Real Estate Insider Notebook: Projects in Rumford, Kittery and Biddeford

Courtesy / USDA Rural Development The Bag Mill in Rumford has been redeveloped for office use. It now houses a dental clinic, Child Development Services and facilities for the University of Maine Augusta.

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By Peter Van Allen

The Bag Mill is a 64,000-square-foot building being repurposed in the heart of Rumford.

The building is four stories, each comprising 16,000 square feet; the building also includes a basement. The Bag Mill is attached on three sides to buildings belonging to Nine Dragons Paper. Built in 1891 by the Rumford Falls Paper Co. and later owned by the Continental Paper Bag Co., the building remains a centerpiece of the local economy, but is only partially occupied.

In 2002, the Bag Mill was donated to the River Valley Growth Council, a local nonprofit with a mission of bringing jobs into the River Valley region. Community leaders raised more than $3.5 million for the rehabilitation of the building and ultimately secured a full floor and a half of critical service providers, including a dental clinic, Child Development Services and space for the University of Maine at Augusta.

Now, work is being done to renovate the remaining two-and-a-half floors, which are now raw space. Once complete, it will be the first time in decades that the entire building will be in service.

A private developer, 60 Lowell Street LLC, has over the past two years invested $420,000 to replace a leaking roof, upgrade to LED lighting and make other improvements. For the remaining space, the developer is in the process of securing the remaining financing and getting necessary approvals.

Earlier this month, USDA Rural Development made public a $500,000 grant to help fund upgrades to a high-efficiency electricity-based heating and cooling system.

The system will be installed by CCB Inc., a Westbrook-based contractor that has done renovation work on the building. Portland-based Open IoT Group will install the controls. The project will convert the top floor and a half to lodging, with support services, such as a restaurant and pool, on the first floor.

A spokeswoman for the USDA Rural Development office in Maine said the building did not sustain any substantial damage from the flooding related to the Dec. 18 storm.

aerial of industrial buildings on island

COURTESY / U.S. NAVY

An aerial view of Portsmouth Naval Shipyard, which is in Kittery, on Seavey Island in the Piscataqua River.

Housing for Kittery shipyard

The Portsmouth Naval Shipyard in Kittery, which serves as a critical ship maintenance facility for the U.S. Navy, has more than 6,500 employees but plans to hire at least 500 net new workers by 2026.

With expected retirements, the shipyard will likely have to find a total of 4,000 new workers in the next three years.

But to hire employees, the need for housing in the surrounding areas will grow, according to a housing report released this week.

The report calls for reducing barriers to the development of multifamily housing. It says accessory dwelling units could also help serve the need.

It also addresses the need for financing tools, including a housing trust fund, that could assist federal workers in buying or renting homes.

“Most of us have experienced or know someone dealing with the challenges of this housing market," said Stephanie Carver, transportation director for the Southern Maine Planning and Development Commission.

"We know the problem is complex, but the need for more housing is clear and the lack of housing options has evolved as a significant workforce issue. The lack of suitable land, limited financing support for innovative housing, high construction costs, and regulatory limits and uncertainty are all contributing factors. We see our communities trying to adjust, and we hope the recommended strategies from this report can help them effectively face these challenges.”

Housing prices in the 10 surrounding communities have increased by 46% over the past three years. The population of those communities is now 114,000, but is expected to reach 123,000 in the next 15 years, which will likely create additional pressure on housing prices.

Potential strategies cited by the housing report:

Increasing density and decreasing lot size
Allowing multi-family housing and providing incentives and zoning for smaller starter homes
Reducing land per dwelling unit requirements for multi-family
Providing a variety of housing types and supporting efforts to create adequate workforce housing
Reviewing zoning and subdivision regulations
Reviewing town-owned property for affordable housing
Expanding water and sewer capacity

The report was funded by the U.S. Department of Defense and carried out by the town of Kittery, Southern Maine Planning and Development Commission and the shipyard.

A Biddeford development moves forward

Construction has started on the Foundry, a commercial space adjacent to the same developer's Levee housing development in Biddeford.

It will have 22,513 square feet of commercial space in a historic, redeveloped structure, with views of the Saco River.

The developer is Portland-based Reveler Development, which has been active in Portland.

The cost will be $8 million. In addition to investor equity, project financing includes a primary loan through Kennebunk Savings, a bridge loan and historic tax credits through Brunswick-based CEI, and brownfields funding through the Southern Maine Planning and Development Commission’s revolving loan fund. The Foundry's construction is expected to be complete in early 2024.

“The Foundry will offer something entirely unique to downtown Biddeford’s retail and dining landscape,” says John Laliberte, CEO of Reveler Development. “We appreciate all of our funding partners who make this project possible. As the next phase in our development along Upper Falls Road, the Foundry will become an activated commercial destination within the Levee. We are excited to see this project come to life, as it brings premier commercial tenants to the area and further contributes to Biddeford’s resurgence.”

The original building dates to 1941 and had housed a screw machine production facility.