February 11, 2008
Remaking Hathaway | Long an empty anchor downtown, the old factory at the end of Main Street is getting a makeover
By Douglas Rooks
It was just four years ago in January that Paul Boghossian, a Rhode Island developer specializing in old mills, was showing a Colby College classmate pictures of a current project. The classmate, Ave Vinick, happens to be president of the Waterville Maine Street program. He told Boghossian, "Do I have a mill for you."
The mill was the Hathaway Shirt Co. plant that had shut down in 2002, ending more than a century and a half in business. Its new incarnation as the Hathaway Creative Center was celebrated Jan. 10, marking an unusual collaboration of federal, state and local governments, and the efforts of developers from two other states.
Where sewing machines once produced thousands of shirts five days a week (workers always had weekends off), there will soon be offices, apartments, radio stations, a spa and salon, a day care center, and restaurants. While Maine has seen the successful reuse and adaptation of old mills before, this may be one of the most diverse and ambitious to date.
The mill now best known for the Hathaway Shirt Company is part of the mammoth Lockwood Manufacturing complex. The imposing brick mills at the south end of Main Street beside the Kennebec River were built to produce cotton fabric for shipment around the world, and comprise three buildings and 450,000 sq. ft. The mill was like countless others across New England ˆ once the vital center of the downtown community, now shuttered and in danger of turning into a municipal white elephant. The city had taken over the Hathaway building in 2003 and then embarked on the arduous quest of returning it to commercial use.
Remembering his first conversation, Boghossian said, "I probably rolled my eyes," remembering the declining state of downtown during his years at Colby in the 1970s. "But I said I'd come and take a look."
What he saw surprised him.
"This is probably the best-kept old mill building I'd ever seen, and I've seen a lot," he said. When it shut down, Hathaway was the last major shirt-manufacturing plant in the United States, and up until its last few decades it had been very profitable.
When the Lockwood operation shut down in the 1950s, Hathaway moved into the largest building, just over 220,000 sq. ft. on five levels. Its chairman at the time, Ellerton Jette, was also a Colby graduate, and his donation of his entire art collection formed the nucleus of the Colby College Museum of Art, now among the largest museums in Maine. Colby stepped forward as an early backer of redevelopment, with President William Adams ultimately pledging $1 million in financing.
"Hathaway made over the whole building, the roof, the floors, everything," Boghossian said. "In some of the mills, the owners had the means to maintain them, but not the inclination. This one had never been allowed to deteriorate."
Still, the mill complex was a massive undertaking in a city that counts only 16,000 residents. Boghossian needed an anchor tenant, and he found it in MaineGeneral, the community hospital serving Waterville and Augusta. MaineGeneral is moving its administrative offices to the complex, taking up 40,000 sq. ft., or nearly a whole floor.
He also needed a partner, and he found that, too, in Tom Niemann, a North Carolina venture capitalist who is also redeveloping the historic Kennebec Arsenal in Augusta.
The stars come out
The significance of the project was underlined at the groundbreaking ceremony marking the transfer of the mill to Boghossian's and Niemann's two LLCs. The ceremony for their joint venture drew more than 300 people who braved the January cold, with Gov. John Baldacci and Sen. Olympia Snowe as the headlined speakers. For more than two hours, the audience applauded frequently on the first floor of the Hathaway building, where shirts were shipped for decades and radio stations will tune up within a year.
Among other government movers and shakers attending were state Senate Majority Leader Libby Mitchell, House Speaker Glenn Cummings and the entire Waterville-area legislative delegation.
Baldacci used the occasion to announce his support for expanding the state tax credit that helped move the Hathaway project forward. Passed as separate legislation last year, the credit will refund $1.5 million annually to developers for up to six years, a potential total of $9 million for the project that, in two phases, will cost $56 million. The state is also providing a $1 million annual tax credit for Niemann's Kennebec Arsenal project, and the proposal in Baldacci's supplemental budget would make credits available to qualifying downtown redevelopments elsewhere in the state.
Snowe's remarks reflected a different perspective on the project. Her husband, former Gov. John McKernan, led an investment team that in 1996 purchased the Hathaway plant from its then-owner, Warnaco, which planned to shut it down. Snowe took a part in convincing retailers like Wal-Mart to place large orders for the revived operation, and was working to secure military uniform contracts before the plant was again sold in 2001, to Westport, Conn.-based Windsong, which ran it for less than a year before shutting down for good.
