A self-sustaining funding model would use condo development to drive reinvestment into the entire property, which would include essential services and retail.
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A local investor group has signed an agreement to buy the troubled Bangor Mall property from Namdar Realty Group and proposes to redevelop it as a residential and retail destination.
Bangor Marketplace and Residences LLC is in the process of being formed for the purchase and ownership of the property, Michael Cole, a member of the corporation and its spokesperson, told Mainebiz.
The purchase price for the pending off-market deal was not disclosed.
Namdar, a Great Neck, N.Y., real estate investment trust whose specialties include shopping malls, led the acquisition of the property at auction in 2019 for $12.6 million. Also involved in the purchase were New York real estate companies Mason Asset Management and CH Capital Group.
30% occupied
Negotiations with Namdar have been underway for the past eight months, said Cole.
The corporation is now going through 60 days of due diligence, including inspections and putting together financing. It’s expected the transaction could close in mid-June, he said.
“This is a big deal for the whole community,” Cole said.
The 651,032-square-foot mall on 77 acres, at 663 Stillwater Ave., was built in 1978 and renovated in 1998. In 2019, the mall was about 70% occupied. That’s dropped to about 30% today, Cole said.
That figure includes anchors Dick’s Sporting Goods (68,054 square feet), J.C. Penney (88,482 square feet) and Furniture Mattresses & More (120,000 square feet), with several out-parcels. (Furniture Mattresses & More has been sold to an out-of-state company, the Bangor Daily News recently reported.)
Cole has been a real estate agent for over 20 years and has a history of working with many types of real estate developers, including land and commercial, he said. His family dates back five generations in the city.
He credited state Sen. Joe Baldacci, D-Bangor, for helping to move forward the mall proposal. (Baldacci is a among the candidates seeking the House seat held by U.S. Rep. Jared Golden, D-2nd District.)
Housing and services
The proposal is to create a mixed-use destination called Bangor Marketplace & Residences, as “a community-first redevelopment that transforms an underperforming property into a vibrant, mixed-use destination — combining housing, essential services and local businesses." It would be funded through a "self-sustaining model" that uses condominium development to drive reinvestment into the entire property.
The redevelopment would convert 90,000 square feet of vacant anchor space, formerly occupied by Sears, into 200-plus condominiums. It would use revenue from condo sales to fund structural improvements, code compliance and full modernization of the property.
The condo units would be supported by essential businesses including grocery/convenience, bakery/café, gym, health clinic, daycare, laundry and assisted living.
A significant portion of the existing parking lot would be removed and replaced with landscaped green space, walking paths and outdoor gathering areas, Cole said. New parking garages would be constructed to maintain and improve parking capacity while freeing surface land for “people-focused” design.
“This is a major investment, but it fundamentally transforms the property from a traditional mall into a livable, walkable destination,” Cole said in a presentation to the city on March 30.
Financing
The marketplace component will be in the mall area not occupied by the former Sears. Where possible, store entryways would be turned around so they face the outdoors, rather than the mall interior, in order to have a feeling more like an outlet mall, he said.
Cole said the corporation is in discussions with prospective commercial tenants.
Financing is expected to include a pending $1 million half-acre land sale, gap funding from Brunswick community development financial institution Genesis Fund, investors and a conventional construction loan.
“We have a few investors putting up funds to get this closed,” he said.
Cole said the corporation expects to consult on the proposal with the Maine Redevelopment Land Bank Authority, a quasi-government entity to support municipalities facing complex redevelopment challenges.
“The Maine Redevelopment Land Bank will be instrumental in the development process,” he said.
The appearance of the concrete and steel building shows leaks and water stains, but the structure of the building is sound and repairs will be made where needed, with many portions replaced, he said. Upgrades will include the parking lot makeover, repairs to the exterior and interior and system updates such as HVAC and lighting.
“It will be a modern building,” he said.
