October 17, 2023 at 6:00 am
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Shelly Clark ·
Comments Off on The Right Equation for Responsible Development: Spotlight on Freedom Place at 66 State Street (Portland)
Each year, the Maine Real Estate & Development Association (MEREDA) recognizes some of the state’s most “noteworthy and significant” real estate projects, completed in the previous year. The exemplary projects from across the state, completed in 2022, not only embody MEREDA’s belief in responsible real estate development, but also exemplify best practices in the industry, contributing to Maine’s economic growth by significant investment of resources and job creation statewide.
This year, MEREDA honored projects from Lewiston to Portland to Biddeford, with each receiving special recognition at MEREDA’s 2023 Spring Conference on May 25th.
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.
MEREDA’s 2022 Top 7 recipients include:
Lincoln Hotel & Lofts, LHL Holdings and Chinburg Properties (Biddeford)
Gauvreau Place, Community Concepts Inc. and Avesta Housing (Lewiston)
Shipyard Brewing Redevelopment, Bateman Partners, LLC (Portland)
Reconstruction & Reuse of Historic Building 12, Portland Foreside Development Company (Portland)
L.L.Bean Corporate Headquarters, Zachau Construction (Freeport)
Freedom Place at 66 State Street, Developers Collaborative (Portland)
VA Outpatient Clinic, J.B. Brown & Sons and FD Stonewater (Portland)
Please join us this week in celebrating Freedom Place at 66 State Street.
MEREDA: Describe the building and project.
Freedom Place at 66 State Street: Freedom Place at 66 State Street is a renovation and adaptive reuse project located in Portland’s West End neighborhood. The historic three-story brick building at 66 State Street is the former home of St. Dominic’s Parochial School for Boys, and it more recently housed several social services agencies, including Amistad, which serves adults in the Greater Portland area who struggle with mental illness, substance abuse, and other life challenges.
In 2018, Kevin Bunker of Developers Collaborative purchased the historic building and subsequently redeveloped it into a transitional housing complex for women in recovery from substance abuse and homelessness. The building now contains 38 single-occupancy bedrooms, communal bathrooms, kitchens, and gathering spaces for residents. There is space to support on-site wrap-around services for residents, including treatment and recovery programs provided by Amistad. In addition, residents can participate in vocational training that takes place in the building’s on-site commercial kitchen. Re-entering the job market is only one aspect of recovery, but it is an important one. Finally, to provide a continuum of housing options to house residents throughout the full recovery journey, Bunker’s plan involved the development of a new 30-unit affordable apartment complex on the same site as the historic building redevelopment.
MEREDA: What was the impetus for this project?
Freedom Place at 66 State Street: When Bunker acquired the building in 2018, he envisioned transforming the building into market-rate condominiums to meet the need for more housing on the Portland peninsula. However, as a result of Kevin’s encounters with Amistad, then a tenant of the building, a new vision for the building was formed. There was a significant unmet need in the Portland community for a development that would respond to Maine’s homelessness crisis and embrace the state’s “Housing First” model, which provides housing to those in need without the typical shelter prerequisites of sobriety or medication. Freedom Place helps fill the need for this type of housing in the Portland community and serves as a haven for women experiencing homelessness.
Safe, stable housing is vital for recovery, and women often have a more difficult time navigating the shelter system and having their unique needs met by traditional recovery residences. Women experiencing addiction are more likely to be exposed to poverty, hunger, adverse legal interaction, sexual exploitation, domestic abuse, and trauma. Freedom Place provides them with secure housing and on-site programs to break the cycle of homelessness and promote recovery and pathways back to productive lives.
Bunker and Amistad’s shared vision for Freedom Place at 66 State Street guided them through many challenges in the development process. The model for the partnership between Bunker and Amistad had no precedent and required both partners to leverage their areas of expertise: Bunker’s real estate structuring and development acumen and Amistad’s years of experience serving vulnerable populations. The project is a model for how the private sector can partner with nonprofits to have a positive impact on their local communities. However, even once Bunker and Amistad worked out a model, many technical challenges in the redevelopment process remained.
MEREDA: That sounds like quite a process. How long were you in the planning stages before construction started?
Freedom Place at 66 State Street: The predevelopment phase for Freedom Place took about a year before construction began. In addition, the renovation of the existing building was just the first phase of the redevelopment plan. Phase two, which began construction in the spring of 2022 and will be completed this summer, is a new, adjacent development of 30 units of affordable housing.
MEREDA: Tell us about the most challenging aspect of getting this project completed.
Freedom Place at 66 State Street: It’s hard to pick just one – many challenges had to be overcome to make the project possible. There were many regulatory barriers to overcome to fit the phase two apartments on a tight urban site while meeting the requirements of a historic district. The combined two-phase project required a complex capital stack, including a master-tenant two-phase Historic Tax Credit structure, an inclusionary zoning contribution from a nearby market-rate project, a 30-year TIF from the City of Portland, and project-based voucher allocation from MaineHousing alongside traditional debt and equity.
MEREDA: Something unexpected you learned along the way was….
Freedom Place at 66 State Street: The Freedom Place at 66 State Street demonstrates that the most valuable real estate in Portland cannot and should not be reserved for high-end development only. The downtown West End location of Freedom Place is walkable to much of Portland and public transportation hubs, which is a critically important feature for residents seeking off-site services and amenities. To create the Portland we all want, there must be a mix of incomes and uses in even the most desirable neighborhoods in the city. The Freedom Place project is an example of anti-gentrification that keeps Portland accessible and inclusive to the entire Portland community.
MEREDA: Now that it’s complete, what feature of the project do you think makes it the most notable?
Freedom Place at 66 State Street: The most notable feature of the project isn’t architectural. Several Freedom Place residents have not been able to maintain stable housing for over a decade until now, and many others are making meaningful steps toward rebuilding their lives thanks to the services provided by Amistad. Freedom Place has also reduced the burden of the homelessness crisis on local hospitals, shelters, and jails. Without Freedom Place, many of the women who reside there would have had nowhere else to go. While difficult to quantify, the impact of Freedom Place on the Portland community and the lives of residents has been meaningful.
[Leanne Nichols, Broker, Keller Williams Realty] “In 2022, the residential real estate market in Maine saw home prices soar to staggering new heights, further deepening the crisis many Mainers face to access affordable housing. The year started with an average mortgage interest rate of approximately 3%. As it became evident that inflation was not transitory, this interest rate more than doubled to a peak of over 7%, which affected affordability and forced many hopeful homebuyers out of the market. However, the low inventory and strong in-migration kept Maine’s market very strong for sellers throughout 2022. For example, I worked with buyer clients who finally closed on a South Portland home in September after four multiple offer situations. The home was listed for $680,000 and closed for $830,000.