Snowe said Hathaway had managed "160 years of excellence," and had "a renowned, skilled and productive work force." She praised Boghossian and Niemann as a "dynamic duo" who will restore the complex to a central place in the community.
When he took the podium, Niemann caused ears to perk up when he announced, emphatically, that "Maine is a good place to do business." Niemann's company got its start in Durham, N.C., when it took on in 1994 what many believed was the unlikely task of redeveloping several historic tobacco sheds downtown. His success in helping revitalize a stagnant downtown earned wide attention, and he identified Maine as another state with unused assets in terms of its historic structures.
The Durham projects returned 1.2 million sq. ft. to commercial use and brought in 1,000 jobs, he said. Niemann said he found something similarly appealing on his first trip north in late 2003: "I fell in love with Maine."
Moving downtown
After all the festivities, a lot of work remains to be done in the still-empty building, but Boghossian said the developers are now ahead of schedule in signing up tenants. They have taken title to the smallest building, about 50,000 sq. ft., that formerly was used by Central Maine Power for its line truck and back-office operations, and expect to close in March on the third building, used as a warehouse by retailer Marden's, which is now in the process of moving out.
As envisioned by the developers, the Hathaway building will feature, in addition to the shops, restaurants, offices and a community meeting room, 66 apartments on the top floor that will include four "affordable" units administered by the city through federal grants. When fully leased, he said, the building will include a diversity of uses rivaling the multi-level department stores that once anchored Maine downtowns.
Demand for housing was greater than expected, and this will allow the Marden's building to be split evenly between residential and commercial uses, Boghossian said.
"People really do want to live downtown," he said. Thus far, there are 140 rental requests for the 66 units. The primary customers, he said, are professionals without children, and older couples and singles "who no longer want to own a house, who are tired of shoveling the snow."
The monthly rent for the Hathaway units ˆ $900 a month for 800 sq. ft. ˆ is "at the top of the scale" for the area, and the Marden building "actually lays out better for housing," Boghossian said. Smaller 600-square-foot units there will rent for $700 a month, and capture a much larger segment of the rental market, he said.
Construction on the Hathaway building will begin this spring. Phase two, which Boghossian hopes can begin in 2009, should encompass both of the remaining structures, though there are not yet firm plans for reuse of the CMP building.
The final piece that enabled the success of the redevelopment plan, Boghossian said, is the surprising strength of the existing downtown. Despite the collapse of the mill economy ˆ the Scott paper mill across the river in Winslow also shut down in 1998 ˆ Waterville has managed to retain a downtown commercial nucleus. "People come from miles around to eat at the downtown restaurants," he said. "This is probably the strongest Main Street program in the state. They've really worked hard, and they've also made our job easier." A pedestrian walkway that will link the mills directly to the downtown is also expected to be complete this year.
In addition to the state tax credit, the project is benefiting from federal "new market" tax credits that Snowe has championed in the Senate Finance Committee.
But are all the public subsidies worth it?
Boghossian says that they are. While he agrees with critics of some of the subsidies for big box stores and shopping malls that are competing against local retailers, he says that tax breaks are essential to redeveloping the old mills, where per-square-foot costs are significantly higher and parking is often at a premium. Waterville, however, has plenty of parking in the Concourse, an area created during 1970s urban renewal that tore down numerous tenements while preserving Main Street. While the area "needs some sprucing up," Boghossian said, it does eliminate the need for a parking garage for the mill project.
House Speaker Cummings has become a strong supporter of the state tax credit, which he said can spur renewal in other Maine downtowns. "When you find something that works, replicate it," he said. "It's done wonders in Rhode Island and Missouri, and a lot of other states are considering it."
The Rhode Island program, where Boghossian got his start with old mills, is the most extensive in the nation, and despite "a horrendous state budget gap" this year, much larger than Maine's, legislative support there remains strong, he said. "They may cut it back a bit, but they can see the results. It's not just in Providence, but in small towns all around the state."
In the not too distant future, Boghossian noted, support for projects like Hathaway will be seen as a smart investment, as soaring energy costs prompt commuters to think about moving closer to work. Boghossian even predicts that Maine's residential patterns, which have been dispersing since the 1950s, will begin to centralize again.
This idea has received support in several studies by the State Planning Office, which find that there is a strong market for more compact housing units, particularly in downtown areas, if developers can find a way to build them.
