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February 18, 2020 at 7:29 am · · Comments Off on The Risks and Regulations Associated with Waterfront Development in Maine

The Risks and Regulations Associated with Waterfront Development in Maine

By  Gordon Smith, Verrill

Waterfront development in Maine is on the rise. While waterfront development has a big investment upside, it can pose additional regulatory challenges and risks. Whether you are building on coastal or inland waters, shorefront property is subject to an array of federal, state, and local environmental and land-use controls. Here is a look at the regulatory requirements that could be triggered by shorefront development activities, including:

  • New construction, replacement or enlargement of commercial buildings, houses, and other structures
  • Construction of docks, piers, revetments, and seawalls
  • Road building and stream crossings

Regulatory Requirements:

State-Mandated Municipal Shoreland Zoning. Any land in a municipality that is within 250 feet of the ocean, a pond, river, or large wetland, or is within 75 feet of a stream, is subject to shoreland zoning permitting and regulation. These rules are state-mandated but are administered by municipalities. Permits are issued by a town’s code enforcement officer or by its planning board, depending on the intensity of the activity. Municipalities can also enact independent and more stringent shoreland requirements beyond those imposed by the state. Within the shoreland zone:

  • All commercial structures and uses require planning board approval (and are prohibited outright in certain shoreland districts)
  • Locating a commercial enterprise on land that is currently used for any other purpose requires planning board approval, even when there is no alteration of structures
  • Maintenance and clearing of trees and other vegetation is subject to a variety of restrictions, including a 25% lot area cap on cleared openings for any purpose

Maine Department of Environmental Protection (DEP) Permitting. Any activity that takes place “in, on, over” or within 75 feet of a coastal wetland (any land touched by saltwater, including coastal sand dunes), great pond (10 acres or larger), river, stream, and some freshwater wetlands requires a Natural Resources Protection Act (NRPA) permit from the DEP. Almost any alteration in these areas requires NRPA approval, including any displacement of soil, sand, vegetation, any placement of fill, and any construction, repair or alteration of a permanent structure. To obtain a NRPA permit, an applicant must show, among other things, that:

  • There is no practicable alternative to the proposed work
  • The project will not result in an unreasonable impact
  • Compensation will be provided for loss of resource values

For certain categories of activities that trigger NRPA but are likely to result in de minimus impacts, the DEP applies a presumption that the work complies with NRPA permitting standards. For such activities a streamlined permit-by-rule process is available.

Federal Permitting. There are two types of activity in coastal and shoreland areas that could require a permit from the U.S. Army Corps of Engineers. Any structure placed either permanently or temporarily in “navigable waters” requires a permit under section 10 of the U.S. Rivers and Harbors Act (typically called a “Section 10 permit”). A navigable water is mostly what it sounds like (it’s big enough to fit a boat), and is defined by regulation as “waters that are subject to the ebb and flow of the tide, and those inland waters that are presently used, or have been used in the past, or may be susceptible for use to transport interstate or foreign commerce while the waterway is in its ordinary condition at the time of statehood.” For non-tidal waters, determining whether that general definition applies to a particular waterbody requires reference to additional regulations and case law. Examples of structures that could trigger section 10 include piers, docks, bridge abutments, transmission lines, retaining walls, and revetments located on intertidal or submerged land.

In addition, any deposit of material (usually placement of fill) in “waters of the United States” requires a permit under Section 404 of the U.S. Clean Water Act (typically called a “404 permit”). The exact definition of “waters of the United States” has been subject to decades of rulemaking and litigation, but it is quite broad and as a practical matter it includes almost all wetlands in the state.

FEMA Floodplain Permitting and Insurance. Many municipalities in Maine have adopted floodplain management ordinances in order for property owners to be eligible for subsidized flood insurance through the Federal Emergency Management Agency (FEMA). (Whether the federal government should be subsidizing construction in flood-prone areas is another question.) If your development is in such a municipality, any new work that takes place in a mapped floodplain requires a permit. FEMA is close to completing a lengthy process of updating its floodplain maps in Maine. If you are contemplating obtaining flood insurance (a matter of concern as sea level rises and storm cycles intensify), there may be an opportunity to get grandfathered into lower rates associated with previous mapping.

Prior to pursuing any coastal or shoreland development, work with an attorney to first identify what regulations you might be subject to and how best to mitigate risk in the process.

