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August 8, 2023 at 6:00 am · · Comments Off on Listen Up! The August 2023 Episode of the “MEREDA Matters” Podcast is Now Available!

Listen Up! The August 2023 Episode of the “MEREDA Matters” Podcast is Now Available!

A Conversation with Josh Miranda, Owner of the Miranda Restaurant Group.

Josh Miranda, Owner of Miranda Restaurant Group, sits down with MEREDA Board Member Josh Soley and MEREDA President Craig Young for the eighth episode of MEREDA Matters – the podcast that puts you in the room with the people who are driving responsible development in Maine. Miranda, a Portland-native, talks about how he got his start working in restaurants at age 14 and how he’s always been comfortable behind a bar. After a successful career opening up bars and restaurants for other hospitality groups in other states, Miranda shares how he ventured into the Portland scene with immersive concepts for his own businesses and how he is driven by his desire to create spaces where people can escape and have an experience. The group discusses the origin stories of Miranda’s three current businesses, the talented team who are a part of his vision, and his approach to providing an opportunity for his staff to have a true work/life balance. With a new restaurant and bar set to open in the iconic Bull Feeney space this summer and another bar in the works, Miranda discusses his goals for the future.

Where is Josh Miranda’s favorite place to escape? Listen to the episode to find out!  https://mereda-matters.simplecast.com/

Catch up on past episodes while you’re there!

The MEREDA Matters podcast is sponsored by NBT Bank and Landry French Construction. Additional sponsors include Bangor Savings Bank, Clark Insurance, A Marsh & McLennan Agency LLC Company, and The Boulos Company. A new episode will be released each month and each will feature new voices from the real estate and development industry.

August 1, 2023 at 6:00 am · · Comments Off on The Right Equation for Responsible Development: Spotlight on Gauvreau Place (Lewiston)

The Right Equation for Responsible Development: Spotlight on Gauvreau Place (Lewiston)

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 Gauvreau Place.

 

MEREDA:  Describe the building and project.

Gauvreau Place: Gauvreau Place was a joint effort between Community Concepts Inc. (CCI) and Avesta Housing. The building is named for the late Paul Gauvreau, a Lewiston attorney, legislator and board member of CCI. The land on which it was built once housed Paul’s law office as well as the medical offices of his grandfather and father. Paul was a champion of this development, and his involvement during the early planning stages helped achieve key municipal support leading to its construction.

Gauvreau Place consists of 35 mixed-income apartments that are affordable to a wide range of households. The property is close to downtown services and businesses as well as public transportation. Amenities include a community room, on-site laundry and on-site parking beneath the building. The property is solar-ready, with conduit and truss sizing that will facilitate future installation of solar panels.

Energy efficiency features insulation that greatly exceeds the minimum required by building code, water-conserving fixtures, and Energy Star-qualified windows, appliances, and lighting. The building also has all-electric heat. Other sustainable building practices include recycling at least 25 percent of total construction/demolition material and landscaping with indigenous, non-invasive plants in lieu of grass to reduce water consumption.

MEREDA:  What was the impetus for this project?  

Gauvreau Place: Multifamily apartment buildings previously on the site were destroyed during a series of arsons in 2013 that shook neighborhood residents and city leaders. This development was conceived in the midst of extensive community planning around transformative change for the Tree Streets neighborhood — the City of Lewiston and CCI applied for and received a Choice Neighborhoods Planning Grant in 2019. Although the Gauvreau Place development is not part of that Choice Neighborhoods initiative, it was an opportunity for community partners to come together and start moving forward on goals that had been identified and prioritized by the community as a whole. Gauvreau Place provides much-needed affordable housing for Lewiston, where rents have increased significantly in recent years.

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

Gauvreau Place: Avesta and CCI started working on this project in early 2018, securing purchase agreements on the land and submitting applications for competitive funding sources. By the end of that year, we had secured awards of Low Income Housing Tax Credits (LIHTC) from MaineHousing and additional funding from the Federal Home Loan Bank of Boston. We received City approvals in late 2019, at which point we transitioned fully into design development. All funding sources were secured by the end of 2019.

We planned on a spring/summer 2020 construction start. However, impacts from the pandemic and unknowns within the industry slowed that process down. We continued to progress the design throughout 2020, and finally began construction in April 2021. We received our certificate of occupancy in June 2022, and residents have been living in the building ever since.

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

Gauvreau Place: The project faced some criticism from the community and elected officials because of its scale and concerns about the impact it would have on the neighborhood context. This opposition was limited but very vocal, but it could potentially have scuttled our plans altogether. Through careful management of the municipal process, careful architectural design that helped integrate the building into the neighborhood, and the positive influence of key community leaders that included Paul Gauvreau, we were able to achieve full municipal approvals by the end of 2019.