Boghossian uses the T-Mobile call center operation, just up the road in Oakland, as an example of the opportunities. "They're up to 800 jobs now, and these are good, well-paying positions," he said. "The employees come from 55 towns, all over northern Maine." After awhile, he said, "the commute from Milo or Dexter may not be so appealing." And at that point, "Waterville will be looking more and more like a good place to live."
The mill was the Hathaway Shirt Co. plant that had shut down in 2002, ending more than a century and a half in business. Its new incarnation as the Hathaway Creative Center was celebrated Jan. 10, marking an unusual collaboration of federal, state and local governments, and the efforts of developers from two other states.
Where sewing machines once produced thousands of shirts five days a week (workers always had weekends off), there will soon be offices, apartments, radio stations, a spa and salon, a day care center, and restaurants. While Maine has seen the successful reuse and adaptation of old mills before, this may be one of the most diverse and ambitious to date.
The mill now best known for the Hathaway Shirt Company is part of the mammoth Lockwood Manufacturing complex. The imposing brick mills at the south end of Main Street beside the Kennebec River were built to produce cotton fabric for shipment around the world, and comprise three buildings and 450,000 sq. ft. The mill was like countless others across New England ˆ once the vital center of the downtown community, now shuttered and in danger of turning into a municipal white elephant. The city had taken over the Hathaway building in 2003 and then embarked on the arduous quest of returning it to commercial use.
Remembering his first conversation, Boghossian said, "I probably rolled my eyes," remembering the declining state of downtown during his years at Colby in the 1970s. "But I said I'd come and take a look."
What he saw surprised him.
"This is probably the best-kept old mill building I'd ever seen, and I've seen a lot," he said. When it shut down, Hathaway was the last major shirt-manufacturing plant in the United States, and up until its last few decades it had been very profitable.
When the Lockwood operation shut down in the 1950s, Hathaway moved into the largest building, just over 220,000 sq. ft. on five levels. Its chairman at the time, Ellerton Jette, was also a Colby graduate, and his donation of his entire art collection formed the nucleus of the Colby College Museum of Art, now among the largest museums in Maine. Colby stepped forward as an early backer of redevelopment, with President William Adams ultimately pledging $1 million in financing.
"Hathaway made over the whole building, the roof, the floors, everything," Boghossian said. "In some of the mills, the owners had the means to maintain them, but not the inclination. This one had never been allowed to deteriorate."
Still, the mill complex was a massive undertaking in a city that counts only 16,000 residents. Boghossian needed an anchor tenant, and he found it in MaineGeneral, the community hospital serving Waterville and Augusta. MaineGeneral is moving its administrative offices to the complex, taking up 40,000 sq. ft., or nearly a whole floor.
He also needed a partner, and he found that, too, in Tom Niemann, a North Carolina venture capitalist who is also redeveloping the historic Kennebec Arsenal in Augusta.
The stars come out
The significance of the project was underlined at the groundbreaking ceremony marking the transfer of the mill to Boghossian's and Niemann's two LLCs. The ceremony for their joint venture drew more than 300 people who braved the January cold, with Gov. John Baldacci and Sen. Olympia Snowe as the headlined speakers. For more than two hours, the audience applauded frequently on the first floor of the Hathaway building, where shirts were shipped for decades and radio stations will tune up within a year.
Among other government movers and shakers attending were state Senate Majority Leader Libby Mitchell, House Speaker Glenn Cummings and the entire Waterville-area legislative delegation.
Baldacci used the occasion to announce his support for expanding the state tax credit that helped move the Hathaway project forward. Passed as separate legislation last year, the credit will refund $1.5 million annually to developers for up to six years, a potential total of $9 million for the project that, in two phases, will cost $56 million. The state is also providing a $1 million annual tax credit for Niemann's Kennebec Arsenal project, and the proposal in Baldacci's supplemental budget would make credits available to qualifying downtown redevelopments elsewhere in the state.
Snowe's remarks reflected a different perspective on the project. Her husband, former Gov. John McKernan, led an investment team that in 1996 purchased the Hathaway plant from its then-owner, Warnaco, which planned to shut it down. Snowe took a part in convincing retailers like Wal-Mart to place large orders for the revived operation, and was working to secure military uniform contracts before the plant was again sold in 2001, to Westport, Conn.-based Windsong, which ran it for less than a year before shutting down for good.
Snowe said Hathaway had managed "160 years of excellence," and had "a renowned, skilled and productive work force." She praised Boghossian and Niemann as a "dynamic duo" who will restore the complex to a central place in the community.
