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December 29, 2020 at 6:00 am · · Comments Off on Maine market snapshot: “Bump in the road” is a sign most Mainers have seen many times before

Maine market snapshot: “Bump in the road” is a sign most Mainers have seen many times before

by:  Sam LeGeyt, Broker, NAI The Dunham Group

“Bump in the Road” is unfortunately a sign that most Mainers have seen many times before. As Mainers we’re not uncomfortable with it, because we know that things in Maine rarely swing too far from our realm of comfort. Although there are certainly uncomfortable situations ahead, most likely in the office and retail markets, hopefully they are just bumps in the road and not major detours.

Industrial

The Maine industrial market continues to burn very HOT! Vacancy is still quite low (~2%) and lease pricing remains on the rise with new construction options topping the market around $12 per s/f NNN.

With strong online retail sales and a commitment to replenish stockpiles of inventory, materials and equipment, industrial real estate demand is steady on both the leasing and sales side.

Smaller tenants (10,000 s/f and under) are struggling to find new space prior to current expiration dates. I completed an inventory search for a client just yesterday looking for 3,000-5,000 s/f in Northern York and Southern Cumberland County and only three results populated in both for sale or for lease options. This trend is leading tenants to renew in place at much higher rents since their most recent renewal.

Sales pricing in Southern Maine is still tipping the scales at around $100 per s/f for quality class A product. Both owner users and investors are still fighting for deals and although credit scrutiny has tightened, we are still seeing owner users win deals using both traditional and SBA-504 financing.

Office

The office market in Southern Maine is on the brink of a turning point. The final impact of this pandemic is, of course, impossible to know today. However, when we look around at parking garages in downtown Portland, most aren’t even half full during a normal week day. In early February there were waiting lists in almost every single garage and lots downtown, and the lack of available parking was a major impediment of doing office deals. In late 2019 and early 2020 we saw a couple of big users sign leases in the suburbs for this reason.

The pandemic has dramatically shifted that trend. Some office users are excited to get back to the office, and some are very content to continue to work from home. But the bottom line is that long-term decision making is proving very difficult for business leaders. As a result, we are seeing a shift of leverage from landlord’s to tenant’s. Good office tenants will be held in higher regard and value as we move forward and any tenant willing to sign a long-term lease will find even more value with an educated landlord. I expect tenants to be able to demand concessions (TI allowances, free rent, etc.) that they haven’t in years, if they can prove to be a financially sound and viable tenant.

Although there is a change in leverage, we have yet to see pricing drop in the office market. Given the conditions, however, I think it’s fair to assume that will change soon.

Retail

Retail tenants are struggling locally and the uptick in online sales is hurting foot traffic for all retailers and restaurant users. Although bars and pubs are very recently allowed to reopen in Maine under Phase 4 of the reopening plan, allowed occupancies are down. And the weather is turning to winter, which will shut down outside dining that has been holding up many of our local favorites.

We very well may see a cultural change in the city of Portland and Southern Maine. With an easily walkable downtown and exciting waterfront, Portland is a city that draws tourists for food and drink style vacations. Depending on how the winter goes we may cease to have as many food and drink options as we did previously.

Not only is COVID-19 impacting these local retailers, restaurants and bars, but political questions appearing on the ballot in Portland may also have negative effects on the retail and food service industries. Particularly concerning is a $15/hour minimum wage proposal that would also require business owners to pay time and a half whenever the city or state declares a state of emergency. This proposal will very likely hurt the small businesses it set out to help.

Multifamily

Multifamily sales and opportunities in Southern Maine are still attracting investors from all over the country. Sales on four-unit buildings or less continue to move quickly as we see more and more people moving here for the quality of life and seemingly easier urban COVID-19 lifestyles versus that of a New York, Washington D.C. or Boston. The number of larger deals (4 units and over) has slowed over the past year due to a lack of inventory, although demand is still high. Lease pricing is mostly flat, although there is a flight to quality products, with most demand coming from new Mainers.

In Southern Maine we have much to be thankful for and many opportunities to be looking out for as we approach the holiday season. At the same time we have to prepare for the likely bump in the road ahead for many of us.

Sam LeGeyt is a broker on the industrial team at NAI The Dunham Group, Portland, ME.

Original article published on October 30, 2020, https://nerej.com/maine-market-snapshot-bump-in-the-road-is-a-sign-most-mainers-have-seen-many-times-before-by-sam-legeyt

 

December 15, 2020 at 6:00 am · · Comments Off on Residential Evictions and the Pandemic – Landlords Beware

Residential Evictions and the Pandemic – Landlords Beware

NOTE: This article addresses the Executive Orders, Pandemic Management Order, and CDC Order in effect on November 3, 2020. As the pandemic changes, these orders are all subject to change and this information may become outdated. Confer with your attorney when considering evicting a tenant to ensure compliance with the latest orders.

By: Bodie Colwell, Attorney with Preti Flaherty’s Creditors’ Rights & Bankruptcy Practice Group

Maine Executive Orders Relating to Evictions

On July 30, 2020, Governor Janet T. Mills signed an executive order extending the notice periods that must be given to tenants under the Maine eviction statute, 14 M.R.S. 6002. Specifically, for non-payment of rent, tenants must be given 30 days’ notice to terminate the tenancy. To terminate an at-will tenancy, tenants must be given 45 days’ notice. The 30-day notice for non-payment significantly increases the usual notice period (7-days) and may come as a surprise to many landlords.

Maine Court FED Procedures

While the state of emergency continues, landlords will need to file additional forms and provide information to tenants when commencing an eviction or forcible entry and detainer (“FED”) proceeding.  Along with the complaint, the landlord needs to include a copy of pandemic order PMO-SJC-6 (as revised on November 3,2020), a copy of the FED Information Sheet which includes details on what to expect at the hearing, and a copy of Instructions for Accessing a Court Hearing Using Google Meet.  If the landlord fails to provide the required information and forms, the court may dismiss the FED proceeding.

Additionally, there is a new procedure for FED process. The whole process from sending the initial notice to the final hearing will take more time than usual. First, there is a telephonic or video status conference. Then, the parties may participate in mediation (which can be held over video conference).  Last, the final hearing which is held in person at the courthouse. If the landlord fails to appear at the final hearing, the eviction action may be dismissed with prejudice—requiring the landlord to wait for another month of non-payment and start the whole process again.  If the tenant fails to appear and the landlord can show that the eviction is not prohibited by federal moratoria on evictions, the court may enter the FED judgment in favor of the landlord.

This procedure applies to eviction proceedings through December 31, 2020 and may be extended by court order. More information on this process is available here:

https://www.courts.maine.gov/covid19/pmo-sjc-6-rev1120.pdf

CDC Moratorium on Evictions

On September 1, 2020 the federal CDC has issued an order halting certain residential evictions. The order is currently in effect runs through December 31, 2020 (if it is not extended). The intent is to prevent evictions for non-payment of rent. The CDC order does not prohibit evictions based on (1) criminal activity by the tenant; (2) threatening health or safety of other residents; (3) damaging property; (4) violating a building code; or (5) violating any other contractual obligation (other than payment of rent) contained in the rental agreement.

The order covers any tenant that submits a declaration to their landlord. Tenants must swear that they are under an income threshold, are unable to pay full rent, and are using best efforts to make timely payments that are as close to full payment as possible. The declaration also requires that the tenant make under $99,000 a year in income, and that if evicted they would likely become homeless, need to move into a shelter or need to move into a new residence shared by other people who live in close quarters.

In order to be protected from eviction under the order, the tenant is required to submit the declaration to the landlord.  If you receive a declaration from a tenant, confer with your attorney before taking any action. There are stiff penalties for landlords who pursue eviction against a covered tenant.

Alternatives to Eviction

If the process is too slow and burdensome, landlords may consider the alternatives to bringing a FED proceeding. Namely, landlords may find coming to an agreement with a tenant and offering cash-for-keys will save the expense and time related to a FED proceeding. In that situation, the landlord may find that getting a new tenant into the property sooner is worth paying the former tenant to leave.

Bodie Colwell is an attorney with Preti Flaherty’s Creditors’ Rights & Bankruptcy practice group. Bodie helps banks and businesses recover money owed to them and represents businesses in financial distress both in and out of court.

Original article published October 23, 2020, https://www.preti.com/publications/residential-evictions-and-the-pandemic-landlords-beware/ 

December 1, 2020 at 8:00 am · · Comments Off on Residential Evictions and the Pandemic – Landlords Beware

Residential Evictions and the Pandemic – Landlords Beware

NOTE: This article addresses the Executive Orders, Pandemic Management Order, and CDC Order in effect on November 3, 2020. As the pandemic changes, these orders are all subject to change and this information may become outdated. Confer with your attorney when considering evicting a tenant to ensure compliance with the latest orders.

By: Bodie Colwell, Attorney with Preti Flaherty’s Creditors’ Rights & Bankruptcy Practice Group

Maine Executive Orders Relating to Evictions

On July 30, 2020, Governor Janet T. Mills signed an executive order extending the notice periods that must be given to tenants under the Maine eviction statute, 14 M.R.S. 6002. Specifically, for non-payment of rent, tenants must be given 30 days’ notice to terminate the tenancy. To terminate an at-will tenancy, tenants must be given 45 days’ notice. The 30-day notice for non-payment significantly increases the usual notice period (7-days) and may come as a surprise to many landlords.

Maine Court FED Procedures

While the state of emergency continues, landlords will need to file additional forms and provide information to tenants when commencing an eviction or forcible entry and detainer (“FED”) proceeding.  Along with the complaint, the landlord needs to include a copy of pandemic order PMO-SJC-6 (as revised on November 3,2020), a copy of the FED Information Sheet which includes details on what to expect at the hearing, and a copy of Instructions for Accessing a Court Hearing Using Google Meet.  If the landlord fails to provide the required information and forms, the court may dismiss the FED proceeding.

Additionally, there is a new procedure for FED process. The whole process from sending the initial notice to the final hearing will take more time than usual. First, there is a telephonic or video status conference. Then, the parties may participate in mediation (which can be held over video conference).  Last, the final hearing which is held in person at the courthouse. If the landlord fails to appear at the final hearing, the eviction action may be dismissed with prejudice—requiring the landlord to wait for another month of non-payment and start the whole process again.  If the tenant fails to appear and the landlord can show that the eviction is not prohibited by federal moratoria on evictions, the court may enter the FED judgment in favor of the landlord.

This procedure applies to eviction proceedings through December 31, 2020 and may be extended by court order. More information on this process is available here:

https://www.courts.maine.gov/covid19/pmo-sjc-6-rev1120.pdf

CDC Moratorium on Evictions

On September 1, 2020 the federal CDC has issued an order halting certain residential evictions. The order is currently in effect runs through December 31, 2020 (if it is not extended). The intent is to prevent evictions for non-payment of rent. The CDC order does not prohibit evictions based on (1) criminal activity by the tenant; (2) threatening health or safety of other residents; (3) damaging property; (4) violating a building code; or (5) violating any other contractual obligation (other than payment of rent) contained in the rental agreement.

The order covers any tenant that submits a declaration to their landlord. Tenants must swear that they are under an income threshold, are unable to pay full rent, and are using best efforts to make timely payments that are as close to full payment as possible. The declaration also requires that the tenant make under $99,000 a year in income, and that if evicted they would likely become homeless, need to move into a shelter or need to move into a new residence shared by other people who live in close quarters.

In order to be protected from eviction under the order, the tenant is required to submit the declaration to the landlord.  If you receive a declaration from a tenant, confer with your attorney before taking any action. There are stiff penalties for landlords who pursue eviction against a covered tenant.

Alternatives to Eviction

If the process is too slow and burdensome, landlords may consider the alternatives to bringing a FED proceeding. Namely, landlords may find coming to an agreement with a tenant and offering cash-for-keys will save the expense and time related to a FED proceeding. In that situation, the landlord may find that getting a new tenant into the property sooner is worth paying the former tenant to leave.

Bodie Colwell is an attorney with Preti Flaherty’s Creditors’ Rights & Bankruptcy practice group. Bodie helps banks and businesses recover money owed to them and represents businesses in financial distress both in and out of court.

Original article published October 23, 2020, https://www.preti.com/publications/residential-evictions-and-the-pandemic-landlords-beware/ 

November 24, 2020 at 6:06 am · · Comments Off on The State of Retail: Permanently Damaged or Poised for a Comeback?

The State of Retail: Permanently Damaged or Poised for a Comeback?

by:  Joseph Italiaander, Associate, The Boulos Company

Among other things, 2020 has provided plenty of alarming headlines surrounding the state of the retail market. Perhaps what stands out the most to me is the growing number of bankruptcies among some of the country’s most established brands, including: J.C. Penney, Neiman Marcus, GNC, Lord & Taylor and Stein Mart. As a result, these filings have contributed to a growing number of vacancies, along with softening retail rents at many of America’s malls and shopping centers. These circumstances alone could make the case that retail is trending in the wrong direction, and the ‘light at the end of the tunnel’ is nowhere in sight…

But there have also been glimmers of hope in 2020 – Retailers like Home Depot and Lowe’s have reported double-digit growth in net sales year over year as a result of the home improvement boom spurred by the pandemic.

Similarly, cornerstone retailers like Target and Walmart have poured millions of dollars into technology adaptation, establishing a stronger online presence and enhanced customer loyalty programs. Both reported Q2 2020 earnings well above the Wall Street Earnings-Per-Share estimate. Additionally, Target has continued to expand its’ real estate footprint during the pandemic – including two new high-profile store leases signed in Manhattan.

Target isn’t the only retailer actively growing during this time. Here in Greater Portland, we recently saw the completion and grand opening of Market Basket’s new 80,000 square foot Westbrook location at Rock Row – which reported a whopping first-week revenue of $1.9m and welcomed customers who traveled from all over Maine to visit the store.

My belief is that the COVID-19 pandemic did not create problems for America’s struggling retailers, but rather expedited them. Groups like J.C. Penney and Stein Mart were never willing to invest in and adopt a true omni-channel presence like many of their now-thriving competitors, and thus had been paying the price for many years. Going forward, I believe that we will continue to see impressive growth from innovative and forward-thinking brands. Additionally, I think that we will see the emergence of new retail concepts that are capable of true long-term success.

So, will retail go the way of the dinosaurs? Or is the sector poised for a comeback?

Original article published on September 21, 2020, https://boulos.com/the-state-of-retail-permanently-damaged-or-poised-for-a-comeback/

 

November 17, 2020 at 7:00 am · · Comments Off on Business Interest Limitation Modifications

Business Interest Limitation Modifications

By Josh Lapierre, CPA, MBA, Senior Manager, Baker Newman Noyes

April 1, 2020

Updated as of April 14, 2020

This article was updated on April 14 to include provisions in Revenue Procedure 2020-22, which allows for a qualifying taxpayer to make a late election or withdraw an election to be treated as an electing real property trade or business or electing farm business for purposes of the business interest limitation. The notice also describes the timing and manner in which a taxpayer elects to utilize the benefits related to business interest limitation under the CARES Act.

As part of the major tax reform signed into law late December 2017, commonly known as Tax Cuts and Jobs Act (TCJA), certain businesses were required to limit their business interest deduction. (For a more detailed discussion, read this article: New Limitation on Interest Deductions for Businesses.) In general, the limitation disallows any interest expense that is in excess of 30% of adjusted taxable income plus business interest income. Adjusted taxable income for tax years 2018 through 2021 is taxable income increased by interest expense, depreciation, amortization, and depletion and excludes any item not allocable to the business. Beginning in tax years 2022, depreciation, amortization and depletion are not added back for purposes of computing adjusted taxable income. Any disallowed interest is carried forward indefinitely. The limitation is not applicable to certain small businesses.