Another challenge was the management and remediation of contaminated soils and other below-grade factors, including an abandoned underground storage tank and significant urban fill. Redevelopment at this location included off-site disposal of contaminated soils as well as careful management of soils that remained on site through permanent cover systems and other approved environmental management strategies. These efforts have improved the site environmentally and reduced health risks.

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

Gauvreau Place: This development was only possible due to the ongoing commitment of local project stakeholders at every step of the process. The City had a vision for a revitalized downtown, which facilitated the purchase of contiguous parcels of the size necessary for a tax credit development and leveraged local funding sources to balance a very tight budget.

CCI had key connections to housing advocates in the neighborhood as well as community leaders who could help overcome public opposition experienced at the beginning of the development. Platz Associates was excited by the vision for a context-appropriate multifamily building in the downtown, and Hebert Construction had extensive local expertise and subcontractors to ensure quality and efficient construction. Creativity and flexibility from Norway Savings Bank meant we secured a very competitive rate on our permanent loan, MaineHousing facilitated the investment of both tax credits and additional state sources, Androscoggin Valley Council of Governments invested significant funds in the environmental cleanup, and Evernorth was committed to working through the unknown risks raised by the pandemic and helping us move ahead to a timely construction loan closing.

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

Gauvreau Place: Gauvreau Place had a wide-ranging and complex capital stack to address the unique conditions of the site and the industry impacts of the pandemic. This required significant collaboration and coordination between many funders and community partners, who were all committed to the project and working together to find positive solutions to each new challenge. This collaborative community effort was at the root of the project’s success, especially during such a challenging time as the early months of the COVID-19 pandemic.

July 25, 2023 at 6:00 am · · Comments Off on Maximizing energy tax credits for RE developers

Maximizing energy tax credits for RE developers

By Anita S. Mahamed, Dannielle Lewis, Teri Samples | Partners at Wipfli

The real estate industry can greatly benefit from energy tax credits and the changes made in the Inflation Reduction Act. As sustainability and environmental responsibility become increasingly important priorities, incorporating energy-efficient features into real estate projects not only reduces operating costs but also enhances the property’s value by helping the project stay green.

These recommendations can help real estate developers take advantage of energy tax credits to maximize their returns while contributing to a greener future.

Integrate renewable energy systems
Incorporating renewable energy systems into real estate projects is a great way to leverage energy tax credits. Installations such as solar panels, geothermal heating and cooling systems, wind turbines and energy storage solutions can qualify for significant tax credits. By integrating these systems, developers and real estate owners can reduce utility costs and generate additional revenue through excess energy production.

Additionally, they may be able to sell the tax credits to provide additional equity for their deals. But the requirements for obtaining the credit are complex.

Here is an example of how the credit is calculated: A taxpayer develops a building and has solar units installed on the roof. The cost of the solar panels is $260,000. The solar panels were installed to meet the prevailing wage and apprenticeship requirements. In this situation, the taxpayer will be eligible for a $78,000 tax credit and the solar panels basis that is eligible for bonus depreciation is $221,000.

Explore energy-efficient upgrades and retrofits
Designing energy-efficient buildings can allow for substantial tax benefits. Energy tax credits are available for structures that meet certain energy performance standards and use energy-efficient technologies. Developers should focus on optimizing insulation, lighting systems, HVAC and building envelope components to enhance energy efficiency. By implementing energy modeling and using high-efficiency materials and systems, developers can qualify for tax incentives.

The incentives aren’t limited to new construction. Real estate developers can take advantage of energy tax credits through retrofits and upgrades. Upgrading existing buildings with energy-efficient windows, lighting, HVAC systems and insulation can make them eligible for tax credits.

These particular improvements may allow developers and real estate owners to take advantage of either a Sec. 179D tax deduction or a Sec. 45L credit. As an example, in July 2023, a developer created a new, four-story, 208-unit apartment complex. During 2023, it reached full occupancy and the property leased each unit. The apartment building also qualified for the federal Zero Energy Ready Home program and met the prevailing wage requirements. This means that they are eligible for a Sec. 45L credit of $5,000 per unit, equaling a total of $1,040,000.

How Wipfli can help
Navigating the energy tax credits may require the assistance of tax professionals and sustainability consultants. Wipfli advisors can provide guidance on eligibility criteria, documentation requirements and optimal strategies to maximize tax benefits. We can also help with energy modeling, project certification and ensuring compliance with applicable regulations. Most importantly, we can help you determine the best use of your equity for your deal before you spend it, bringing our specialized tax knowledge to help guide your decision-making to support your business through changing environmental policies.