February 11, 2020 at 7:01 am · · Comments Off on Stop me if you’ve heard this before

Stop me if you’ve heard this before

by Justin Lamontagne, CCIM, SIOR, Partner, Designated Broker at NAI The Dunham Group

Is it plagiarism if you copy yourself? I hope not, because here goes…

“Vacancy rates are getting critically low. As the economy improves, Maine’s small and medium sized businesses are growing accordingly. Add to that new-to-market industries like craft brewing and medicinal marijuana cultivation, and the pressures on end-users have never been higher.”

I wrote that in 2015 when the vacancy rate was in the 4-5% range. Flash forward five years and the strains on industrial tenants and buyers are even greater. Indeed, our overall vacancy rate has dropped below 2%, which is staggeringly inhibitive to business growth and relocation needs. I called this an economic development issue in the past and I still believe it. We have worked with several great companies in recent years whose growth was slowed (though not necessarily stopped) by lack of bricks and mortar. Companies are figuring out band-aid solutions like multiple smaller locations and shorter-term lease commitments. Others are choosing the very expensive route of new construction.

Speaking of new construction; “while there are obvious advantages to building new (ideal layout and design, energy efficiencies, etc.), the cost still doesn’t compete with existing inventory. That gap, however, is shrinking as sale price per square foot continues to increase.”

That beautiful bit of prose was written by yours-truly in 2016 when average sales prices on existing property were hovering near $55/sf and replacement costs were under $100/sf. This year, our average sales prices have soared to $70/sf and peaking at or higher than $100/sf for prime locations and specialty buildings. However, a “gap” remains as construction costs have also continued to precipitously rise. Cost estimates range greatly based on site work, design, materials, etc. But, for the most part, we are coaching our clients interested in building new to plan on $125-$145/sf for ground-up development.

2016 was also the first year we saw real “speculative investment” in the industrial market. I wrote, “developers and investors, recognizing the high cost of construction but stable lease rates, are buying empty buildings with the goal of leasing them out.” This trend continues into 2020, as owner/users are still competing with investors for any sale inventory we can get our hands on. In years past, occupants were always the best positioned to win these competitions as banks were bullish to lend to a sure thing. However, in 2019, we saw the influence of all-cash and 1031-Exchange offers. Sellers were, of course, happy to avoid a leveraged due diligence period.

Whether you are a tenant or buyer, the best advice I can share holds true to what I first wrote in 2015, “Our experience in representing tenants and buyers in this market has changed dramatically since the recession. Today, I am advising my clients to budget for more time, and to allow for compromise in infrastructure and location. At the same time, be ready to jump when opportunity arises and be willing to pay a premium to win a deal.” Well said, Justin.

And while I’m patting myself on the back, I nailed this prediction in 2018; “I anticipate further industrial construction and absorption in the coming year. And because industrially zoned land is limited, I also expect interest in repositioning and redevelopment of existing buildings.” In 2019 we saw several new construction projects (although, I would argue, not enough) as well as major redevelopment projects of older industrial stock. I see no reason that trend won’t continue, particularly with the newly added Scarborough Downs Innovation District. This is an incredible swath of developable land, 154 acres just off I-95, Exit 42. It is precisely the type of splash Greater Portland needs in terms of new, industrially zoned land.

I have been studying the Southern Maine industrial market for over ten years now. There have been some fascinating trends and changes. But the overarching theme has been consistent. We are in a historical bull-market, with few signs of material change to come in 2020.

So that’s my story…and I’m sticking to it.

Justin Lamontagne, CCIM, SIOR
Partner | Designated Broker
NAI The Dunham Group

January 28, 2020 at 7:10 am · · Comments Off on Maine Real Estate & Development Association (MEREDA) Recognizes Outstanding Members with Annual Awards

Maine Real Estate & Development Association (MEREDA) Recognizes Outstanding Members with Annual Awards

Portland, ME: In a ballroom overflowing with the broad spectrum of Maine’s real estate and development professionals, MEREDA President Gary Vogel singled out five individuals at last week’s annual Forecast Conference. If tasked with building a structure, this quintet certainly would be qualified to do so: an architect, an interiors expert, a City planner, a lawyer and an artisan took the stage. Instead of an assignment, Vogel handed out MEREDA’s Annual Awards to this group responsible for significant and lasting contribution of responsible real estate development in Maine in 2019.

