October 29, 2007
Old meets new | Olympia Development completes a $10 million office building in the heart of Portland's historic district
By Whit Richardson
It's a sunny afternoon and Jim Brady, president of Olympia Development, stands in the lobby of Custom House Square, the five-story, glass-clad office building his firm completed in mid-September.
Brady illustrates the complexities of the project by pointing to a floor mat in the vestibule and the red-brick sidewalk on the other side of the glass door. Somewhere in between, he explains, solid ground ends and the fill that covers what once was Portland Harbor begins. Constructing a building on such precarious ground meant drilling down 14 to 26 feet to find several steel and concrete pilings, which the building now rests upon. "You don't want Fore Street sliding down on you," Brady says.
Resting a $10 million building with a glass and copper facade on 20-foot-long stilts is just one of the challenges inherent in this ambitious construction project.
It's not every day a new multistory office building is erected in the heart of Portland's Old Port. After all, vacant lots are scarce, lease rates for existing office space remain relatively low and construction prices keep climbing. When building does occur, the projects are far from routine. Developers like Olympia Development, a subsidiary of Portland-based The Olympia Companies, that build in this centuries-old neighborhood must navigate strict historic preservation guidelines and work in a tight urban setting, often mere feet from existing structures.
The 60,000-square-foot Custom House Square, for instance, is across a cobblestone street from what Brady calls "one of the most historically significant buildings in the city" ˆ the Italianate Custom House built in 1873. The new building also is attached to the W.L. Blake building, a warehouse built in the 1860s.
Custom House Square ˆ with its arched roof, floor-to-ceiling windows and granite walls ˆ was designed to fit into the history surrounding it, Brady says. The building was literally shaped by its historic neighbors: A notch was taken out of the northwest corner of the building so people coming down Fore Street would have a better view of the Custom House. Brady says the notch makes the building architecturally unique. "A lot of people complain about going through the historic preservation process," Brady says. "We've actually found we get good, valuable ideas and feedback working with the historic preservation group."
The building is complete and occupied now, except for the unfinished street-level retail space. Its first tenant, the Council for International Educational Exchange, moved into the top four floors and basement on Sept. 15.
"The perfect storm"
Custom House Square is the culmination of a plan Olympia hatched in 1999 when it purchased almost an entire city block for $2.25 million from WLB Holding Co. Olympia owns everything on the block ˆ hemmed in by Franklin Arterial, Commercial Street, Fore Street and Custom House Street ˆ save a thin stretch of buildings housing the restaurant Fore Street and the bakery Standard Baking Co.
The company has developed the lot piece by piece, beginning with an addition to the historic W.L. Blake Building and followed by the Hilton Garden Inn, both on Commercial Street. A few years ago, Olympia completed the office building down the street from Custom House Square that now houses a Bangor Savings Bank branch and the accounting firm, Baker Newman Noyes. In total, Olympia has invested roughly $45 million in the block. The company pays roughly $950,000 in taxes annually to Portland, making it the second largest taxpayer in the city. (The largest taxpayer is Unum, according to the city.)
The corner lot that would become Custom House Square marked the final stage of Olympia's Old Port development binge. But though Olympia was ready to develop on the site, company policy forced it to wait for a committed tenant before breaking ground. Because demand for office space in Portland waxes and wanes, developers like Olympia don't build office buildings "on spec," Brady says. Developers, and the banks that finance the project, like to have at least 75% of a building spoken for before ground is broken, says Greg Boulos, a partner at the Portland commercial real estate firm CB Richard Ellis/The Boulos Co.
CIEE had been a tenant of Olympia's in the adjacent W.L. Blake building. So when the study-abroad agency decided to move its headquarters from Boston to Portland, it started looking for space big enough for its roughly 175 employees. Olympia wanted to build another office building; CIEE needed almost 50,000 sq. ft. of office space. "It all came together at the same time," says Stevan Trooboff, CIEE's CEO. "That's the perfect storm, right?"
The building is an office condo. CIEE actually owns the roughly 50,000 sq. ft. it occupies, rather than leasing it from Olympia. Brady says he could probably "count on one hand" the number of office condos in Portland, but adds they are becoming more trendy. "Particularly with low interest rates, businesses saw it was not a bad opportunity to own real estate rather than lease it," he says.
Most office condos in Portland are less than 5,000 sq. ft., says Boulos, who brokered the deal between CIEE and Olympia. "It's rare that an office condo of 50,000 sq. ft. is built or occupied," he says.