Learn more about our tax services supporting the construction and real estate industries.

Sign up to receive additional tax and legislative content in your inbox.

 

Original article posted on June 8, 2023: https://www.wipfli.com/insights/articles/cre-real-estate-developers-take-advantage-of-energy-tax-credits

July 18, 2023 at 6:00 am · · Comments Off on Highlighting the Commercial Component of the 2023 MEREDA Index

Highlighting the Commercial Component of the 2023 MEREDA Index

On May 25, Stephen Nahley, Chief Operating Officer & General Counsel, East Brown Cow, was a commentator for the Maine Real Estate & Development Association’s (MEREDA’s) 2023 MEREDA Index. Stephen’s comments on the Commercial Sector follow Economist Charles Colgan’s analysis for 2022. 

The MEREDA Index is a measure of real estate activity designed to track changes in Maine’s real estate markets. The Index is a composite of nine seasonally adjusted measures reflecting both new development and transactions involving existing properties and it covers both the commercial and residential markets statewide. The most recent edition covers the year 2022 and provides commentary on the Commercial, Residential, and Construction sectors. The MEREDA Index for 2023 is 115.8

THE COMMERCIAL COMPONENT:  120.8

[Charles Colgan Analysis] “The components of the commercial Index all increased on an annual average basis compared with 2021, but all four components also ended the year below the end of year in 2021 calculated on a 4-quarter moving average basis. The index for the number of commercial real estate transactions reported in the Boulos database grew slightly on a year over year basis but the end of year index value was down 4.3%. Commercial square feet also declined in the latter part of the year, along with both the average sales price per square feet and the average lease rate.”

[Stephen Nahley, Chief Operating Officer & General Counsel, East Brown Cow] “In 2022, the commercial real estate industry in southern Maine experienced some exciting growth, particularly in Portland. As pandemic worries continued to ease, the region’s retail and dining sectors began to thrive once again, with new businesses opening throughout the city. As people recalibrated post-COVID and prioritized living in walkable communities with increased access to amenities, it translated into the trend of moving back into densely urban areas. East Brown Cow similarly recalibrated our portfolio in 2022 to gradually shift away from management of suburban spaces to reinvest capital into the urban fabric of Portland’s ever-vibrant downtown.

Although online shopping and a lack of labor pose risks for retail, recent lease transactions demonstrate the true strength of the local market. For example, East Brown Cow welcomed Madewell, a popular national retailer, to our property at 75 Market Street in November of 2022. Overlooking Post Office Park at the corner of Market and Middle Streets, this 5,532 square foot space is the company’s first store in northern New England. This transaction represented years of progress to curate Portland’s Old Port into a unique retail shopping destination, one that is successful for national retailers and independent businesses alike. For our team, this is the key for continued commercial growth.

Portland also experienced an increased interest in mixed-use spaces, another interesting trend. Visitors and residents are searching for amenity-rich spaces and developers sought to capitalize on the demand. At East Brown Cow, we saw this as an opportunity to expand our offerings at The Docent’s Collection, an alternative to traditional hotels that provides temporary luxury lodging within historic, mixed-use buildings in Portland’s Old Port. These properties combine retail or dining spaces on the ground floor with hospitality stays on the upper floors, providing a unique urban living experience. The success of this type of project can partly be attributed to downtown Portland’s growth in the commercial sector, as new dining and retail businesses look to leverage the increase in visitors to the Old Port.

Looking ahead, we remain optimistic about investment opportunities in urban, walkable areas across Maine. For example, in Portland our multimillion-dollar renovation of the Fore Street Garage continued in 2022, along with a project to repurpose One Canal Plaza’s first and ground floors into retail space. These projects are another sign of the strength of the area’s retail market, and we anticipate that the demand will continue to rise in the coming years.”

 

July 11, 2023 at 6:00 am · · Comments Off on Listen Up! The July 2023 Episode of the “MEREDA Matters” Podcast is Now Available!

Listen Up! The July 2023 Episode of the “MEREDA Matters” Podcast is Now Available!

A Conversation with Sonja Trauss, YIMBY Activist and Responsible Housing Advocate

Sonja Trauss, Executive Director of Yes in My Back Yard (YIMBY), sits down with MEREDA Vice President Shannon Richards and MEREDA President Craig Young for the seventh episode of MEREDA Matters – the podcast that puts you in the room with the people who are driving responsible development in Maine. Trauss lives in the Bay Area in California and shares her journey from high school math teacher to housing activist. What started as Trauss ranting with friends about the lack of housing in San Francisco evolved into two advocacy organizations, YIMBY and YIMBY law, with 18 employees and 43 chapters in 19 states. Trauss sees herself as an activist for the end user of housing developments – the housing consumer, and discusses her organizations’ approach to promoting housing creation with advocacy, organizing, and focused legal action that requires cities to honor their own existing zoning laws rather than create subjective barriers for housing creation. The group also discusses ways for people to get started as a housing activist such as the very effective action of calling elected officials and showing up to local planning board meetings to make a public comment in favor of housing.

