🔒Motel that provided housing for diner employees is on the market

For employers in Maine’s hospitality and tourism industry, finding affordable housing for employees is an endemic problem. Some are building or buying properties specifically to serve employees.

That was the case in 2022, when the owners of the landmark Maine Diner, at 2265 Post Road in Wells, bought the 27-key Coast Village Inn and Cottages, about two miles down the road at 876 Post Road in Wells.

The idea was to use almost half the motel rooms to provide affordable rents for their diner employees, and maintain motel operations in the other half to offset debt service on the loan used to buy the property.

The model didn’t work.

“We weren’t motel people,” Jim MacNeill, who owns both businesses with his wife Karen, told Mainebiz.

A couple of months ago, the MacNeills learned their lender was foreclosing on the motel. They listed it with Daigle Commercial Group for $2.395 million and hosted over a dozen viewings, but no offers.

About a month ago, they learned the motel was due to go on the auction block on Feb. 24. But they’re still hoping to find a buyer on the open market.

“Since there is still hope and a short window, the property can be sold on the open market before the auction, the owners would love the opportunity to sell their property to new owners and support their efforts, as they wish to help the new owners with the orientation process and provide feedback that will assist in a successful transition,” said Stanley Rintz, their listing broker.

He added. “This positive transition would not be able to happen if it went to auction, as the owners are forced to simply walk away.”

Landmark diner

Founded in 1960, the Maine Diner is a Route 1 landmark that has even been featured on Food Network’s “Diners, Drive-Ins and Dives.”

Jim MacNeill started out as the diner’s manager nearly 30 years ago. The couple bought it in 2018. The diner and an adjacent gift shop are also for sale for $3.395 million. Rintz is handling that listing as well.

“It’s a brand more than just a restaurant,” he said.

When a buyer comes along, he’d like to work with them on realizing his vision for the diner’s growth, including getting the brand’s foods into grocery stores.

The listing has received one offer, which is in negotiation, he said.

“We hope to sell before the season starts,” he said. “I’m ready to play golf.”

Employee housing

The motel acquisition came about due “to the extremely difficult staff housing circumstances for this area,” said Rintz.

The dual purpose was to operate the motel — with a main house, rooms and cottages — for daily tourism rentals, as well as to house several of their local staff and H2B/J1 visa seasonal employees for the diner, which employs up to 70 staff members during the busy late spring, summer and early fall season.

The couple made several capital improvements into the motel since the acquisition.

But due to their inexperience of motel revenue generation through the seasonal daily rentals to tourist, and the greater than expected need for staff housing, revenues from that property “were significantly hindered and underperformed during their years of operation,” Rintz said.

The listing has received “strong recent showings and interest,” he said.

Rintz said the lender would place the auction on hold if the property goes under contract with an acceptable offer.

He added, “I think there is deep connection to other hospitality owners from the past and present who will identify with the emotional attachment, not to just the property that they put their heart and soul into, but also the relationships they build with staff, both local employees and the season help from other countries who come here to work through J1 and H2B visas.: