Portland's Bay House condo project scrapped for new use
Rendering/Courtesy Atlas Investment Group
A rendering of the Bay House, which is now slated to be a 100-unit apartment complex instead of condos.
A proposed mixed-used residential condominium development on Portland's eastern waterfront will instead become a 100-unit apartment complex — a change driven by the lending market.
Project developers, Village at Oceangate, originally proposed a two-phase development of up to 176 high-end residential condominiums, named The Bay House, at the site of the former Village Café restaurant at Newbury and Hancock streets. Instead, one of the partners says they will build 108 market-rate apartments. First floor commercial uses, including a 150- to 200-seat restaurant, in the original plan will still be part of the proposal.
The condominium project was initially stalled when the real estate market collapsed in 2008 and the project couldn't get financing. Last year, the city council granted the developer the maximum extension on a contract zone for the five-story project.
But Realtor Sandy Johnson, a partner at Town & Shore Associates, says the delays compelled some potential residents pull out of their intent-to-purchase contracts. Johnson said at one point about 30% of the 82 units to be built in the project's first phase were under contract by prospective residents. After many prospective buyers pulled out, the company voided the remanding contracts, she says.
The company recently dismantled its model showroom and office on Market Street.
Gordon Reger, a principal in the Buffalo, N.Y.-based Reger Holdings and a partner in the development, says the change from residential condos to apartments was driven by lenders, who simply are not funding new, large-scale condo projects.
"I think right now, these kinds of (large residential) projects are toxic to lenders," Reger says. "As beautiful as Portland, Maine is; and as strong as the market is; and as positive as we are about our project — we're not going to find a major lender who is going to go against everything else that is going on in banking around the country."
Reger says preliminary plans indicate the following breakdown for the apartment units: eight studios, 20 one bedroom, 72 two bedroom and eight three bedroom. Sixteen of the two-bedroom units may include a den, he says.
Reger would not disclose how much the rents will be on the units, other than to say it will be at market rates. "They won't be the cheapest apartments in town," he says, noting the units could be converted to condos at a later date.
The condos were originally being marketed for $175,000 for a studio to $550,000 for a three bedroom.
Developers are close to receiving financing for the $30 million project. "We're very confident it will be closed soon," Reger says.
Ground-breaking is expected to take place this spring with the goal of having tenants move in the summer of 2013.
Significant construction would have to start by Sept. 22 for the contract zone granted by the city to remain in effect.
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