What’s the best thing Sonja ate during her visit to Maine? Listen to the conversation to find out!  https://mereda-matters.simplecast.com/

Catch up on past episodes while you’re there!

The MEREDA Matters podcast is sponsored by NBT Bank and Landry French Construction. Additional sponsors include Bangor Savings Bank, Clark Insurance, A Marsh & McLennan Agency LLC Company, and The Boulos Company. A new episode will be released each month and each will feature new voices from the real estate and development industry.

June 27, 2023 at 6:00 am · · Comments Off on Maine’s Housing Shortage Conundrum

Maine’s Housing Shortage Conundrum

By John Finegan | Associate Broker, The Boulos Company

Like many states across the country, Maine has a housing crisis. The ripple effects of COVID and the needs of asylum seekers have created an influx of people coming to Maine. Simultaneously, the average number of people per household is shrinking, and this exacerbates the demand for additional housing units. New construction is not going to solve the problem quickly, as construction hard costs are at all-time highs and developers find themselves quickly buried in complex bureaucratic processes and the attendant soft costs, which make construction harder and more expensive. Meanwhile, interest rates are the highest they’ve been since 2002, both increasing the cost of construction and decreasing what a buyer can pay for a home.

The housing crisis is a supply and demand issue. We have a lot of demand and not enough supply, and when that happens prices go up. MaineHousing has estimated that Maine needs 20,000 – 25,000 new housing units to meet demand, 9,000 in the Portland area. Until supply and demand are in equilibrium, we will continue to see housing prices increase.

The only way to end our housing crisis is to build more housing.

HOW DO WE BUILD MORE HOUSING?
Housing is built by for-profit developers (FPDs) and nonprofit developers (NPDs). NPDs finance their developments by leveraging federal, state, and local funds, including the low-income housing tax credit program. NPDs typically build affordable housing, creating housing for some of the most vulnerable people in our community. NPDs are limited, however, both by the amount of available funding and because the process for receiving those funds and tax credits is complex and requires a sophisticated developer.

To build more affordable housing, voters need to support policies and politicians that allocate more funds to NPDs as they did this past November across the country.

For profit developers typically do not take advantage of public funds. FPDs assess whether a project is worthwhile based on construction inputs and projected revenue. Construction inputs include hard costs (such as raw materials, labor, and land) as well as soft costs (such as engineering, permitting, legal, and accounting fees). Projected revenue is determined by estimating what a project will sell or lease for once completed. FPDs put these numbers into a proforma to estimate a return on investment for the project.

FPDs are constrained by the realities of the marketplace. They need to be able to give their financiers—banks, pension funds, private equity investors—an adequate return on their investment based on the risk profile and other investment alternatives. If they can’t, the project “doesn’t pencil,” they can’t get funding, and the project doesn’t get built.

To build more housing by FPDs, construction costs need to go down and/or projected revenue needs to go up.

HARD COSTS OF CONSTRUCTION
On average, the hard costs of construction increased 35% from January 2020 to September 2022. The increase in the cost of housing in new developments can be traced directly to this. Additionally, the volatility in hard costs has created a great deal of risk for developers, contractors, and sub-contractors who make decisions based on quoted prices with little assurance that those quote prices will be accurate once the costs are incurred. A labor shortage has also made staffing construction sites difficult. The unknowns of future construction prices and hard costs, coupled with uncertainty of labor, adds risk to any development which have killed several projects in Southern Maine over the past two years.

CONSTRUCTION HARD COSTS OVER TIME

The only way to lower these hard costs—or reduce their escalation—is for supply chains to normalize. In Q3 of 2022, hard cost escalations slowed and a recent study found that escalation should stabilize to 2–4% annual increases by 2023–2024. There is not much that we as individuals or as a community can do to control construction hard costs.

SOFT COSTS OF CONSTRUCTION
Soft costs are construction costs that are not related to raw materials, labor, or the physical building of the project. They include architectural drawings, environmental certifications, engineering studies, financing, legal fees, and any regulatory costs. Many of these soft costs are necessary. You can’t build a building without architectural plans, for example. However, some soft costs can be altered through policy. Fee-in-lieu costs, permitting fees, impact fees, etc. are government imposed costs that can be reduced or altogether removed to lower construction costs and allow more developments to be built. The June 2022 report by the National Multifamily Housing Council found that regulations imposed by all levels of government account for an average of 40.6% of multifamily development soft costs. None of this goes into actually constructing the units.