When he took the podium, Niemann caused ears to perk up when he announced, emphatically, that "Maine is a good place to do business." Niemann's company got its start in Durham, N.C., when it took on in 1994 what many believed was the unlikely task of redeveloping several historic tobacco sheds downtown. His success in helping revitalize a stagnant downtown earned wide attention, and he identified Maine as another state with unused assets in terms of its historic structures.
The Durham projects returned 1.2 million sq. ft. to commercial use and brought in 1,000 jobs, he said. Niemann said he found something similarly appealing on his first trip north in late 2003: "I fell in love with Maine."
Moving downtown
After all the festivities, a lot of work remains to be done in the still-empty building, but Boghossian said the developers are now ahead of schedule in signing up tenants. They have taken title to the smallest building, about 50,000 sq. ft., that formerly was used by Central Maine Power for its line truck and back-office operations, and expect to close in March on the third building, used as a warehouse by retailer Marden's, which is now in the process of moving out.
As envisioned by the developers, the Hathaway building will feature, in addition to the shops, restaurants, offices and a community meeting room, 66 apartments on the top floor that will include four "affordable" units administered by the city through federal grants. When fully leased, he said, the building will include a diversity of uses rivaling the multi-level department stores that once anchored Maine downtowns.
Demand for housing was greater than expected, and this will allow the Marden's building to be split evenly between residential and commercial uses, Boghossian said.
"People really do want to live downtown," he said. Thus far, there are 140 rental requests for the 66 units. The primary customers, he said, are professionals without children, and older couples and singles "who no longer want to own a house, who are tired of shoveling the snow."
The monthly rent for the Hathaway units ˆ $900 a month for 800 sq. ft. ˆ is "at the top of the scale" for the area, and the Marden building "actually lays out better for housing," Boghossian said. Smaller 600-square-foot units there will rent for $700 a month, and capture a much larger segment of the rental market, he said.
Construction on the Hathaway building will begin this spring. Phase two, which Boghossian hopes can begin in 2009, should encompass both of the remaining structures, though there are not yet firm plans for reuse of the CMP building.
The final piece that enabled the success of the redevelopment plan, Boghossian said, is the surprising strength of the existing downtown. Despite the collapse of the mill economy ˆ the Scott paper mill across the river in Winslow also shut down in 1998 ˆ Waterville has managed to retain a downtown commercial nucleus. "People come from miles around to eat at the downtown restaurants," he said. "This is probably the strongest Main Street program in the state. They've really worked hard, and they've also made our job easier." A pedestrian walkway that will link the mills directly to the downtown is also expected to be complete this year.
In addition to the state tax credit, the project is benefiting from federal "new market" tax credits that Snowe has championed in the Senate Finance Committee.
But are all the public subsidies worth it?
Boghossian says that they are. While he agrees with critics of some of the subsidies for big box stores and shopping malls that are competing against local retailers, he says that tax breaks are essential to redeveloping the old mills, where per-square-foot costs are significantly higher and parking is often at a premium. Waterville, however, has plenty of parking in the Concourse, an area created during 1970s urban renewal that tore down numerous tenements while preserving Main Street. While the area "needs some sprucing up," Boghossian said, it does eliminate the need for a parking garage for the mill project.
House Speaker Cummings has become a strong supporter of the state tax credit, which he said can spur renewal in other Maine downtowns. "When you find something that works, replicate it," he said. "It's done wonders in Rhode Island and Missouri, and a lot of other states are considering it."
The Rhode Island program, where Boghossian got his start with old mills, is the most extensive in the nation, and despite "a horrendous state budget gap" this year, much larger than Maine's, legislative support there remains strong, he said. "They may cut it back a bit, but they can see the results. It's not just in Providence, but in small towns all around the state."
In the not too distant future, Boghossian noted, support for projects like Hathaway will be seen as a smart investment, as soaring energy costs prompt commuters to think about moving closer to work. Boghossian even predicts that Maine's residential patterns, which have been dispersing since the 1950s, will begin to centralize again.
This idea has received support in several studies by the State Planning Office, which find that there is a strong market for more compact housing units, particularly in downtown areas, if developers can find a way to build them.
Boghossian uses the T-Mobile call center operation, just up the road in Oakland, as an example of the opportunities. "They're up to 800 jobs now, and these are good, well-paying positions," he said. "The employees come from 55 towns, all over northern Maine." After awhile, he said, "the commute from Milo or Dexter may not be so appealing." And at that point, "Waterville will be looking more and more like a good place to live."
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