Brian Curley, President of CHA Architecture, received the 2019 Robert B. Patterson, Jr. Founders’ Award, recognizing his distinguished contributions and support of MEREDA as a highly effective volunteer, providing significant leadership and guidance. An active and enthusiastic member of MEREDA’s Board of Directors from 2011 to 2019, Curley served as vice president for four of those years; he also served on the Executive and Conference Committees.

MEREDA awarded this year’s President’s Award to Bruce Jones, recently retired from Creative Office Pavilion, and the MEREDA Board in December of 2019. MEREDA relies heavily on its volunteer board and committee members, and Vogel singled out Jones as an exceptionally dedicated volunteer who contributed with energy on every level. Since joining MEREDA in 2010, Bruce served on the Board of Directors for seven years, as the Vice President for four years, co-chaired the Conference Committee, and served on the Executive Committee.

Each year, MEREDA presents the Public Policy award to an individual whose efforts have had a considerable impact on public policy changes to benefit responsible real estate development in Maine. Jeff Levine, Adjunct Faculty at the Muskie School and MIT, Department of Urban Studies and Planning, took home the 2019 Public Policy award. From his willingness to present at numerous MEREDA events, to his passionate and diligent work on the behalf of the City of Portland, this award is certainly well-deserved.

The Volunteer of the Year Award is given by MEREDA’s current President to those who selflessly and tirelessly give their time, talents, and energy to MEREDA and its efforts. In recognition of their invaluable work on MEREDA’s 2019 Spring Conference, Shannon Richards of Hay Runner and Matt Worthen of Eaton Peabody shared this year’s Award. Shannon and Matt spearheaded the development of the 2019 Spring Conference, which fostered a thought-provoking discussion around the future of housing in Maine. The duo also served as the program’s moderators.

MEREDA congratulates these five outstanding members, and thanks every volunteer whose contributions of time and talent make the association’s continued success possible.

Gary Vogel, MEREDA President, Jeff Levine, Adjunct Faculty at the Muskie School and MIT, Department of Urban Studies and Planning, Shelly R. Clark, MEREDA Vice President of Operations, Matt Worthen, Eaton Peabody, Shannon Richards, Hay Runner, Bruce Jones, recently retired from Creative Office Pavilion, and Brian Curley, CHA Architecture.

January 21, 2020 at 6:41 am · · Comments Off on “Outlook Good”: MEREDA’s Forecast Conference Calls for Continued Growth

“Outlook Good”: MEREDA’s Forecast Conference Calls for Continued Growth

Over 900 of Maine’s real estate and development professionals converged on the Holiday Inn by the Bay Thursday, each one on the hunt for the latest and greatest industry information and connections. “Anyone who stayed in the office is going to have a very quiet day without much activity by phone or email,” quipped MEREDA’s president, Gary Vogel, “Today, it’s all happening here!”

An all-star lineup of speakers proved Vogel a prophet, providing promising forecasts and reports on Maine markets from Bangor to Kittery. This year saw the addition of a York County Forecast to the conference agenda, hinting at an underlying theme: the growing importance of secondary and tertiary markets in Maine. Areas such as York County, Lewiston-Auburn, and Saco- Biddeford are experiencing substantial popularity and growth, particularly as the Portland
market wrestles with the dichotomy of maximum occupancy and costly construction.

With the “NO” on the proverbial “VACANCY” sign almost constantly illuminated in Portland’s finished spaces, investors and businesses are choosing to renovate Maine’s more senior structures, reinvigorating and repurposing them to meet modern demands. Nearly all experts in attendance promised the trend of mill restoration to continue into 2020, as suburban communities seek to imbue new life to these historic hubs. Presenting the Southern Maine Industrial Forecast, Justin Lamontagne of NAI The Dunham Group spun the phrase “Innovation District” to describe this attitude of persistence in prosperity inspiring Portland’s suburbs.

This theme of innovative spirit echoed Commissioner Heather Johnson’s keynote address at the conference, concentrating on the 10 Year Economic Plan, recently unveiled by Governor Mills’ administration. Even with the snow falling heavily outside the Holiday Inn, Commissioner Johnson’s outlook was a sunny one; Augusta’s confidence in the state’s ability to continue attracting young families and budding professional talent to all communities remains high. Continuing in the theme of locality, Andrea Cianchette Maker introduced MEREDA’s new Local Issues Committee, intended to provide a degree of agility and responsiveness to development matters at a municipal level.