In Portland, a mandatory inclusionary zoning ordinance requires developers to make 25% of units in any 10+-unit development affordable, or pay a fee-In-lieu of $162,339 per affordable unit. This is effectively a tax of $40,585 per unit when the 25% requirement is spread across the entire project. It’s a prime example of how unnecessary regulatory costs can kill a housing project and discourage development.

The recent increase in interest rates also plays a substantial role. Higher interest rates increase the rates on construction loans, reduce the affordability of homes for buyers, and drive up the rents required to support a project.

LESS STICK
Developing housing is a numbers game, and projects must pencil to be built. Hard costs have gotten more expensive, but those are market realities and out of our control. Some soft costs, on the other hand, are unnecessary costs associated with regulations. Reducing or removing them can make housing creation less expensive and trigger new construction in the market.

Portland, Brunswick, Yarmouth, Freeport, Scarborough, South Portland, and Falmouth all have some form of housing regulation, either in place or being discussed. These policies have traceable, quantitative consequences, which make soft costs more expensive, killing projects. They also have a qualitative impact. Nationally, 47.9% of developers said they won’t even consider projects in jurisdictions with inclusionary zoning requirements, while 87.5% avoid working in jurisdictions with rent control.

MORE CARROT
Liberalization of zoning laws to allow for more density, taller height restrictions, smaller off-street parking restrictions, smaller impervious surface restrictions, and smaller setbacks allow developers to get more units onto the same amount of land. More units mean more revenue, and that means a greater likelihood that a project will make economic sense and be built. The Boston Fed’s New England Policy Center said that allowing more density, combined with relaxing height restrictions is the “most fruitful policy reform for increasing supply and reducing multifamily rents.” Economists from UCLA and the Legislative Analyst’s Office of California found that building new market rate housing lowers the cost of housing in cities for everyone.

In April 2022, Maine passed LD 2003 which will go into effect in July 2023. Once in effect, the bill will allow property owners to build accessory dwelling units in residential areas and allow up to two units on a lot zoned for single-family housing. For larger communities with designated “growth areas,” up to four units could be allowed. Additionally, the bill allows for a 2.5x density bonus for developers who hit affordability requirements.

It will be interesting to see how LD 2003 plays out in 2023. It may encourage developers to reevaluate developments based on the new density, and those developments may prove economically feasible and get built.

CONCLUSION
Westbrook, a town that has been welcoming towards developers, currently has 1,301 housing units in planning review. As of November, 2022, in Portland, where the fee-in-lieu effectively taxes 10+-unit developments, there are under 300 housing units in planning review. A clear slowdown has occurred since Portland increased its inclusionary zoning requirement in 2020. What does this tell us? Housing creators go where they’re wanted and where there are fewer economic barriers. If we want to be proactive in ending our housing crisis, local governments need to enact policies that incentivize development, not make it more expensive.

To end the housing crisis, more housing must be constructed. For more housing to be constructed, many things have to fall in line for projects to start making financial sense. Many of these factors are out of our control, but enacting policies that incentivize development is not.

Original article posted March 3, 2023, https://boulos.com/maine-housing-shortage-conundrum/

June 20, 2023 at 6:00 am · · Comments Off on The Right Equation for Responsible Development: Spotlight on Lincoln Hotel & Lofts (Biddeford)

The Right Equation for Responsible Development: Spotlight on Lincoln Hotel & Lofts (Biddeford)

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 Lincoln Hotel & Lofts.

MEREDA:  Describe the building and project.

Lincoln Hotel & Lofts: The Lincoln Lofts and Hotel project began with a vision many years before its completion to turn the historic textile mill in downtown Biddeford into a vibrant mixed-use property including a luxurious boutique hotel and 147 apartments, with a gym, rooftop pool and restaurant. The massive mill building has seen many commercial uses over the years dating back to the 1830’s when giant turbines first began converting water flow from the Saco River into the power needed for the looms to weave cotton into fabrics. The Hotel occupies the northern 40,000 square feet of the mill while the remaining 230,000 square feet are comprised of various commercial tenants and 147 apartments with common areas and resident amenities throughout.

MEREDA:  What was the impetus for this project?  

Lincoln Hotel & Lofts: This project was driven by the spirit of revitalization and the goal to create a unique guest experience for travelers while giving the local community a fun place to gather for great food and beverages in the heart of Biddeford.