The CARES Act makes two favorable modifications to the business interest limitation. First, the 30% is increased to 50% of adjusted taxable income for years beginning in 2019 or 2020. A partnership cannot use the increased 50% of adjusted taxable income for the 2019 tax year and must continue to use the existing 30% limit. For partners that were allocated disallowed interest in 2019 from a partnership, unless they elect out, in 2020 the partner will be able to deduct 50% of the limited interest and the other 50% will be subject to the existing rules. The second modification, and maybe of greater benefit, is for tax year 2020: The bill allows businesses to elect to use their 2019 adjusted taxable income to calculate their 2020 business interest limitation. This will be very beneficial for many businesses that are subject to the interest limitation and had endured negative economic impact in 2020. For short taxable years in 2020 the 2019 adjusted taxable income must be prorated by the number of months in the short taxable year over twelve. This modification will allow many suffering businesses to deduct more interest expense than prior law would have allowed. This additional interest expense may result in a greater tax loss and with the CARES Act’s new modification of net operating loss rules, will allow taxpayers the potential carryback of the loss to receive a refund based on the higher federal tax rate that applied prior to TCJA.

Revenue procedure 2020-22 gives businesses much needed relief and flexibility for making or revoking the election to be an electing real property trade or business or electing farm trade or business for the business interest limitations purposes. A taxpayer that wishes to revoke the election made on an originally filed return or wishes to make the election not made on the originally filed return for 2018, 2019, or 2020 will do so by filing an amended federal income tax return (or amended Administrative Adjustment Request (“AAR”) for certain partnerships). The amended return must include a statement and make the necessary adjustments for all returns impacted from the change. The amended return making or revoking the election must be filed by October 15, 2021. This provides businesses with much needed flexibility when considering the new changes to the tax life of qualified improvement property. An electing real property trade or business will be unable to take bonus depreciation on the qualified improvement property unless any existing election is revoked.

Revenue procedure 2020-22 also provides guidance related to the changes made by the CARES Act to the business interest limitation calculations. First, the guidance provides the timing and manner of how to elect out of using the 50% of adjusted taxable income for 2019 and 2020. For partnerships subject to the rules they may only elect out of the 50% limitation in 2020 because they must continue to use the 30% limitation in 2020. That election may be made on an amended tax return or amended AAR for certain partnerships. The election out is an annual election for 2019 and 2020. Second, partners in a partnership can deduct 50% of any excess business interest expense in 2020 carried over from 2019 unless the partner makes the election out. Third, a business may elect to utilize the 2019 adjusted taxable income for calculating the business interest limitation in 2020 simply by doing so (a separate election statement, etc., is not required). The election can be made on an amended 2020 tax return. Additional guidance is expected in the form of section 163(j) proposed regulations.

These changes related to the business interest deduction will provide more flexibility and less limitations for many businesses at a time when cash flow is crucial. 2019 returns already filed should be reviewed to consider any impact these changes may have. An amended return may be necessary and beneficial for the business and its owners. The bill does not address any other certain features of §163(j), such as the tax shelter rules which require tax syndicates to apply the business interest limitation rules regardless of the size of the company. The bill addresses short taxable years in 2020 but it does not discuss certain transaction such as a corporation joining or leaving a consolidated group or certain other M&A transactions.

For more information, please contact your BNN tax advisor at 800.244.7444.

Original article published April 1, 2020, https://www.bnncpa.com/resources/business-interest-limitation-modifications/

November 10, 2020 at 6:00 am · · Comments Off on OSHA COVID 19 Update

OSHA COVID 19 Update

Article courtesy of Clark Insurance

Confirmed cases of COVID-19 have now been found in nearly all parts of the country, and outbreaks among workers in industries other than healthcare, emergency response, or correctional institutions have been identified. As transmission and prevention of infection have become better understood, both the government and the private sector have taken rapid and evolving steps to slow the virus’s spread, protect employees, and adapt to new ways of doing business.

The COVID-19 pandemic has required businesses across a wide-range of industries to rethink how to best protect their employees, customers, and other stakeholders during continued business operations.  As the occupational landscape continues to evolve, the U.S. Occupational Safety and Health Administration (OSHA) has taken in increasing role in responding to complaints and investigating instances of COVID-19 related workplace hazards.  In this article, we will review how OSHA has responded to the pandemic, and explore what you can do to keep your business and your employees safe.

As of October 28th, 2020 state and federal OSHA have responded to over 40,000 complaints and over 5,000 referrals related to COVID-19 exposure in the workplace, resulting in more than 4,500 workplace inspections.  In its most recent new release on October 30th, 2020, OSHA states that it has issued COVID-19 related violations totaling $2,025,431 in proposed penalties.

 

 

 

 

 

 

 

 

 

Source:  https://www.osha.gov/news/newsreleases/infodate-m/202010

Much of OSHA’s recent enforcement activity has targeted essential industries where employees may be at increased risk of contracting COVID-19, including: healthcare occupations; retail establishments; grocery stores; construction; meatpacking and processing; warehousing; restaurants and lodging establishments; and automotive repair.  OSHA estimates that these activities have mitigated exposure to COVID-19 hazards for over 643,000 workers.

As with any workplace hazard, an OSHA inspection could be triggered by several events, such as: a planned inspection; referral from another agency or source; following an employee complaint, or in the event of a death or serious injury.

The absence of a federal emergency standard for COVID-19 workplace safety has not prevented OSHA from issuing citations under existing regulations, including:

  • Respiratory Protection standard (29 CFR 1910.134), which requires employers to provide adequate protection to employees exposed to respiratory hazards.
  • Personal Protective Equipment (PPE) standards (29 CFR 1910.132) which requires employers to provide adequate protective clothing (such as eye, face, hand, and body protection) to protect against hazards present in the workplace.
  • Injury Recording and Recordkeeping standards (29 CFR 1904) requiring employers to adequately record and report injuries, illnesses, and fatalities.
  • The General Duty Clause (Section 5(a)(1) of the OSH Act) which requires employers to provide a workplace free of recognized hazards likely to cause death or serious physical harm.