With Maine recently ranked #4 on a global list of destinations, Vacationland is guaranteed to own its nickname in the coming year. However, as beautifully-repurposed spaces build beautifully-reinvigorated communities and promise high qualities of living, the forecast for Maine trends less towards its worth for a visit, and more towards its worth for a lifetime.

December 24, 2019 at 7:10 am · · Comments Off on Safe Harbor Options for Taxpayers as the Solar ITC Begins to Sunset

Safe Harbor Options for Taxpayers as the Solar ITC Begins to Sunset

By Mark Vitello, BerryDunn

Read this if you are a solar investor, developer, or installer.

The solar carve out of the Investment Tax Credit (ITC) has been a great incentive for taxpayers to invest in solar assets over the last several years. It established an increased 30% tax credit for solar assets placed in service, up from the normal 10%.

Starting January 1, 2020, the solar carve out will begin to phase out and will return to 10% by January 1, 2024. 

With the first phase-out of the ITC set to drop the credit from 30% to 26% after December 31, 2019, many taxpayers are evaluating ways to make sure their project still qualifies for the 30% credit. The IRS has issued two safe harbor provisions (IRS Notice 2018-59) to allow for projects placed in service after December 31, 2019 and before January 1, 2024 to still qualify for the 30% credit, but timing is key and certain actions must be taken before midnight on December 31, 2019.

Safe harbor methods

The two safe harbor methods are the Physical Work Test and the Five Percent of Cost Test. If a project satisfies either of these tests it can still qualify for the 30% tax credit as long as it is completed and in service before January 1, 2024.

The Physical Work Test requires that the taxpayer performs, or has performed on their behalf, “work of a significant nature” on the project prior to December 31, 2019. This is a little open to interpretation, but generally involves physical construction of the asset, such as the installation of mounting equipment, rails, racking, inverters, or even the panels themselves. Purchasing of equipment generally held in inventory by either the taxpayer or the vendor does not qualify. However, if the equipment is customized or specially designed for the specific project, it might. Preliminary activities do not qualify, which include planning, designing, surveying, and permitting.

In general, the purpose of this test is to prove that construction has already begun, and is in place to help projects that have been started but won’t be in service before year end still maintain the 30% tax credit. Projects that are substantially complete and waiting for an interconnection or a permission to operate in order to be considered as in service will most easily qualify for this safe harbor test.

The Five Percent of Cost Test is a little more straightforward, and is likely to be more commonly used to qualify projects for the safe harbor provision as the end of the year deadline approaches. This test requires at least five percent of the total project cost be paid or incurred before December 31, 2019. It is important to note that the denominator in this test is the final total cost of the project when it goes in service. The taxpayer may wish to pay more than the five percent to account for project overruns or unanticipated changes to the project in order to make sure they maintain the qualification for safe harbor.

Another consideration is if the taxpayer files on the cash or accrual method as to whether the project cost needs to be paid or incurred in order to satisfy the chosen filing method.

In either case, the taxpayer should also evaluate the cost of prepaying for equipment that may decrease in cost in the future, compared to the benefit they will receive in maintaining the additional four percent of the tax credit that can safe harbor from the phase out.

Additionally, an analysis of total project costs and eligible vs. ineligible ITC costs early on in project development can help identify how best to spend the cash before the end of the year, and ensure that the taxpayer receives the return they require once the project goes into service.

Have questions?

If you have questions on these safe harbors or need more information, please contact the green tax experts on our renewable energy team.

Article originally published on November 12, 2019, https://www.berrydunn.com/blog/safe-harbor-options-for-taxpayers-as-the-solar-itc-begins-to-sunset


December 17, 2019 at 7:15 am · · Comments Off on Perceptions of Housing in Maine

Perceptions of Housing in Maine

By:  MaineHousing Staff

Housing is a hot topic these days – from affordable housing challenges across Maine, to having enough housing for our communities and businesses to thrive, for aging Mainers, and everything in between. And no wonder – housing is key to stability and well-being.

And key to our ability to effectively address housing challenges, we need to understand what Maine people think about housing – and what they want. Through a partnership with the Portland Research Group, Inc., MaineHousing commissioned the Perceptions of Housing in Maine survey, which focused on how Mainers view the condition, affordability and location of their homes.