Because CIEE was involved from the beginning, the job was "built to suit," Brady says. The architecture was already settled, but CIEE was able to choose how the interior would look, including where the walls would be located and the color of the trim. Brady says about the only thing Olympia encouraged CIEE to do was use a local designer, which the company did: Olive-green Angela Adams carpet covers all four floors.
The offices have a semi-industrial, 90s dot-com vibe. White-washed ventilation systems and wires are exposed on the ceiling. Movable walls compartmentalize the office space and lend it an airy feel. Picture windows wrap around the building and allow the natural light to spill into the space. "What we were looking for was an attractive place for people to work and I think we've got that and then some," Trooboff says.
More companies, more space
While the top four floors and basement are owned and occupied by CIEE, Olympia still owns the street-level space and is hoping to rent to a retailer, most likely a food or drinking establishment, Brady says. The company was in talks with a national restaurant chain to take the space, but that deal is no longer "in play," Brady says. The building was constructed so that any of its street-level window panels could be replaced by doors, which could make the space appealing to a wide variety of retailers.
Where the sidewalk outside used to be so narrow two people couldn't walk abreast of each other, Olympia worked with the city to narrow the car lanes so the sidewalk could be expanded. The company also spent roughly $500,000 to bury power lines that ran along that side of Fore Street.
The city also allowed Olympia Development and Wright-Ryan Construction, the general contractor on the project, to close Custom House Street for close to 10 months so there'd be a place to stage the construction, lay down material and store machinery. "You end up with good working relationships in tight urban sites," Brady says.
The Olympia Cos., one of two firms vying to redevelop the Maine State Pier, is currently working on roughly $300 million worth of projects all over the northeast, Brady says. Since Olympia finished the Baker Newman Noyes building a few years ago, Brady says construction prices have increased at least 30%. Nevertheless, when you consider the new office buildings that have gone up over the past few years in Portland's Bayside neighborhood, and plans for more on the city's East End, construction of office buildings in Portland appears to be going strong, says Boulos. "There's been more activity in the past four or five years than historically has been the case," he says.
What it all comes down to are the tenants, Boulos says. When office buildings go up in Maine, he says, it's a sign companies are looking for space and willing to pay more than existing lease rates for it. In Olympia's case, it was CIEE moving its headquarters to Portland. "That's great for Portland," Boulos says. "I wish we'd see more companies expanding in Maine like that."
Brady illustrates the complexities of the project by pointing to a floor mat in the vestibule and the red-brick sidewalk on the other side of the glass door. Somewhere in between, he explains, solid ground ends and the fill that covers what once was Portland Harbor begins. Constructing a building on such precarious ground meant drilling down 14 to 26 feet to find several steel and concrete pilings, which the building now rests upon. "You don't want Fore Street sliding down on you," Brady says.
Resting a $10 million building with a glass and copper facade on 20-foot-long stilts is just one of the challenges inherent in this ambitious construction project.
It's not every day a new multistory office building is erected in the heart of Portland's Old Port. After all, vacant lots are scarce, lease rates for existing office space remain relatively low and construction prices keep climbing. When building does occur, the projects are far from routine. Developers like Olympia Development, a subsidiary of Portland-based The Olympia Companies, that build in this centuries-old neighborhood must navigate strict historic preservation guidelines and work in a tight urban setting, often mere feet from existing structures.
The 60,000-square-foot Custom House Square, for instance, is across a cobblestone street from what Brady calls "one of the most historically significant buildings in the city" ˆ the Italianate Custom House built in 1873. The new building also is attached to the W.L. Blake building, a warehouse built in the 1860s.
Custom House Square ˆ with its arched roof, floor-to-ceiling windows and granite walls ˆ was designed to fit into the history surrounding it, Brady says. The building was literally shaped by its historic neighbors: A notch was taken out of the northwest corner of the building so people coming down Fore Street would have a better view of the Custom House. Brady says the notch makes the building architecturally unique. "A lot of people complain about going through the historic preservation process," Brady says. "We've actually found we get good, valuable ideas and feedback working with the historic preservation group."
The building is complete and occupied now, except for the unfinished street-level retail space. Its first tenant, the Council for International Educational Exchange, moved into the top four floors and basement on Sept. 15.
"The perfect storm"
Custom House Square is the culmination of a plan Olympia hatched in 1999 when it purchased almost an entire city block for $2.25 million from WLB Holding Co. Olympia owns everything on the block ˆ hemmed in by Franklin Arterial, Commercial Street, Fore Street and Custom House Street ˆ save a thin stretch of buildings housing the restaurant Fore Street and the bakery Standard Baking Co.
