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January 5, 2004

Mattson moment | How do you fill an empty 300,000-square-foot building? Kevin Mattson is working on it.

By Scott Sutherland
Kevin Mattson had a couple of early Christmas presents last month. Or maybe they were birthday presents. Or both.

On Dec. 23, the day Mattson announced that his Winthrop-based company, Harper's Development, had closed on its $4.5 million purchase of the former Sanmina-SCI Corporation plant in Augusta, Gov. John Baldacci announced that Augusta had just been tapped to host a 300-employee pharmaceutical call center, to be housed in the Sanmina-SCI building. The day also marked Mattson's 35th birthday.

Maryland-based TelAc, a division of Access Worldwide Communications in Boca Raton, Fla., picked Augusta from among four finalists for the call center. Mattson said TelAc will take 15,000 sq. ft. in the building ˆ— now called the Central Maine Commerce Center ˆ— on March 1. "It needs to be operational by then, so starting Feb. 2 we're working three shifts to do the build-out, converting the manufacturing space to office space," said Mattson.

According to city officials, TelAc plans to hire 150 employees for the Augusta facility by March, with an additional 150 to be hired in coming months.

In addition to TelAc, Harper's has signed up additional tenants for the space, including the Maine Department of Public Safety (in the form of the state police), which plans to consolidate its scattered offices by moving 150 people into 45,000 sq. ft. on July 1. Also signed is Goold Health Systems Inc., currently housed in Augusta's FAME building, which will move 100 people into 25,000 sq. ft. in September.

Mattson said Harper's is finalizing several more lease deals for the Central Maine Commerce Center, including state agencies and an out-of-state wholesale pharmacy business. "We definitely see 500, 600 people in the building by the end of the year," he said. "There's a fair demand for space in the Augusta area right now. It's just a matter of the price, and we're the low-cost provider, at least for now."

Lots of space at an attractive price is one thing Mattson's building has in abundance. The structure itself covers 311,000 sq. ft. ˆ— some seven acres under one roof ˆ— and sits on 200 acres of land located about a mile from Interstate 95. For 20 years, the facility was used for electronics manufacturing by Digital Equipment Co. and Sanmina-SCI. When it closed in 2002, the plant employed more than 500 people.

Mattson believes the building is popular because of its competitive rental rates, the result of the relatively low purchase price; Harper's paid $4.5 million, less than half the city's assessed value of $9.15 million. "We could bid this out to the state police, fully built out, for $9.83 [per square foot per year]," Mattson said. "The going rate in Augusta right now is more like $18 a foot. It's something I don't think our competitors like very much, but it's only temporary. I can't think of when this much space came on the market at one time. In a year or two, those rents will be back up."

In addition to highly competitive rental rates, the building also offers 800 parking spaces, walking trails, a baseball field, and will soon include a cafeteria and a gym. The latter two are under construction and should be complete by the time the state police move in, Mattson said. The cafeteria/gym project will cost about $200,000, he said, with the complete retrofit of the building running $4 million-$8 million. About two-thirds of the building's available space will be used for offices, Mattson said, with the remaining third devoted to manufacturing.

Once the existing space has been leased and built-out, he said, Harper's will concentrate on developing new structures on the surrounding property. Early this year, Harper's will apply for permits to erect as many as 15 additional buildings on the site, ranging from 10,000 sq. ft. to 200,000 sq. ft. "We want the flexibility to build clients a building or to sell them a piece of property," Mattson said, adding that he's talking to a national lumber wholesaler about the possibility of building a 150,000-square-foot distribution center on the property. Up to two million additional square feet could be constructed in coming years, he said.

"This building sort of encapsulates what's happening in the Maine economy, as we transition from the old economy to a high-tech one," Mattson said. "The reality is that manufacturing tenants are hard to find, but what's not hard to find are businesses looking for less expensive space or for room to grow. Having the local tenants move over here is great, but what's really special is the new call center jobs coming from out of state. There's something more exciting to me about that."

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