Mainers are mostly satisfied with their housing

By and large, most Mainers are satisfied with their housing – and want to stay in Maine. Of the 1,758 households contacted, 75% were satisfied with location of their home and over 60% were satisfied with its affordability and condition. Those who are significantly satisfied with the location of their home are by and large in southern, coastal areas of Maine.

However, not all those who are satisfied with housing live in the more populated southern, coastal Maine regions. Mainers living in northern Maine feel as though the housing market matches what they want. Despite having the oldest population in the nation with some of the oldest housing stock – much of which is in rural areas, Aroostook County homeowners are significantly more likely than other Mainers to believe that their community’s housing options meet their needs and the needs of their community.

We were interested in what Mainers who want to move want out of their homes and communities. Half of survey respondents who want to move – regardless of age – want to be closer to services and other amenities such as stores, medical services, work, transportation, and recreation. Having a smaller, more affordable home was the second most cited reason for moving. Additionally, many who want to move wish to be closer to the southern coast. And, of survey respondents who want to move, nearly 20% of them want to leave Maine.

Affordability is a concern

Very few respondents who would like to move feel it has gotten easier to find quality, affordable housing. Given that Maine is second in the nation in homeownership rates, it wasn’t surprising that survey respondents significantly value homeownership. A majority of survey respondents prefer to own their home – and cite rental costs as a key factor.

Renters tend to spend more on rent than homeowners spend on mortgage payments. Renters are also significantly more likely than owners to need additional employment to afford housing – especially those 18-40 years old. Younger respondents are also more likely to have had to skip a mortgage or rent payment. As one might expect, households earning less than $35,000 a year are significantly more likely to have found additional employment or to have skipped a rent or mortgage payment than respondents in other income brackets.

Eviction and foreclosure were the leading causes for the 12% of all survey respondents who had lost their primary residence in the last ten years. As we continue to address Mainers’ housing needs, it’s clear that affordability continues to be a challenge for many – even those at higher income levels.

Mainers want a decrease in property taxes, more energy efficiency incentives

When we asked respondents to rate various government initiatives’ effectiveness on housing affordability, the top three were decreasing property taxes, providing energy efficiency incentives, and heating assistance.

Understanding Mainers’ housing preferences is important for the development of quality and effective housing policy in Maine. This survey data adds important information to the range of policy and program choices we need to make as we work toward ensuring that all Mainers have access to safe housing they can afford.

December 10, 2019 at 6:00 am · · Comments Off on The Right Equation for Responsible Development: Spotlight on the Motherhouse

The Right Equation for Responsible Development: Spotlight on the Motherhouse

In multi-part series, exclusive to the Maine Real Estate Insider, we’ll provide an up-close look at the most notable commercial development projects of the past year that are helping to fuel Maine’s economy in terms of investment and job creation.  MEREDA is proud to recognize responsible development based upon criteria including environmental sustainability, economic impact, energy efficiency, difficulty of the development, uniqueness, social impact and job creation.

Please join with us in celebrating The Motherhouse in Portland.

MEREDA:  Describe the building and project.

The Motherhouse:  The Motherhouse is a structure built as a convent for the Sisters of Mercy, most of which was completed in 1909.  It’s about 140,000 square feet and we redeveloped most of that, about 115,000 square feet, into 88 apartments.  The apartments are for seniors 55+ and are a mix of affordable and market-rate.  It was financed through a combination of state and federal historic tax credit equity, federal housing tax credit equity from MaineHousing, HOME funds from the city, a tax increment financing package, and some developer capital, as well as several different kinds of debt, also from MaineHousing.

MEREDA:  What was the impetus for this project?

The Motherhouse:  Over time it had become clear that the Motherhouse was the key to the entire campus redevelopment.  Not only is it the most prominent feature of the 20-acre campus, but it was in many ways the most difficult to redevelop. We knew that we would not be able to achieve a feasible master plan without taking on the Motherhouse first.  Affordable housing made sense since we do a lot of that – the rest of the campus was planned to be market rate – and the available sources for affordable housing pair well with the historic tax credits, so we took a shot.  We ended up having to apply twice and just barely were able to pull a complicated budget together.  We then took a little break as somebody decided to sue the City over their rezone of the property, so once that was disposed of, we could finally proceed.

MEREDA:  That sounds like quite a process.  How long were you in the planning stages before construction started?

