Courtesy / Baha LLC
Anthony Barbano, of Baha LLC, said Building A in the commercial condo development should begin this spring.
January 7, 2019
Saco's Mill Brook Business Park could become haven for startups
Courtesy / Kevin Roche
Kevin Roche bought the end unit in the flex-space building at 10 Mill Brook Road in Saco's Mill Brook Business Park. The building is part of a plan by Baha LLC developers to build 16 commercial condo units.
The sale of a newly built flex-space commercial condominium unit at Saco’s Mill Brook Business Park uncovered a larger story about the overall development of 16 such units that are designed to support the city’s small business and start-up community.
Baha LLC sold a 1,494-square-foot unit at 10 Mill Brook Road to BBK Investments LLC for $210,000. Greg Hastings from NAI The Dunham Group and Mike Anderson from Malone Commercial Brokers brokered the sale, which closed Oct. 10.
The seller, Baha LLC, is developing three buildings at the property. The buildings are designed to house 16 flexible commercial condo units, with an eye toward selling them at an affordable price to small businesses.
Baha LLC is owned by Dave Smaha and Anthony Barbano. Barbano owns Elite Construction Services in Saco and Smaha has been engaged in real estate development — primarily small-residential but also commercial — for the past decade.
Smaha told Mainebiz that his and Barbano’s idea around development at the park centers on supporting small businesses. The idea, he said, is to offer small businesses affordable space to buy, as opposed to working from home or leasing.
Reasonable price, opportunity to own
“Typically, small businesses can’t afford a piece of land and have a building built,” Smaha said. “What we’re able to do is take a large piece of land, divide it into 16 units, keep our price point reasonable, and afford small businesses the opportunity to own their own space.
"A small-business owner can pay less in acquisition costs and fees than they would pay if they leased, and actually own something and build equity," he said. "And when someone has access to ownership, they’re more apt to stay” in the municipality they’ve selected.
“People take pride in owning their property and they’re not at the mercy of a landlord, who can decide to sell or the lease rate goes up.”
The lot totals 3.7 acres, said Barbano. He and Smaha bought the acreage in late 2017, received approvals from the city of Saco to build 16 units and broke ground in April. The development consists of Buildings A, B and C. Buildings B and C are constructed. Building B has 10 units totaling 15,626 square feet. Building C has three units totaling 4,400 square feet.
Barbano said he expects to break ground on Building A this spring unless someone shows interest sooner. Building A will consist of three units totaling 5,396 square feet.
Ceiling heights are 17 feet throughout the development, with mezzanines providing space for offices and storage. The flex aspect of the development means that spaces, averaging 1,500 square feet each, can be combined to accommodate the user’s needs.
Barbano, who has focused mostly on residential construction, said he got into the commercial project because of the market opportunity the 2% commercial space vacancy rate in the region offers. He said the partners are willing to either sell or lease the units.
Saco’s Mill Brook Business Park is a 10-lot, 70-acre parcel, with lots ranging from two to eight usable acres. The park is a mile from Interstate 195 and has access to U.S. Route 1. All sites have water and sewer access.
Manufacturing incubator
Courtesy / Baha LLC
Baha LLC's Building B in Saco's Mill Brook Business Park houses 10 flexible commercial condo units.
The buyer in the deal has a similar idea around supporting start-ups. BBK Investments LLC is owned by Kevin Roche, a former Saco city councilor and the co-founder and chief financial officer of Belleco Inc. in Saco, which manufactured commercial kitchen equipment like conveyor toasters and ovens.
In 2017, Belleco was acquired by the Vollrath Company, an equipment and smallwares manufacturer for the foodservice industry located in Sheboygan, Wisc.
In semi-retirement, Roche said, he started to explore supporting manufacturing start-ups. He would tour the business park to view progress on any developments that were taking place there.
Smaha and Barbano approached him about their development. They had leased one unit to a trucking company.
“They didn’t want to be landlords, so they asked me if I’d be interested in purchasing the unit,” Roche said. “I’m sold on what they’re doing” as developers of business condo units.
Now, he said, he’s exploring further investment in additional commercial condo units in the development in order to start a manufacturing incubator for Saco, perhaps in the wind energy sector. He said he sees the Baha LLC development as a great spot for that.
“A lot of people who work out of their garage or have a small mill space can’t afford to rent a 5,000- or 10,000-square-foot facility, let alone own one,” Roche said. “So my goal is to offer 1,200 to 1,400 square feet up to maybe 2,000 square feet, with high bay doors, to do manufacturing.”
Opportunity Zone
Roche said he considers the development to be ideally situated along a stretch of Route 1 that was selected in 2018 as one of Maine's 32 Opportunity Zones.
The economic development program, established under the Tax Cuts and Jobs Act of 2017, provides a federal tax incentive for investors who put unrealized capital gains into Opportunity Funds for specific zones. The program is designed to spur investment in under-developed areas, including both property and business.
As a former city councilor, Roche said he appreciated the work put in by the city of Saco and special projects coordinator Brandon Pettit to apply to be an Opportunity Zone.
In a separate transaction that closed Nov. 12, Baha LLC sold two more of its commercial flex condo units to DSO LLC for $385,000. Michael Anderson of Malone Commercial Brokers brokered the transaction.
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