The company has developed the lot piece by piece, beginning with an addition to the historic W.L. Blake Building and followed by the Hilton Garden Inn, both on Commercial Street. A few years ago, Olympia completed the office building down the street from Custom House Square that now houses a Bangor Savings Bank branch and the accounting firm, Baker Newman Noyes. In total, Olympia has invested roughly $45 million in the block. The company pays roughly $950,000 in taxes annually to Portland, making it the second largest taxpayer in the city. (The largest taxpayer is Unum, according to the city.)
The corner lot that would become Custom House Square marked the final stage of Olympia's Old Port development binge. But though Olympia was ready to develop on the site, company policy forced it to wait for a committed tenant before breaking ground. Because demand for office space in Portland waxes and wanes, developers like Olympia don't build office buildings "on spec," Brady says. Developers, and the banks that finance the project, like to have at least 75% of a building spoken for before ground is broken, says Greg Boulos, a partner at the Portland commercial real estate firm CB Richard Ellis/The Boulos Co.
CIEE had been a tenant of Olympia's in the adjacent W.L. Blake building. So when the study-abroad agency decided to move its headquarters from Boston to Portland, it started looking for space big enough for its roughly 175 employees. Olympia wanted to build another office building; CIEE needed almost 50,000 sq. ft. of office space. "It all came together at the same time," says Stevan Trooboff, CIEE's CEO. "That's the perfect storm, right?"
The building is an office condo. CIEE actually owns the roughly 50,000 sq. ft. it occupies, rather than leasing it from Olympia. Brady says he could probably "count on one hand" the number of office condos in Portland, but adds they are becoming more trendy. "Particularly with low interest rates, businesses saw it was not a bad opportunity to own real estate rather than lease it," he says.
Most office condos in Portland are less than 5,000 sq. ft., says Boulos, who brokered the deal between CIEE and Olympia. "It's rare that an office condo of 50,000 sq. ft. is built or occupied," he says.
Because CIEE was involved from the beginning, the job was "built to suit," Brady says. The architecture was already settled, but CIEE was able to choose how the interior would look, including where the walls would be located and the color of the trim. Brady says about the only thing Olympia encouraged CIEE to do was use a local designer, which the company did: Olive-green Angela Adams carpet covers all four floors.
The offices have a semi-industrial, 90s dot-com vibe. White-washed ventilation systems and wires are exposed on the ceiling. Movable walls compartmentalize the office space and lend it an airy feel. Picture windows wrap around the building and allow the natural light to spill into the space. "What we were looking for was an attractive place for people to work and I think we've got that and then some," Trooboff says.
More companies, more space
While the top four floors and basement are owned and occupied by CIEE, Olympia still owns the street-level space and is hoping to rent to a retailer, most likely a food or drinking establishment, Brady says. The company was in talks with a national restaurant chain to take the space, but that deal is no longer "in play," Brady says. The building was constructed so that any of its street-level window panels could be replaced by doors, which could make the space appealing to a wide variety of retailers.
Where the sidewalk outside used to be so narrow two people couldn't walk abreast of each other, Olympia worked with the city to narrow the car lanes so the sidewalk could be expanded. The company also spent roughly $500,000 to bury power lines that ran along that side of Fore Street.
The city also allowed Olympia Development and Wright-Ryan Construction, the general contractor on the project, to close Custom House Street for close to 10 months so there'd be a place to stage the construction, lay down material and store machinery. "You end up with good working relationships in tight urban sites," Brady says.
The Olympia Cos., one of two firms vying to redevelop the Maine State Pier, is currently working on roughly $300 million worth of projects all over the northeast, Brady says. Since Olympia finished the Baker Newman Noyes building a few years ago, Brady says construction prices have increased at least 30%. Nevertheless, when you consider the new office buildings that have gone up over the past few years in Portland's Bayside neighborhood, and plans for more on the city's East End, construction of office buildings in Portland appears to be going strong, says Boulos. "There's been more activity in the past four or five years than historically has been the case," he says.
What it all comes down to are the tenants, Boulos says. When office buildings go up in Maine, he says, it's a sign companies are looking for space and willing to pay more than existing lease rates for it. In Olympia's case, it was CIEE moving its headquarters to Portland. "That's great for Portland," Boulos says. "I wish we'd see more companies expanding in Maine like that."
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