New blood | A father-and-son team invests in Water Street buildings to revive the downtown
Photo/Amber Waterman
Tobias Parkhurst, left, and his father, Richard, plan to add residential and restaurant space to a trio of properties in Augusta's heart
When Tobias Parkhurst, nearing 30 and retiring from professional skateboarding, decided to move back to Augusta from Massachusetts, he went looking for a nice downtown apartment. He couldn’t find one, anywhere.
So he became an urban pioneer. Encouraged by his father, Richard Parkhurst — principal of the glass firm Oakes & Parkhurst of Manchester — he bought 185 Water St. for $164,000, and now lives on the third floor.
His first winter in town, he got a notice from the Augusta Parking District that he would have to move his car for overnight snow removal. But since his property included one designated parking space, he wondered where he was supposed to move it.
“When I asked them about it, they were stunned,” he says. “They said, ‘You live downtown?’ They couldn’t believe it.”
Like streets in many of Maine’s downtowns, Water Street was largely emptied of residents during the 1950s and ’60s, as families with young children pushed into suburbs and rural towns beyond city limits. The department stores that had long anchored retailing also closed, and while offices and smaller retailers have filled some of the space, many buildings have numerous vacancies.
In the most recent economic downturn, Lamey-Wellehan shoes, a stalwart downtown fixture, moved to Western Avenue, and Nicholson & Ryan jewelers, located on Water Street for more than a century, closed. Numerous buildings have vacancies on the first floors as well as the upper stories.
The Parkhursts see this as an opportunity.
Tobias recently bought 204 Water, across the street from his first property, and is gutting and renovating it. The 12-foot ceilings and spectacular views of the Kennebec River are reminiscent of the qualities that led to downtown revivals in nearby Hallowell, Biddeford-Saco and other river communities. When the renovations are done, he plans to live on the top floor.
The younger Parkhurst now serves on the parking district board, which recently agreed to offer half-price permits to encourage other such developments. “There’s plenty of parking. That’s not a problem,” he says.
Richard Parkhurst has just purchased a much larger building at 228 Water St., once home to Chernowsky’s department store and most recently leased by Pavlov’s Music before Kennebec Savings foreclosed.
He paid $85,000 for the building, which represents a small fraction of the renovation costs for a project that includes a restaurant on the 3,600-square-foot first floor, and at least 10 market-rate, upscale apartments on the upper floors.
Unlike many downtown developers for whom housing is an afterthought, the elder Parkhurst is willing to provide two years of free rent for the restaurant in exchange for upfront financing of renovations and equipment. And he thinks he’ll have offers, probably from restaurateurs who have thrived in other downtown locations, he says. Son Tobias is also hoping for a restaurant in his smaller first-floor space of about 1,500 square feet.
“We need at least three or four restaurants down here,” Richard Parkhurst says. “Then it becomes a destination for people on Friday and Saturday nights.”
But he’s even more insistent about the apartments. “This needs to become a neighborhood again,” he says. “With 100 units and 300 people down here, downtown will come back to life.”
Making it work
The whole project became more feasible in early December when the city installed a propane gas tank on Commercial Street, the back side of Water Street. “You can’t open a restaurant without gas,” Richard Parkhurst says. “That was a stumbling block.”
He credits former Augusta Mayor Roger Katz and city staff with making the propane available. Unused money in a downtown TIF account covered most of the $200,000 cost of installing the tank and running lines to the buildings. “It took awhile, but we got there,” he says. “Now we’re ready to go.” The Parkhursts plan to use propane for heating and cooling their buildings as well. “For downtowns, it’s the fuel of choice,” Richard says, because of the lower costs and ease of fueling individual HVAC units.
Katz, who resigned as mayor after being elected to the state Senate seat long held by former Senate President Libby Mitchell, is excited by the Parkhursts’ plans and the new dimension they open for downtown.
He finds especially imaginative Richard Parkhurst’s idea of “giving away the first-floor space to spur the rest of the development.”
It may be unconventional, but Richard Parkhurst says the free first-floor space is all about making the numbers work. Part of that calculation is a low purchase price, which he got through the bank foreclosure. Tobias Parkhurst paid $50,000 for 204 Water St. for a building assessed at $120,000. A Portland developer who had acquired the building in a package with a parking lot in Portland was willing to part with it “because he liked what we were going to do with it,” he says.
Another downtown building owner with a statewide track record, Kevin Mattson, says the Parkhursts’ plans can work. “The demand is there. The biggest problem is financing the package up front. Once it’s up and running, it’s really no problem getting tenants.”