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

Lincoln Hotel & Lofts: Tim Harrington acquired the Mill in January 2015 and began efforts to plan the adaptive re-use of the mill. Eric Chinburg and the Chinburg Properties team became involved in the summer of 2017. We began construction in earnest in March 2020 with the first phase of apartments occupied in August 2021.

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

Lincoln Hotel & Lofts: Working on a 200-year-old mill building always presents unique challenges for any project, such as structural repairs and substantial amounts of brick restoration but bringing a mill to the level of luxury desired for the hotel here certainly raised the bar on renovation efforts. From flooring to light fixtures and a grand staircase in the middle of the hotel lobby, meticulous details added to the schedule every step of the way but in the end created an amazing finished product.

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

Lincoln Hotel & Lofts: Have patience and expect the unexpected on every historic restoration project and you’ll never be caught off guard.

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

Lincoln Hotel & Lofts: We believe the rooftop swimming pool is the most notable feature of this project and adds a special flare to this historic mill that surprises most for Biddeford Maine.

June 13, 2023 at 6:00 am · · Comments Off on Maine Real Estate & Development Association Awards Top 7 Notable Projects of 2022

Maine Real Estate & Development Association Awards Top 7 Notable Projects of 2022

The Maine Real Estate & Development Association (MEREDA), the state’s leading organization promoting responsible real estate development, honored projects from Portland to Biddeford to Bangor, with each receiving special recognition at MEREDA’s 2023 Spring Conference on May 25th.

Each year, 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.

Each of the seven projects was selected in part based upon criteria including: noteworthy and significant project completed* in 2022 (*Building Occupancy Permit issued by 12.31.22), environmental sustainability, economic impact, energy efficiency, social impact, uniqueness, difficulty of development and job creation.

The recipients of MEREDA’s Top 7 Most Notable Projects of 2022 include:

  • Chinburg Properties and LHL Holdings’ Lincoln Hotel & Lofts in Biddeford, is another successful adaptive re-use of a former textile mill in the expansive Biddeford/Saco Mills Historic District. The city of Biddeford saw the potential in restoring the mills and supported the effort of this project and others with community support, infrastructure improvements, and thoughtful planning. The Lincoln Mill was converted into a vibrant mixed-use property by the team of Chinburg and Atlantic Holdings and is now home to The Lincoln Hotel, a 33-room boutique hotel, 147 modern apartments, Batson River Restaurant, Impact Fitness, and Immortalata Nutrition. The property is the first in southern Maine with a rooftop pool and social space.
  • Community Concepts, Inc. & Avesta Housing’s Gauvreau Place is located in the heart of Lewiston. Gauvreau Place has great significance for the community. Developed by Community Concepts Inc. (CCI) in partnership with Avesta Housing, Gauvreau Place consists of 35 apartments, of which 28 are affordable and seven are market rate. Energy efficiency features include a building envelope equipped with high R-value insulation that exceeds building codes, water-conserving fixtures, and Energy Star qualified windows, appliances, and lighting. Gauvreau Place provides much-needed affordable housing for Lewiston, where rents have increased significantly in recent years. Among the new residents, there are 17 households who were living in a shelter or a hotel when they applied, and four households at risk of becoming homeless.
  • Bateman Partners, LLC’s Shipyard Brewing Redevelopment in Portland, is truly a mixed-use development, consisting of office, pharmaceutical manufacturing, brewery, hotel, and residential uses, all wrapped around, and over, a pre-cast concrete parking structure. Bateman Partners was asked by Shipyard Brewing to participate in the redevelopment of this property and the final plan created over 450,000 SF of new structures, representing the largest project built on the Portland peninsula in over 35 years. One of the major challenges faced during construction were the existing site conditions. The environmental remediation of the underlying soils, which were contaminated, required over $2M dollars in removal costs. The completed project represents an example of how a collaborative effort between the city, abutting neighbors, and owners can accomplish responsible development that is meaningful.
  • Portland Foreside Development Company’s Reconstruction & Reuse of Historic Building 12 in Portland has embarked on a multi-phased project to revitalize and reimagine a 10-acre neighborhood along Portland’s historic eastern waterfront. The reconstruction and reuse of Historic Building 12 was a complex piece of this larger project. After a detailed evaluation found it to be in poor condition, Foreside Development worked with a talented team, including the City of Portland, to undertake significant planning, permitting, documentation and preservation efforts that resulted in the disassembly, relocation, and reconstruction of historic Building 12. With careful documentation of the original building, including 360 laser scans of the facades, the original masonry structure was fully disassembled. The brick was cleaned and stored, and the post and beam timber, as well as salvageable joists and floorboards, were saved for reuse. The Building 12 footprint was then relocated 200 feet from its original location to a new home at 115 Thames Street, making way for construction of the roadway network identified in the City’s Master Plan. Historic Building 12 now houses a restaurant (TWELVE), office space, and a residential condominium, and has maintained its most notable feature – the recognizable ‘Portland Co.’ sign painted on the exterior western facade.
  • Zachau Construction’s L.L.Bean Corporate Headquarters in Freeport, a $110M, 390,000 SF Building, sits prominently on Route 1 in Freeport and has unique building features, including large entrance columns and a 900-seat conference center and events center. L.L.Bean decided to redevelop an existing warehouse building and create an office for the entire company to share. With multiple gathering spaces throughout the headquarters, it’s designed to be a place of collaboration. The pandemic actually expedited the project timeline by almost two years while L.L.Bean had their employees working from home. By providing this new facility for their employees, L.L.Bean is investing not only in the state but in their people.
  • Developers Collaborative’s Freedom Place at 66 State Street in Portland originally planned to be redeveloped into market-rate condominiums, a new vision was created for the building as a transitional housing complex for women after Developers Collaborative built a relationship with Amistad, a non-profit social services agency. Known as Freedom Place, this fulfills a significant unmet need in the Portland community and is a rare example of anti-gentrification. The facility provides residents with 38 single-occupancy bedrooms, communal bathrooms and kitchens, and gathering spaces, and Amistad offers residents wrap-around services including vocational training and treatment and recovery programming. Furthermore, to provide a full continuum of housing options for the community, a second phase of development providing 30 additional units of affordable housing is currently under construction on the site. The project enhanced the energy efficiency of the existing building and reinvigorated the existing on-site geothermal well to provide heating and cooling to both Freedom Place and the adjacent new affordable housing development. Freedom Place’s geothermal well has the distinction of being the first built in the city of Portland.
  • JB Brown & Sons & FD Stonewater’s 68,000 square foot Department of Veteran Affairs / New Community-Based Outpatient Clinic in Portland services more than 100,000 Maine veterans with primary care and specialty health services. The clinic also serves as a teaching site with space dedicated to enhancing affiliate relationships with Tufts Medical School and Maine Medical Center. The exterior design honors veterans, incorporating large graphics of service members in the two-story glass entry. An adjacent three-story, 385-space parking garage offers easy access into the clinic with a drop-off circle. Equipped with over 1,500 Solar Panels, the Clinic is the largest parking garage-mounted solar canopy in the State. The project also added a 10-foot pathway running the 1,400-foot length of the property, making the West End neighborhood more pedestrian-friendly.

