they started filling spaces as people came to them, and they were only half interested in filling those spaces. And for good reason: to sign up long-term leases when you're contemplating selling a property is, in any situation, a bad idea, because you're basically covering the property for the people who are buying it from you.
Do you think you'll end up working with Rob Draper, the cinematographer who's opening a production studio in Camden?
We think Rob's got a great idea, and we think it could be a great draw for Camden. From who we've talked to, we feel like the town is behind it. But again, as with school of pharmacology, which is related because we're talking about keeping Rob Draper in there as part of this learning campus, we have no control over his business plan. We have no control over the economics of how his deal would work. That's completely up to him and his business people. So as far as how it would fit into our plans to sell or develop the property, that remains to be seen.
Cohen, a Maine native whose father, Donald Cohen, was a Bangor developer, understands the concern about the properties' fate. "We understand the magnitude of the deal, and we understand the impact it's going to have on the economy," he says. "I realize this isn't a kind of deal that happens every day there. Even in Baltimore, this is a big deal; it made the newspaper here."
Cohen is managing the deal for his father-in-law, Walter J. Skayhan III, a Baltimore developer who has worked on residential and commercial projects through his firm WJS&A; about a third of Skayhan's work is with what the Baltimore City Paper called the "drug-treatment economy" in the city, such as methadone clinics. Skayhan's partners in Maine Investment Properties are Richard Pineau, a Baltimore roofer, and Stephen Geppi, CEO of Timonium, Md.-based Diamond Comic Distributors. According to Cohen, the three men formed Maine Investment Properties to "keep the lines clean" between their various projects.
Mainebiz recently spoke with Cohen about how the deal came together and what the group plans to do with the real estate. (He declined to disclose how much MIP is paying for the properties, though he said the deal is expected to close at the end of the summer.) An edited transcript of that conversation follows.
Mainebiz: How did you end up interested in this property?
Cohen: We purchased a piece of property from MBNA on the Chesapeake Bay [early this year], and during that time we became aware of their holdings up in Maine. Around that time, I'm not sure MBNA had completely formulated their strategy of what they wanted to sell off and what they wanted to keep, so we started discussions with them about being interested in the properties from Maine. I was pretty familiar with the area, [so] we had sort of an inside track on the viability of residential or commercial or retail propositions up there.
We started discussions with MBNA a few months back, and the more that we toured the properties and viewed the properties, the more we were impressed with the way they were built and the way they were maintained, and that led to where we are now.
We acquired a substantial [piece], if not the majority, of their holdings in the midcoast area.
Why were the properties attractive to you?
We feel confident in the midcoast economy. I think there's a lot of growth in the area and that the mix that we were contemplating between residential, commercial and retail use seems to fit pretty well with the location of the properties and the nature of the properties.
Was there a particular facility that was more interesting than others?
We were looking at it as a package. As we find out more and more information on the market, the properties themselves [and] the history, they are changing positions in our eyes as far as which ones are the shining stars.
What's the shining star at the moment?
Right now I can't say there is one; each of them have their own qualities. In Rockland, you've got this [property with] amazing waterfront presence with a lot of waterfront development opportunity. In Camden, you have a historic mill complex built around these beautiful waterfalls very close to the harbor, and the residential play there is very promising for residential condos. There's also the potential for commercial space there and obviously for first-floor retail.
Point Lookout [a corporate retreat in Northport] is such an amazing property. If there is a shining star from the perspective of a breathtaking property, the investment in the infrastructure and the buildout of Point Lookout is spectacular. There's very few properties that I've seen around the country that rival it as far as the investment in the infrastructure and the views from the top of the mountain.
That property seems like it would require a specific use; what are you thinking about that?
We're talking to a couple of private parties about them taking it on as a user. It's ideal for use as a private conference center or a hospitality play. But we're also pursuing potential development of it. There's not a lot of excess land to develop there, so what you have built there is what you have to deal with. There are ways to split it up and sell off interests as a kind of resort concept. I think both development as a resort play and selling it off to a private user ˆ of course, depending on the private user ˆ [would be] beneficial to the area.
One possibility that's been mentioned for the Knox Mill is a college of pharmacology. Is there anything else you're considering?
The school of pharmacology is something we aren't considering doing ourselves. There's a party interested in doing that and we would be flipping the property to them. We think it's a great use for the property and a great use for the town, so we're fully behind it. But whether or not the economics of that work are completely up to the people who are doing that project. It's not something we really have control of.
We're also considering developing it ourselves residentially, leaving the first floor retail in place. We think it's important for the town to have that first floor retail. And there's currently office space [in the building], so the easiest thing to do would be to keep it as office space. We're just not as confident in the office market for that property as we are in the residential market for it.
MBNA didn't seem to get a lot of office tenants in that space.
I think they started filling spaces as people came to them, and they were only half interested in filling those spaces. And for good reason: to sign up long-term leases when you're contemplating selling a property is, in any situation, a bad idea, because you're basically covering the property for the people who are buying it from you.
Do you think you'll end up working with Rob Draper, the cinematographer who's opening a production studio in Camden?
We think Rob's got a great idea, and we think it could be a great draw for Camden. From who we've talked to, we feel like the town is behind it. But again, as with school of pharmacology, which is related because we're talking about keeping Rob Draper in there as part of this learning campus, we have no control over his business plan. We have no control over the economics of how his deal would work. That's completely up to him and his business people. So as far as how it would fit into our plans to sell or develop the property, that remains to be seen.
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