The Motherhouse:  Developers Collaborative had been working with the initial developer, Seacoast Management, for a couple years on various redevelopment options. Seacoast had been working on it for much longer, well over a decade.  Seacoast actually had an entirely different development plan they put quite a bit of effort into around 2007, but we all know what happened then.  All told I would say DC had 3 years of constant effort to put the project together and get it to construction.

MEREDA:  Tell us about the most challenging aspect of getting this project completed.

The Motherhouse:  It was making the construction budget work with the sources we had available.  The City and MaineHousing really stepped up and helped out to fill the last bit of the gap, but most of the other sources, namely the tax credits, are a function of the costs, so you can back into the amount the budget has to be.  The initial estimates we received were way beyond what we had available. We ended up choosing to work with Portland Builders on the project and it was definitely the right decision.  I think we cut probably 20% out of the budget without losing any scope to speak of, and I am not sure who else could have pulled that off.

MEREDA:  Something unexpected you learned along the way was….

The blower door test was interesting.  It’s amazing how many holes there can be in a large five story century old building.  Chasing them all down and plugging them was quite an endeavor, but we got there in the end.

We also learned a lot as a management company.  It was our first lease up of one of our affordable properties, and our largest.  So, there was a learning curve there and it was impressive to see our team respond.  The great thing about all that was that in the midst of that activity – I won’t use the word chaos – they were able to create community almost instantly.  It’s a really warm, welcoming place today and the biggest reason for that is not the architecture or the financing.  It’s the people that live there and the folks that staff it.  As a developer I think I learned a lot from my team about how they create community, in ways that go beyond good design, good planning and programming, etc.

MEREDA:  Now that it’s complete, what feature of the project do you think makes it the most notable? 

The Motherhouse:  Well, the gold dome is certainly the most recognizable – I often see it when I’m coming into PWM on a flight.  But it’s the interior common spaces that to me are architecturally more interesting.  With historic buildings, you have let the spaces tell you what they want to be – Archetype Architects is great at that.  We have some really jaw-dropping spaces inside that simply can’t be built today.  That’s certainly a part of the community that we’ve been able to create – our residents are as proud of the building as we are.


December 3, 2019 at 8:00 am · · Comments Off on Environmental DNA (eDNA): What is eDNA and How Can it Benefit the Development Community

Environmental DNA (eDNA): What is eDNA and How Can it Benefit the Development Community

By Gabe Pelletier, Project Technician and Jake Riley, Associate, Stantec

What do human beings, Zebra mussels, and Atlantic salmon have in common? They all contain deoxyribonucleic acid (DNA) in each cell. DNA is the molecule that contains the genetic code for each organism. All living organisms expel this unique genetic material into their environment, and we call this material “environmental DNA” (eDNA). Currently our planet is facing a biodiversity challenge with regards to rare, threatened, and endangered species and a simultaneous increasing threat of invasive species. Maine has a combination of approximately 60 State and Federally listed threatened and endangered animal and invertebrate species. When considering the development of a property or project, the planning process may require studies to determine if these species could be affected. Presence of these species could require permitting, compensation for impacts to habitat, or costly changes to project plans. Now, more than ever, it’s increasingly important to find effective, rapid, and efficient ways to monitor where these species are to meet regulatory requirements for protection, as well as to design projects that reduce or avoid impacts to protected species and manage invasive species.

In aquatic settings, fish and other aquatic species (e.g. amphibians) shed eDNA through the skin, feces, urine, blood, body, eggs, or sperm into the water they inhabit. eDNA emitted from species can be detected by filtering a water sample taken directly from a water body, extracting the eDNA, and the eDNA is analyzed to detect the presence of a specific target species.

How does eDNA stack up against more conventional methods for observing and detecting aquatic species, such as trapping, netting, and/or electrofishing? In short, conventional methods may take additional time, be more expensive, and could harm rare species and their habitat while requiring a state collection permit. Conventional sampling techniques often require a visual detection of the target species to determine presence versus a positive detection from the presence of the target species eDNA.. This eDNA survey technique can extend the survey season, make it possible to survey migratory species, survey vernal pools outside the spring breeding window, survey for elusive species and species at low densities, and survey life stages (e.g. eggs, larvae) and in conditions not previously possible with conventional equipment. Utilizing eDNA, biologists can prolong the traditional surveying period allowing for a larger sample size and a longer sampling season at potentially a lower cost to the developer.

