The move is expected to save Maine’s largest health system about $1.5 million annually and reduce the need for capital investment in non-clinical settings.
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MaineHealth said this week that it plans to move its headquarters from 110 Free St. in Portland to an office building it owns at 1 Riverfront Plaza in Westbrook.
The move is expected to save Maine’s largest health system about $1.5 million annually in overhead expenses and reduce the need for capital investment in non-clinical settings over the next three to five years, according to a news release.
"The pandemic really changed the way people in administrative roles work," said Kelly Elkins, MaineHealth’s COO. "People are working from home more when it makes sense to do so. This has led to an under-utilization of our Free Street offices."
Real estate shuffle
In March, MaineHealth sold its 110 Free St. property, an 85,972-square-foot office building, to the Portland Museum of Art for $14 million. Joe Malone, Mark Malone, Luke Malone and Nick Malone of Malone Commercial Brokers brokered the transaction.
In 2017, the organization acquired the 1 Riverfront Plaza property, a six-story, 130,726-square-foot office building for $10.75 million. Charlie Craig from NAI the Dunham Group and David Ross from NAI Hunneman and Joe Malone from Malone Commercial Brokers brokered the deal.
The Westbrook property, built in 2004, has amenities such as a fitness center, an employee cafeteria, an outside patio and a pedestrian bridge connecting the site to downtown Westbrook.
$250M in savings
The sale terms for the 110 Free St. property included a two-year leaseback provision to allow time for MaineHealth to relocate its executive offices. After studying several alternatives, it was determined that the most cost-effective option would be to relocate approximately 300 care team members from its Free Street office and other administrative locations to 1 Riverfront Plaza in Westbrook.
The move is part of a larger effort by MaineHealth to better control the cost of care, the organization said. By reducing variations in how care is delivered and other initiatives, MaineHealth has found savings of $250 million over the last three years.
Additionally, leaders have been instructed to hold administrative cost growth to 0% on an absolute dollar basis in fiscal 2027.
“That means finding ways to absorb cost-of-living increases for staff and higher prices for purchased goods and services,” the organization said.
All told, that initiative is expected to save the health system $25 million in the 2027 fiscal year.
Remodeling
Currently, Riverfront Plaza, which includes a parking garage with 540 spaces, houses much of MaineHealth’s information technology department as well as clinicians and administrators with MaineHealth's behavioral health.
Elkins said that, with some modest remodeling work — including the creation of shared workspaces for those who work from home part-time — the 300 care team employees from Free Street and other administrative offices can be easily accommodated.
The move is expected to take place in early 2027.
Elkins characterized Westbrook’s downtown as “vibrant and easy to get to,” making it an attraction to employees.
“The team members who work there currently tell us they really like it,” she said.
But she emphasized that the main reason for the move is to support MaineHealth’s efforts to reduce costs and keep care affordable.
"It is incumbent on us to be good financial stewards of our not-for-profit health system," said Elkins.
