🔒Taking it to the bank: Big developments in Maine depend on a little-known inspection company

When Ron Milley, president and CEO of Consultant Services New England, took over the company in 2015, he had 18 clients. Six years later, as he and COO John Weeks try to count how many projects the Kennebunk-based firm has been involved in, they can’t come up with an exact number of clients. But Milley says business has increased sevenfold.

CSC New England’s clients have been developers of the Lincoln Mill in Biddeford and the major Portland development that will house the Covetrus headquarters and Shipyard Brewing Co.’s “brewtel” hotel. Others have been Dunstan Crossing and Cascade residential developments by Elliot Chamberlain in Scarborough and Saco, the Downs in Scarborough and Central Maine Healthcare cancer center in Lewiston.

CSC’s role begins before shovels go into the ground and lasts until the certificate of occupancy is issued. Yet the name of the company never appears in news accounts about big projects. You won’t see Milley and Weeks wearing hard hats and wielding silver shovels with ribbons on them at a ground-breaking. CSC is one of a handful of companies in Maine that does pre-construction inspections, a vital but under-the-radar service that has boomed along with the state’s red-hot construction industry.

Since he bought the company from Ron Russo in 2015, Milley estimates he’s doubled it seven times over. According to the company’s website, CSC has represented thousands of projects with total project values exceeding $4 billion across the New England and Mid-Atlantic regions

Milley says the secret to what they do is something Russo taught him. “He told me, ‘You’re there to observe.’ I sit and listen and see what’s going on.”

A relationship business

Simply put, CSC’s job is to make sure a developer has the financial foundation to do a project before a bank will lend the money, and then to monitor the process to make sure the money is being spent the way it’s supposed to. The bank hires CSC, the developer pays for the service. The company also has an increasing amount of business in pre-sale inspections for real estate brokers.

“It’s a relationship business,” says Joe Delano, senior vice president of commercial lending at Bar Harbor Bank & Trust. He says Milley and his team make the relationship between the bank and developer work.

Delano says that commercial real estate lending is high-risk, and when banks are putting tens of millions into it, they have to keep an eye on where the money is going.

The FDIC, in recognition of the high risks of commercial real estate lending, has guidance for lenders that stresses careful and regular monitoring of borrowers’ projects, including and independent assessment before and during construction. The focus grew after the 2008-09 recession, as the housing industry collapsed, and has increased as commercial development has boomed.

Delano says that CSC’s role is vital considering the risks of commercial development and the large amount of money involved.

“We do a lot of commercial lending and quite a bit for construction of large projects,” Delano says. Bankers don’t have the time or technical experience to be on job sites monitoring what’s going on.

“Ron’s role, in a large part, is to protect the bank,” he says. It’s important to both developers and the bank to get the financing, and the project, done on time while meeting regulations and hitting a budget.

While it’s the bank that hires the pre-inspection firm, developers also have a stake.

Developers and banking combined

Developer Nathan Bateman, Bateman Partners vice president, said speed and accuracy are important with the monitoring that continues until a development is finished. Bateman, the developer behind 86 Newbury St., the Covetrus-Shipyard project, as well as Central Maine Healthcare’s Lewiston cancer center, has been a CSC client since Milley bought the company.

“CSC must sign off on all construction expenditures and ensure all appropriate lien waivers are signed from the contractor and subcontractor,” Bateman says. That work is crucial to how the developer operates. “Because a contractor bills once a month, speed is important to get them paid and the subs paid as quickly as possible.”

Milley’s roots are in construction. He worked for his father’s demolition business before branching out, and had contacts with many developers. He says that’s part of the key to the company’s ability to connect with both developers and banks. The other key is the addition of Weeks in January 2020.

Weeks, a former banker, fills a need that has developed as construction, and how banks approach lending for it, has evolved in recent years. Most of the preconstruction reports cover the hard costs, but banks have also become more interested in the soft ones. That led to Weeks joining the company.

The detailed financial report banks increasingly seek “is where John’s expertise comes in,” Milley says.

Weeks worked for MBNA for 15 years, then Webster Bank in Connecticut, with different roles that positioned him for what he does now. “I saw what was important to the customer, and I saw what was important to the bank,” Weeks says.

Problem solvers

Bar Harbor Bank & Trust has financed developments using CSC for seven or eight years, Delano says. Recent ones are the Aloft Hotel in Portland, the 256-unit Latitude at South Portland apartments development and several projects at the Downs in Scarborough.

Delano says that construction delays and issues that drive up costs with big projects are inevitable, but the bank relies on CSC to assess them properly.

“Ron knows when to flag things, knows when to push things,” says Delano. “But he doesn’t overreact,” he says.

The company is also popular with commercial real estate brokers looking for pre-sale inspections.

Justin Lamontagne, of NAI The Dunham Group, says that he sees the CSC team as problem solvers.

“They don’t just identify an issue and panic,” Lamontagne says. “They identify issues, or potential issues, and explain a path to resolution. Whether they are working for an existing property owner or a potential buyer, their approach is educational and calming.”

He recently toured an industrial building with a buyer and Weeks. “The buyer was so impressed by the breadth of knowledge he showed for this mixed-use building,” Lamontagne. “We rarely sell a brand-new, perfect building, so to understand how to navigate whatever deferred maintenance we inevitably find is invaluable.”

Small crew, big projects

When Milley took over the company, Russo told him he could double its size if he made connections.

“I thought it was pie in the sky,” Milley says.

But the doubling came in the first year, and every year since.

At first, CSC was a one-man show. Things began picking up when he hired project manager Terry Place. It’s now a seven-person team.

While that may not seem like a big crew, besides the 211,000-square-foot 86 Newbury development, CSC has been involved in almost all the recent projects on Portland’s eastern waterfront, including 0 Thames, the WEX Inc. headquarters, and WEX’s 100 Fore St. office building.

It has done inspection reports for most of the hotels recently built or under construction in southern Maine, including the recently opened Canopy by Hilton in Portland.

CSC also monitors developer Jim Howard’s Brunswick Landing projects. The latest by Howard’s Priority Real Estate Group is the under-construction 20,157-square-foot building for software company Vivid Cloud.

The company also works with Avesta and other affordable housing developers, including the 58 Boyd St. development in Portland, and Szanton Co’s Hartley Block in Lewiston, as well as the Portland Housing Authority’s projects.

While CSC may be under the radar, the principals feel a connection to their jobs. When Milley and Weeks talked to Mainebiz, they were buzzing about the 230,000-square-foot Lincoln Mill redevelopment, in Biddeford by Chinburg Properties and Tim Harrington, of Kennebunk. The $50 million redevelopment includes 148 luxury apartments, a 33-room hotel, a rooftop bar with a pool, restaurant and retail space and is due to open soon.

“A historic mill with a swimming pool on the roof,” Weeks says. “It’s just incredible what they’re doing. That mix of history and modern.”

But they also speak glowingly of single-family home projects. All of them, big and small, are basically the same, just different in scale, they say.

“We approach it as, ‘This is what it is,’” says Weeks, no matter who the client or developer is. “These are the facts. Here you go.”