Detecting eDNA in the aquatic environment depends on several factors when setting up a sampling design. The strength of the eDNA signal will depend on how recent the target species was present and how long the species was there. Population density and lifecycle stage also influence how much eDNA is present in the water body. Lastly, the volume and flow rate of the aquatic environment plays an important role for dictating the sampling design. Whereas a small pond or lake will likely hold eDNA longer, a running river is more likely to transfer remnant eDNA downstream.

The future for eDNA is bright and the applications are seemingly endless. Here in Maine we face environmental concerns not only in our inland and coastal water bodies, but also in rural and urban ecosystems. Using this new technology, tests are continuously being developed for aquatic species as well as expand to terrestrial species. The enthusiasm isn’t only in the scientific world, however, as this new surveying tool offers a way for developers to meet their regulatory requirements effectively and efficiently while reducing costs and avoiding harmful impacts to rare species.

Gabe Pelletier, Project Technician and Jake Riley, Associate can be reached by contacting Stantec’s Topsham, Maine office.

November 12, 2019 at 7:19 am · · Comments Off on Maine’s Coming Solar Expansion

Maine’s Coming Solar Expansion

On October 29th, a panel of experts gathered in Bangor to participate in MEREDA’s Morning Menu Breakfast event titled, “What You Need to Know about Investing in Solar in Maine”.  Panelist Vaughan Woodruff of Insource Renewables provides us with this overview of what may lie ahead for solar in Maine.

By:  Vaughan Woodruff, CEO | Founder, Insource Renewables

As a result of the 2019 legislative session, Maine now has perhaps the hottest solar market in the country. Dozens of developers have converged on Maine to expand a market that is expected to attract more than one billion dollars of direct investment over the next 5 years. Commercial and residential real estate brokers, farmers, large institutions, and other landowners across Maine have become acutely aware that something has shifted in Maine, as many have been inundated with calls from solar developers seeking sites for prospective solar projects.

There is an imperative for developers to secure land as quickly as possible – application queues are beginning to form at Central Maine Power and Emera Maine for projects that might not be built for years. The goal for solar developers is to be as close to the head of the line as possible to avoid incurring additional costs associated with significant electrical grid upgrades. Having control of a viable site, typically secured through a lease option from the landowner, gives a developer the permission needed to begin qualifying a project with the utility.

The most sought-after parcel is roughly 25-35 acres in size, relatively level, accessible to three-phase service, and within reasonable vicinity of a utility substation. These characteristics are likely to minimize the costs needed to connect a five megawatt (AC) solar facility to the grid. Why is five megawatts significant? It represents the largest electrical generation facility that can provide bill credits to customers, which is the highest value that can be generated from a solar facility. Anything larger requires the owner to sell into the wholesale electricity market and deal with a more complex regulatory framework.

Once the first of these projects are constructed in late 2020 or early 2021, Maine electrical ratepayers for whom solar is not a good fit at their home or business will have another avenue to access some of the benefits of solar energy. Renters and homeowners and businesses with a shaded site or limited tax credit appetite will be able to subscribe to these shared solar projects to reduce their electricity costs.

While much of the activity in Maine’s solar market right now is focused on these speculative projects, there were a number of other significant changes related to solar energy development that will reduce barriers to solar energy for Maine businesses.

Tax certainty. Prior to this legislative session, there was uncertainty regarding the eligibility of solar investments for Maine’s Business Equipment Tax Exemption (BETE) program. To clarify the tax treatment of solar investments, the legislature passed LD 1430 – An Act To Create Tax Equity Among Renewable Energy Investments. As a result, businesses (and residents) utilizing solar to offset their electricity bills will not be required to pay property taxes on solar equipment that could undercut the economics of their investment.

Credit certainty. Historically, Maine utilized a simple practice called net energy billing that has been used by a large majority of states across the country. In 2017, the Maine Public Utilities Commission enacted a change that required Maine ratepayers to pay for additional meters to reduce the credits to solar facilities. The program would prove to be a bad deal for ratepayers. This year, the Maine legislature corrected the problem by reinstating net energy billing. Businesses considering solar are now assured they will receive a full credit for the energy they generate.