Mattson’s company owned the eight-story KeyBank building that once served as the bank’s Maine headquarters from 2002-2004, and he still owns the former Peachy Building on the south end of Water Street, next to an old train station site. Mattson says the Peachy Building has had a “remarkably stable” tenant base since renovations were completed nine years ago. It has retail and medical tenants on the first floor and offices on the other three.
Most mixed-use redevelopment projects use offices as second-floor buffers between relatively noisy night-time businesses like restaurants and living spaces above. “Of course it depends on whether it’s a white linen, sit-down place or a pub,” Mattson says.
One possible impediment to finding apartment dwellers is the atmosphere. “Some people see downtowns as a place where kids hang out and cause trouble,” he says. “[Developers] may have to overcome that.”
Future prospects
Tobias Parkhurst is impatient with such lingering impressions of Water Street. “I’ve had people ask me when Sears is coming back,” he says. “That doesn’t represent the future of this street.”
He’s outspoken about what he believes is the responsibility of building owners to fix up and rent their buildings, rather than let them stand idle. “Some people have owned these buildings for a long time or inherited them. But as a business owner, you have to keep things moving.”
Richard Parkhurst says the construction of Key Plaza in the 1980s signaled to building owners that office space was in high demand, and they renovated accordingly. “There’s no way there’s enough demand for offices downtown,” he says. “But people do want to live here, given the opportunity.”
There are successful retailers on the street now, he points out. Stacy’s Hallmark shop has just passed to the second generation of the same family, and Cosmic Charlie’s has been retailing funky merchandise for 18 years. “But these are destination businesses, ones people will drive to,” he says. “What we’re looking to bring in are businesses that rely on foot traffic and window shopping, that make the new downtowns work.”
Roger Katz points to amenities such as the river, public docking, the Kennebec Rail Trail and the greenbelt paths on the east side of the river, below the former Augusta Mental Health Institute. The city is even installing “kayak caddies” along the shore, which will allow kayakers to store their boats for an after-work paddle.
“It takes more than restaurants and shopping,” Katz says. “Recreation is something downtowns can offer that other places can’t.”
The Parkhursts are not alone in their interest in a revived Water Street. An apartment building catering to University of Maine at Augusta students opened at the north end of the street in 2009 and UMA owns the Gannett Building at 330 Water St., which once housed KeyBank operations. A gift from Portland developer Richard McGoldrick, the 12,000-square-foot building already provides space for two architecture classes. Professor Eric Stark has drawn plans for a full renovation of all four floors, and the rest of the department plans to move in over the next year.
“We could have 250 students downtown on a daily basis,” says Richard Parkhurst. “For Water Street, that’s a lot of people.”
The Parkhursts are banking on even more. A tour of their three buildings shows various stages of redevelopment in a changing downtown district. At 185 Water St., where Tobias lives, a basic makeover on the first floor for a tax preparer will leave intact carpeting, Sheetrock and a suspended ceiling. But brick walls, 19th century tin ceilings and hardwood floors — all there but covered up — are exactly the features most tenants will pay for, says Richard Parkhurst.
“Eventually, we’ll tear all this out and start over,” Tobias says of the space.
At 204 Water St., a full makeover is well under way. There’s no elevator — the three-story building is too small for one — but the higher level of the rear entrance makes stairs manageable. Tobias can’t wait to move into the top floor, where the river view is wide and dramatic. “Change is going to come slowly,” he says, “but we’ll keep upgrading.”
In the old Chernowsky’s building at 228 Water St., the remains of former tenants’ belongings are everywhere. “We figured we’ll get at least 40 Dumpster loads out of here,” Richard Parkhurst says. He’s glad a former tenant removed a safe, weighing several tons, by crane out of an oversized window.
He agrees that there’s a lot of history here, but it’s the future he’s more interested in. He hopes to sign a restaurant lease soon, and will build a model apartment on the top floor to show potential tenants. “You can’t expect to get money out of buildings like this overnight,” he says. “But, over time, it should be a good investment.”
Roger Katz, whose law offices are on Water Street, says it’s the little things, particularly new people with new ideas, that eventually turn around under-valued assets.
And while he’s glad to talk up opportunities for redevelopment on the Kennebec’s east side — the MaineGeneral hospital site, to be vacated by 2015, and the former Statler Tissue mill — he says downtown Water Street is still central to his vision for the state capital. “Across the country, there’s no such thing as a great city without a great downtown.”
Douglas Rooks, a writer based in West Gardiner, can be reached at editorial@mainebiz.biz.
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