MEREDA congratulates its 2022 Notable Project Award Recipients and thanks its Membership for their continued commitment to responsible development in Maine.  Each project will be recognized in the Maine Real Estate Insider e-newsletter published by Mainebiz, running Summer of 2023.

For more information on these impressive projects, please click here or visit www.mereda.org.

June 6, 2023 at 6:00 am · · Comments Off on Building Solutions: MEREDA Spring Conference Tackles Housing Crisis

Building Solutions: MEREDA Spring Conference Tackles Housing Crisis

PORTLAND, Maine – On Thursday, May 25th, the Maine Real Estate & Development Association (MEREDA) hosted its annual Spring Conference where some 300 real estate professionals gathered at the Holiday Inn By the Bay, as well as virtually, to discuss solutions to Maine’s housing crisis. A complex issue rife with challenges such as low housing inventory, rising construction costs, labor shortages, inflation, and a possible economic recession on the horizon, the MEREDA event provided an opportunity for industry professionals to come together to learn from both local, regional, and national experts with a range of perspectives and insights.

“Housing is perhaps the most important topic for our state and our industry. We need more housing; more affordable housing, more workforce housing, more multi-families, more single-families…more everything,” said MEREDA President Craig Young. “It impacts our economy and it impacts the well-being of Mainers in every community. You simply cannot discuss development without discussing solutions for Maine’s housing crisis. To tackle important issues like this, we need to create opportunities to foster discussions with people who have different ideas and opinions. Let’s talk with each other and learn from each other and work with each other.”

With the goal of learning from different perspectives, the event kicked off with Keynote Speaker Sonja Trauss, the Executive Director of YIMBY Law, a national organization with the mission of ending the housing shortage and achieving affordable, sustainable, and equitable housing for all. YIMBY, or “Yes in My Back Yard,” was founded in San Francisco and now has 43 chapters in 19 states. Trauss is known for her relentless pursuit of affordable housing solutions and her innovative approach to addressing the nation’s housing crisis. She outlined YIMBY’s methods for organizing and fighting for housing solutions in communities, stressing how communities need people to speak up for housing and participate in local politics. “We need regular people speaking up for housing. If we don’t organize, only NIMBY shows up.” Trauss went on to discuss some of the policies that support abundant housing for communities, such as legalizing Accessory Dwelling Units (ADUs) and streamlining permitting.