As an employer, you likely have the desire to provide your employees with a safe and healthy work environment.  Making good faith efforts and implementing effective procedures will help to ensure that your employees and your business are protected as well as mitigate any potential OSHA impact.  You should follow the recommendations issued by OSHA, the U.S. Centers for Disease Control (CDC), and state and local jurisdictions.  Consider whether you have:

  • Implemented methods for employee screening or self-certification before reporting to work.
  • Provided the appropriate PPE for your employees, including the use of face coverings
  • Established physical barriers, optimized workspace layout, or limited capacity to allow for adequate social distancing.
  • Leveraged technology to minimize the occurrence of face-to-face meetings.
  • Established regular cleaning and sanitization protocols of high touch surfaces, tools, and equipment.
  • Developed a plan to respond to a confirmed or suspected case of COVID-19 in your workplace. Should a case of COVID-19 occur, it is also important to know how to evaluate whether it is work related, and in what circumstances a case must be reported to OSHA.

Sources:

https://www.osha.gov/news/newsreleases/national/10302020

https://www.osha.gov/enforcement/covid-19-data    

https://www.osha.gov/memos/2020-05-19/revised-enforcement-guidance-recording-cases-coronavirus-disease-2019-covid-19

https://www.osha.gov/SLTC/covid-19/covid-19-faq.html#reporting

 

Original article can be accessed here: https://conta.cc/2TMwS1y 

November 3, 2020 at 6:30 am · · Comments Off on MEREDA Conference Focuses on the Dynamic History and Future Potential of Maine’s Economy

MEREDA Conference Focuses on the Dynamic History and Future Potential of Maine’s Economy

On October 15th, the Maine Real Estate & Development Association (MEREDA) hosted its virtual 2020 Fall Conference.  In challenging economic times, the event brought together industry leaders to contemplate Maine’s past while building a vision for Maine’s future.  MEREDA and its members are committed to having conversations that promote responsible development in Maine and to bringing great people together to work for that common goal.

“In planning our Fall Conference, we were inspired by a speech Joshua Chamberlain gave in 1876 that laid out his economic vision for the state,” says Josh Fifield, MEREDA President.  “Maine has a rich economic history; a history of resilience.  That felt like a good starting point for a conversation with our members about the economic challenges that lie ahead for us,” Fifield continues.

The conference included a keynote address from U.S. Senator Angus King, I-Maine.  In a pre-recorded video presentation, King shared insights on Joshua Chamberlain, one of his heroes.  In reviewing Chamberlain’s speech and progressive vision from 1876, Senator King drew out the parallels to our times on matters such as education, diversity of industry, infrastructure, and immigration.  For example, while Chamberlain spoke of the need for infrastructure such as roads to promote Maine’s great resources, today the need is for broadband.  “That’s the key piece of missing infrastructure right now and I believe if we can fill that gap there’s no stopping Maine,” said Senator King.  “I believe Maine has a huge potential because it’s a wonderful place to live, once we get the infrastructure, particularly the broadband, and if we’re sensible enough to maintain our quality of place, which is what brings people here.  If you can do your work from anywhere, why not do it from a beautiful place like Maine,” Senator King concluded.

Following Senator King were presentations by University of Southern Maine President Glenn Cummings; State Historian Earle G. Shettleworth, Jr.; Economist Charles Colgan, and President of FocusMaine, Kimberly Hamilton.  From Dr. Cummings’ presentation on USM’s expansion and the need for strong public universities to move regional economies to the next level, to Mr. Shettleworth’s overview of Mainers who lived and worked in the first 50 years of Maine’s statehood, to Dr. Colgan’s economic overview: “The Good, the Bad, and the Ugly,” to Dr. Hamilton’s outline of three sectors in Maine’s economy that are primed for global growth, the presentations painted a kinetic picture of Maine’s economy, its strengths and its challenges.  Looking ahead, with the virus playing a huge role in how and when Maine’s economy will begin to recover, Dr. Colgan outlined some of the questions this will pose for the real estate industry, such as  “Are we going back to the office?  Are we going back to a different office?  Do we need the same amount of space or more space for a socially distanced world?”

The event concluded with a panel discussion with individuals from four Maine business that have experienced growth during the pandemic economy: Scott Wellman, CFO of Puritan Medical Products; Amber Lambke, founder and CEO of Maine Grains; Seth Webber, principal with BerryDunn; and Briana Warner, CEO of Atlantic Sea Farms.  The panel was moderated by Andrea C. Maker, MEREDA’s Legislative Counsel and an attorney at Pierce Atwood.  Says Maker, “These four very different businesses from different regions of our state demonstrate that dynamic opportunities exist today across Maine.  It was uplifting to hear from each of the panelists…how they have built their businesses based on Maine resources, seized growth opportunities and built resiliency into their plans.”  Each of the panelists spoke about how the combination of natural resources, quality of people, and the quality of life in Maine contribute to the success of their businesses.  While they’ve all benefited from the resilient workforce present in Maine, they stressed the need for programs to retain and attract more people to the state so businesses can continue to grow, expand, and compete nationally and globally.