Rate certainty. Medium or large electricity consumers are required to pay a demand charge as part of the utility rate structure. Demand charges are measured in kilowatts and represents the peak power demand in a month. Net energy billing provides energy credits in kilowatt-hours, which represents the volume of energy used in a month. Demand charges typically represent at least 40% of the electricity costs for these businesses. Since energy credits can’t be applied towards demand charges, many commercial solar investments have not been cost effective and Maine businesses have been at a disadvantage with competitors in other states that have figured out how to effectively compensate commercial solar investments. In 2019, the legislature developed a method to compensate businesses with monetary credits rather than energy credits. The monetary credits can be applied to all electricity costs, include demand charges.

With the federal investment tax credit for solar slated to stepdown from 30% in 2019 to 26% in 2020 and 22% in 2021, these changes are happening just in time for Maine businesses to leverage the maximum tax credit benefit for their solar investment. By committing to a solar investment before the end of 2019, Maine businesses can safe harbor the full 30% tax credit for projects built in 2020 and beyond.

November 5, 2019 at 6:57 am · · Comments Off on The Right Equation for Responsible Development: Spotlight on the Ballard Center

The Right Equation for Responsible Development: Spotlight on the Ballard Center

In multi-part series, exclusive to the Maine Real Estate Insider, we’ll provide an up-close look at the most notable commercial development projects of the past year that are helping to fuel Maine’s economy in terms of investment and job creation.  MEREDA is proud to recognize responsible development based upon criteria including environmental sustainability, economic impact, energy efficiency, difficulty of the development, uniqueness, social impact and job creation.

Please join with us in celebrating the Ballard Center in Augusta.


MEREDA:  Describe the building and project.

Dirigo Capital Advisors:  The Ballard Center was formally the location of Maine General Medical Center, a regional health care organization serving Central Maine.  The hospital, after 111 years of continuous operations at the site, elected to consolidate operations with their Waterville affiliate.  This new $330 million facility in North Augusta left MGMC with a tough choice – what to do with the existing 250,000 square foot, 20 acre facility located in the heart of Augusta’s East side on the Kennebec River.  In 2013, Dirigo Capital Advisors purchased the building through an affiliate, and began the long process of repurposing this unique facility.  Five years later, the project is a success with nearly 70% of the building occupied with health care, education and financial services tenants. 

MEREDA:  What was the impetus for this project?   

Dirigo Capital Advisors:  Maine General called upon us because we have a specific skillset in redeveloping difficult properties.  They did not want to see it torn down and felt we were best suited to take on this difficult undertaking.

MEREDA:  That sounds like quite a process.  How long were you in the planning stages before construction started?

Dirigo Capital Advisors:  18 months.

MEREDA:  Tell us about the most challenging aspect of getting this project completed. 

Dirigo Capital Advisors:  Like any specialized building, the Ballard Center was constructed around an initial design purpose which was to deliver emergency health care.  As the area grew, the building was added on to.  By 2012, the main facility was comprised of three connected structures all built for different functional areas.  Taking that type of building – with eight operating rooms, a maternity ward and so on – and formulating a redevelopment plan that envisions an entirely new purpose – is very complicated.  Making a building built for the needs of the 1950s work for the needs of the new area is not as easy as it sounds.  Thankfully we have an exceptional partner in the City of Augusta who is supportive and helpful at every turn.

Perhaps the greatest challenge is the “big building” problem.  On the day that you buy a giant empty building you are inheriting an unknown amount of capital issues, and certainly enormous operating expenses.  There is a very, very tight time frame in which to meet objectives.  Focus, planning and execution are especially important to avoid be swallowed whole by overhead.

MEREDA:  Something unexpected you learned along the way was…. 

Dirigo Capital Advisors:  How to repurpose a former operating room, there’s no manual for that.

MEREDA:  Now that it’s complete, what feature of the project do you think makes it the most notable?  

Dirigo Capital Advisors:  It is hard to overstate the impact the alternative (demolition) plan would have had on the community.  This project has  been on the banks of the Kennebec for over a century, and its loss would have taken not only a toll on the immediate   neighborhood but also on the region as well.  The redevelopment has brought to Central Maine a renaissance of medical specialties.  The building’s redevelopment plan was specifically designed to accommodate Maine General’s planned growth in specialties like dermatology where there was zero practice before, forcing patients to Southern Maine for care.  Pediatrics are also a significant part of the footprint.  Through this project, health care options for the area have dramatically increased but at a fraction of the cost of building new.