Trauss’s national perspective was followed by a presentation on the macro-economic forces impacting housing by Kenneth J. Entenmann, the Chief Investment Officer and Chief Economist at NBT Bank. Situating the housing crisis within the classic economic equation of supply and demand, Entenmann’s discussion ranged from the definition of a recession to interest rates, and from the banking crisis to his concerns on the commodity market. Next, Elizabeth Frazier of Pierce Atwood, provided an update on the state-wide policies that are supporting housing creation and the current list of priorities for the state’s Housing Committee.

After a recognition of MEREDA’s 2022 Notable Project recipients and the reveal of the MEREDA Index, a key economic indicator for Maine, the conference concluded with a panel discussion featuring Nathan Szanton of The Szanton Company, Daniel Stevenson of the City of Westbrook, along with Keynote presenters Sonja Trauss and Kenneth Entenmann. The panel was moderated by Shannon Richards, Founder of Hay Runner and a MEREDA Vice President, as well as John Finegan, an Associate Broker at The Boulos Company. The dynamic discussion highlighted the wide range of intersecting issues at play when discussing housing solutions. Szanton provided insight into the complex way affordable housing projects are funded, while Stevenson discussed the success the City of Westbrook has had in facilitating and promoting housing creation, sharing several recent projects. The panel went on to discuss the dynamics affecting housing prices, the demographics of housing buyers, and the impact from the lack of young people entering the trades for a career. A question on whether Inclusionary Zoning (IZ) was an effective way to make housing more affordable, led to a discussion of some of the unintended consequences of it, such as how there have been no new housing projects over ten units since Portland’s IZ ordinance was passed. Trauss gave a helpful analogy, saying, “You’re taxing new housing. We tax things we don’t want, like cigarettes. You’re taxing density.” The panel all agreed that the ordinance was having the opposite effect of its intention.

MEREDA’s Spring Conference brought together people from across industries and experts from across the country to tackle Maine’s Housing crisis and propose solutions. While some specifics were debated, at the end of the day everyone agreed that Maine simply needs more housing, and that any kind of new housing development will help lower the cost of housing.

May 30, 2023 at 9:25 am · · Comments Off on Interest Rates Take a Bite Out of Real Estate in 2022: 2023 MEREDA Index Unveiled at Spring Conference

Interest Rates Take a Bite Out of Real Estate in 2022: 2023 MEREDA Index Unveiled at Spring Conference

On May 25th, over 300 real estate insiders gathered both in-person at the Holiday Inn By the Bay and virtually for the Maine Real Estate & Development Association’s (MEREDA) annual Spring Conference. As part of the Conference, MEREDA released its 17th edition of the MEREDA Index. A key economic indicator for the state of Maine, the latest edition of the MEREDA Index showed a decline of 0.8% between 2021 and 2022. The decline was driven by the typically thriving residential sector, which fell 7.3% as interest rates began to seriously bite into the market. However, the commercial market and construction sector saw some solid growth in 2022. Beyond the data, the MEREDA Index also highlights “boots on the ground” perspectives from leading experts in Maine’s real estate industry which help to paint a full picture of the activity in the marketplace.

“2022 was another fascinating year for Maine’s real estate economy, with strong demand, limited supply, and inflation impacting the shape of the markets,” shares MEREDA President Craig Young. “With residential prices continuing to increase, buying a home in Maine remains a challenge. We want people moving to Maine, and we also want the Mainers who already live and work here to be able to access safe and affordable housing. This truly is the issue our generation must collaborate on to find viable solutions that move our state in the right direction.”

The MEREDA Index is a measure of real estate activity designed to track changes in Maine’s real estate markets. The Index is a composite of nine seasonally adjusted measures reflecting both new development and transactions involving existing properties and it covers both the commercial and residential markets statewide. This most recent edition covers the year 2022. The MEREDA Index was tabulated by economist Dr. Charles Colgan with commentary from Stephen Nahley of East Brown Cow, Leanne Nichols of Keller Williams Realty, and Drew Wing of Zachau Construction. This edition of the MEREDA Index was underwritten by Eaton Peabody, with support from Katahdin Trust Company and XPress Copy.

To download a copy of the report or watch a video about the MEREDA Index, please visit www.mereda.org.