In describing the success of Atlantic Sea Farms, Warner talked about the importance of “figuring out your strengths and amplifying them.”  The MEREDA Fall Conference highlighted several of Maine’s strengths – such as its natural resources and beauty, its hard-working citizens, its innovative business community, and its commitment to education.  Amplifying these strengths will be key to rebuilding the economy.  While there is much uncertainty in the years ahead, the MEREDA event highlighted that, as Joshua Chamberlain said, “Brighter days are in store for Maine.”  MEREDA and its members are proud to be part of the conversation and the effort to achieve those brighter days.

October 20, 2020 at 6:00 am · · Comments Off on The Right Equation for Responsible Development: Spotlight on WEX Global Corporate Headquarters, Portland

The Right Equation for Responsible Development: Spotlight on WEX Global Corporate Headquarters, Portland

In a 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.

Our 2019 Top 7 recipients include:

62 Spring Street, Auburn, Anew Development / Auburn Housing
Founders Place Campus, Bangor, Bangor Savings Bank / CJ Developers
Cape Arundel Cottage Preserve, Arundel, Arundel-Kennebunkport Cottage Preserve, LLC
WEX Global Corporate Headquarters, Portland, Jonathan S. Cohen – 0 Hancock Street, LLC
Hannaford Center, Hampden, Good Shepherd Food Bank
Southgate, Scarborough, Avesta Housing
Station Square, Gorham, Great Falls Construction

MEREDA’s Board intended to honor the award winners at the 35th Anniversary Gala. Originally scheduled for the end of March 2020, the Gala was postponed indefinitely due to COVID-19. Though they may have their formal award delayed, these projects have only gained practical significance as they serve their communities–especially under additional strain and stress of these unprecedented times.  We look forward to formally recognizing these recipients at a future MEREDA event.

Please join us this week in celebrating WEX Global Corporate Headquarters in Portland.

MEREDA:  Describe the building and project.

Jonathan Cohen:  WEX’s new Global Corporate Headquarters building in Portland was a collaborative effort between WEX, project developer, design firms Archetype Architects (core & shell) and SMRT Architects & Engineers (interiors), construction manager Cianbro Corporation, and me as project developer. The result is a four-story, 116,000-square-foot, mixed-use facility, with a 19,000-square-foot rooftop deck, 5,000 square feet of retail space, and a mechanical penthouse.

The foundation consists of concrete piers and grade beams on steel h-piles, while the building’s exterior skin features a glass curtain wall system with metal panels. The interior includes high-end finishes such as stone tile flooring, stained oak walls and ceilings, glass walls, and a 700-gallon saltwater aquarium. The building boasts modern amenities incorporating open-office workspaces with traditional enclosed office spaces, indoor and outdoor dining and break areas, showers, and bike lockers. The rooftop patio encourages dining, recreation, and social events.

MEREDA:  What was the impetus for this project?  

Jonathan Cohen:  I had recently purchased the Ocean Gateway Garage as well as 100 Fore Street (formerly Hamilton Marine), and knew that WEX had been trying to locate in Portland for many years and reached out with the 100 Fore street site. During the process, the city lot on the corner of Hancock and Thames became available through an RFP process and WEX, Archetype, and I worked together to be the successful respondent with their design.

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

Jonathan Cohen:  The total time from design to permit was less than eight months; it was a fast track project.

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

Jonathan Cohen: As with the majority of construction projects, the most challenging aspect of getting a project completed is picking the right members of your team. One of the reasons why the sign at the site during construction had every subcontractor involved in the project was to thank and recognize their valuable contribution to getting this project done as quickly and safely as we did. More than 800 construction workers in the southern Maine community worked on this project. The total time from city permit in October to occupancy 15 months late was a major challenge and a tribute to all that worked on the project.

MEREDA:  Something unexpected you learned along the way was…

Jonathan Cohen:  The positive impact that we had on the immediately surrounding area, the way that the construction team embraced the planning required, and the impact that this project has had in leading the way for other similar projects in the area. We successfully proved that it could be done in Portland. Which is why the same team is working together on the 100 Fore Street office building and parking garage right now.

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

Jonathan Cohen:  It is hard to pick just one feature of the project. The exterior of the building is very much like the buildings of the Boston Seaport: curtain wall and Alucobond panels, the massive rooftop deck, the automated shade system, the impact on the city’s waterline and skyline; it is one of the most visible buildings when flying into Portland. I guess what I as the developer would pick as most notable would be the more than 800 jobs created during construction and the more than 400 permanent jobs sustained. WEX now greets cruise ship passengers and other visitors with a polished, professional, and modern look befitting Portland and other great cities around the world. A great place to Live and Work in Maine.

October 6, 2020 at 6:00 am · · Comments Off on The Right Equation for Responsible Development: Spotlight on Station Square, Gorham

The Right Equation for Responsible Development: Spotlight on Station Square, Gorham

In a 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.

Our 2019 Top 7 recipients include:

62 Spring Street, Auburn, Anew Development / Auburn Housing
Founders Place Campus, Bangor, Bangor Savings Bank / CJ Developers
Cape Arundel Cottage Preserve, Arundel, Arundel-Kennebunkport Cottage Preserve, LLC
WEX Global Corporate Headquarters, Portland, Jonathan S. Cohen – 0 Hancock Street, LLC
Hannaford Center, Hampden, Good Shepherd Food Bank
Southgate, Scarborough, Avesta Housing
Station Square, Gorham, Great Falls Construction

MEREDA’s Board intended to honor the award winners at the 35th Anniversary Gala. Originally scheduled for the end of March 2020, the Gala was postponed indefinitely due to COVID-19. Though they may have their formal award delayed, these projects have only gained practical significance as they serve their communities–especially under additional strain and stress of these unprecedented times.  We look forward to formally recognizing these recipients at a future MEREDA event.

Please join us this week in celebrating Station Square in Gorham.

MEREDA:  Describe the building and project.

Great Falls Construction:  Station Square is a great representation of Great Falls’ most recent commitment to excellence and meeting diverse community needs in construction and development to best support Maine’s economy. Station Square stands as a 70,000SF, five story, thirty-three residential, six commercial unit property located in the heart of Gorham’s thriving Village. Station Square is currently home for nearly fifty-five residents as well as the new hub for Village entertainment, dining, commerce and more. The building, now at full residential capacity, nearly tripled the rental offerings in the Village prior to this development. In addition, Station Square has employed over 100+ people throughout the construction and development process and will continue to employee 150+ people through the commercial offerings. Throughout the planning and development process, this project has contracted over 75 Maine companies. These companies worked hard together to produce this project and millions of dollars were circulated through these companies to the hard-working Maine people whose hands created this.

In addition to the economic impact, Station Square includes countless thoughtfully chosen environmentally sustainable upgrades. Throughout the entirety of the project significant choices for sustainable upgrades were selected and executed upon. Some notable examples include the building’s envelope at an R value of 42, which is double the amount required by code. In short, this selected upgrade drastically reduces the consumption of heat and a/c. Should the occupants turn on their heat or a/c they use a highly efficient ducted electric heat pump. Each of the 33-residential units are equipped with an efficient heat pump system to ensure sustainable consumption by all occupants. Station Square also has a storm water treatment system on site in the form of storm tree brand filters to clean water run off on site. In addition, our upgraded choice in flooring for the numerous outdoor patios and common roof deck is a recycled tire material that allows water to pass through and run off where required. By using recycled materials, we help eliminate waste and reuse existing materials that withstand the harsh Maine climate conditions. The durability of this upgrade will ensure that they last for years to come.

Finally, from a historical and cultural perspective the building intentionally preserves Gorham’s historic identity and modernly invites the community to enjoy working, living and playing in the center of Gorham. The name and design of the space is centered on Gorham’s history as a heavily traveled train village. The building is situated at 7 Railroad Avenue atop where the old train ran from 1851 until the tracks were ultimately abandoned in 1961.

MEREDA:  What was the impetus for this project? 

Great Falls Construction:  The impetus behind Station Square was the passion to construct with a purpose. Station Square’s purpose is to gather, live, work and play in the middle of Gorham, Maine. Station Square allows for the entire community to convene and enjoy what Gorham has to offer. Promoting community, walkability, sub-urban living environments, age-friendly family fun options, and economic activity were all forces behind the execution of the project. The project is a new space that offers so much now and for the future but also represents the past by nodding to the history of Gorham as a train traveled village. The name and overall design of the project was executed by the design team to pay tribute to Gorham’s past while offering so much for the present and future. Finally, Jon and Cindy Smith, co-owners of Great Falls Construction, are just plain passionate about developing and constructing with a Purpose and this was the energy that moved the project so successfully forward.

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

Great Falls Construction:  The planning phase of the project took a few years before we formally brought the project forward then a year or so from there to complete. It was close to a five-year project duration from conception to completion because we wanted to make sure we designed and executed the project so as to give the property the best chance for success.

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

Great Falls Construction:  As we embarked on the conceptual phase of the project, we quickly realized the current zoning wouldn’t support the mixed-use nature of the project. A contract zone would be required. Striking the right balance between commercial and residential uses and the right balance between number of units and number of parking spaces proved to be a laborious task. As we moved into the construction phase, we encountered some unknowns on the site such as, underground tanks, special soils, and railroad ties just below the surface. We also encountered an unknown concrete structure which was clearly important at one time. Building 70,000 sf on a village site with three businesses in another building onsite presented challenges at times. Thankfully, My-Fit24, The Gorham School of Music, and The Little Red Schoolhouse Daycare were very excited about the project and very understanding. Our other neighbors were all very understanding as well. We implemented many measures to minimize our impact on neighboring businesses and residents with the largest one being the use of our ground floor footprint as a laydown area for the project. Overall, our challenges were just more opportunities for solutions, some requiring more time than others, but none were insurmountable.

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

Great Falls Construction:  During the process the unexpected for us was the need for this type of building in our community and the overall great response. From the moment we broke ground to today when we do tours community members love the idea of the live/work environment and the accessibility to everything that Gorham has to offer. All of the apartments are currently full and from the response from the tenants they love the location and safe living that happens at Station Square.

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

Great Falls Construction:  Station Square’s most notable feature is its ability to bring the community together. Gorham has never had somewhere to gather like Station Square and the community has made it known that it has become a quick staple for placemaking in our small Maine town. Station Square was made possible by countless talented individuals who worked their craft in order to make this community building such a large success. It will be exciting to now watch this building evolve in its role within the community. The ability to have hundreds of community members gather and socialize in a local, safe setting is the most rewarding testament to the vision and work of so many people.

September 22, 2020 at 6:00 am · · Comments Off on The Right Equation for Responsible Development: Spotlight on Southgate, Scarborough

The Right Equation for Responsible Development: Spotlight on Southgate, Scarborough

In a 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.

Our 2019 Top 7 recipients include:

62 Spring Street, Auburn, Anew Development / Auburn Housing
Founders Place Campus, Bangor, Bangor Savings Bank / CJ Developers
Cape Arundel Cottage Preserve, Arundel, Arundel-Kennebunkport Cottage Preserve, LLC
WEX Global Corporate Headquarters, Portland, Jonathan S. Cohen – 0 Hancock Street, LLC
Hannaford Center, Hampden, Good Shepherd Food Bank
Southgate, Scarborough, Avesta Housing
Station Square, Gorham, Great Falls Construction

MEREDA’s Board intended to honor the award winners at the 35th Anniversary Gala. Originally scheduled for the end of March 2020, the Gala was postponed indefinitely due to COVID-19. Though they may have their formal award delayed, these projects have only gained practical significance as they serve their communities–especially under additional strain and stress of these unprecedented times.  We look forward to formally recognizing these recipients at a future MEREDA event.

Please join us this week in celebrating Southgate in Scarborough.

MEREDA:  Describe the building and project.

Avesta Housing:  Southgate Apartments represents an exceptional example of historic preservation to meet the affordable housing needs of a community. Southgate is located at Dunston’s Corner in Scarborough and offers 38 much-needed affordable apartments for low-income families. The development consists of two separate buildings: a new 30-unit apartment building and the rehabilitation of a separate historic Federal Style brick farmhouse into eight apartments.

Prior to construction, the historic farmhouse was in serious disrepair. Over the past 200+ years the farmhouse had seen a variety of uses including a farm and country retreat, a restaurant and inn, and rental housing. As a result of these varied uses, the property had undergone multiple reconfigurations leading to significant deterioration rendering most of the units uninhabitable by modern building codes.

The new building is separate from this historic building. It was designed in a vocabulary that is reminiscent of an old barn to complement the historic farmhouse but with a contemporary entrance so as not to compete with the original historic structure.

Southgate’s expert development team included: Avesta Housing, developer and owner; Goduti-Thomas Architects, architect; Benchmark Construction, general contractor.

In addition to the development team, key partners included the Town of Scarborough, the Scarborough Housing Alliance, MaineHousing, the Maine State Historic Preservation Office, Boston Capital, Bangor Savings Bank, Federal Home Loan Bank of Boston, Federal Home Loan Bank of Atlanta, NeighborWorks America, and Community Housing Capital.

MEREDA:  What was the impetus for this project? 

Avesta Housing:  As gentrification continues to put pressure on local labor markets, it is vital that we provide safe, decent, and affordable housing for our workforce. For years, the Town of Scarborough has recognized the need for affordable housing in their community and has been actively encouraging new opportunities to create housing for a diverse range of incomes. Because of this project, 38 households will be able to stay in their communities, access quality schools, and be in close proximity to a variety of employment opportunities.

Avesta’s Southgate development project has breathed new life into an important Maine landmark. The original farmhouse was constructed in 1805 by Robert Southgate. It is an important part of Scarborough’s cultural heritage and one of the Town’s oldest surviving structures.  Currently listed on the National Register of Historic Places, the farmhouse offers one of the best examples of preserved Federal Style brick farmhouses in New England.

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

Avesta Housing:  After coming up short in several tax credit applications, Southgate finally received funding in 2017 (three years after purchase). During that time, construction costs rose significantly and additional layers of funding subsidies were necessary. Southgate represents a unique and lengthy mix of financial sources, including a TIF from the Town of Scarborough, a grant from the Scarborough Housing Alliance, Low Income Housing Tax Credits, Federal and State Historic Tax Credits, and AHP funding from the Federal Home Loan Bank of Boston. Southgate also received funds from the Federal Home Loan Bank of Atlanta.

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

Avesta Housing:  The varying and intricate design of the historic building required high attention to detail. Given the ongoing labor shortages in the construction trades, it was often challenging to find skilled labor that could complete the work both on time and within the allotted budget. Unlike other more uniformly designed historic rehabs, such as schools and mill buildings, no two rooms were alike. While this adds to the elegance of the final product, it also presents challenges during construction.  An example of this was the replacement and refurbishment of the building’s historic windows. In total, the historic building has 44 windows comprised of 15 distinct window types.

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

Avesta Housing:  Southgate was Avesta’s first development in Scarborough. Each community we work in has different visions, resources, and challenges for creating affordable housing. Working with Town officials and the Scarborough Housing Alliance was a wonderful experience. Without their support this project would not have been possible. The Town went above and beyond to ensure that the project would meet the needs of the community while remaining proactive and flexible as issues arose. Our relationship with the Town was something we didn’t have before the start of this project but is something we look forward to continuing as we build more affordable homes in Maine.

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

Avesta Housing:  By preserving one of the original Federal Style agricultural estates in Maine, Southgate has protected a cultural resource and connection to our past that was in jeopardy of being lost. In order to maintain the project’s feasibility during escalating construction prices, Avesta had to pursue a unique variety of funding sources. To the best of our knowledge, this project is the first in Maine to be awarded subsidy from two Federal Home Loan Banks for a single project.

In addition, 20% of Southgate apartments are preserved for households who have previously experienced or are at risk for homelessness. To help this population and our other residents succeed, Avesta is committed to provide services to foster greater financial awareness and self-sufficiency. These efforts include offering our residents free credit counseling, fraud avoidance, and homeownership courses. By supporting vulnerable populations and giving residents the tools to improve their own financial literacy, Southgate can contribute as a stabilizing force to our local economy and communities.