Big Bayside development deal scrapped
Tight economic times doom project on railway land
By Chris Busby
A major redevelopment project planned for Portland’s Bayside neighborhood has evaporated in the face of uncertain financial times, city officials said today.
Atlantic Redevelopment Co. was in the process of negotiating with the city to buy a parcel of land along Somerset Street – part of a larger, 3.5-acre project intended to be a new “gateway” into Portland – when the company bailed out. The City Council will decide how to proceed with the former railroad property in coming months.
City Planning and Development Director Lee Urban said Atlantic representative Jim Hanley cited the recent “credit market meltdown” and gloomy economic forecasts for the near future in explaining the company’s decision. Hanley did not return a call seeking comment late this afternoon.
Atlantic is headed by Ted West, the developer who’s bought land from the city in the past to build in the area around the intersection of Preble Street and Marginal Way. The new AAA and Gorham Savings Bank buildings are projects West recently completed, and work is underway on a multistory office building and parking garage West’s company is developing at the northeast corner of the intersection.
This latest project was to include a parking garage, several office buildings, retail space, and 60 or more condominiums or apartments, all located along Somerset Street between Pearl and Elm streets. Urban said the city had been going back and forth with Hanley and West over exactly what mix of uses Atlantic would create, when economic factors compelled the company to step away. Urban said the total value of the development under discussion was between $50 million and $60 million.
Cash from Atlantic’s purchase of the Somerset parcel was intended to go to The Trust for Public Land. The nonprofit conservation group is involved in a complicated deal with the city by which the trust is helping to finance the city’s effort to relocate one of two scrapyards in Bayside to land out on Riverside Street. In return, some acreage at Riverside will be maintained as open space and a recreational trail will be built along the Bayside property.
Urban said the city needs to pay the trust “sooner rather than later,” but added that Atlantic’s departure does not put the city in a serious financial pinch – that is, assuming a new deal for the parcel can be inked in the not-too-distant future. Other aspects of the arrangement with the trust will not be directly impacted.
To draw development interest in the Bayside land, the city partnered with CB Richard Ellis/The Boulos Company to market it and help find a qualified buyer willing to build a project in keeping with plans for the resurgent industrial neighborhood. Boulos real estate broker Drew Sigfridson, who helped lead that effort, did not return a call seeking comment today.
The site attracted interest from several big developers with ties to the area, including The Olympia Companies, The Gottesman Co. (a Texas-based firm that developed the site Whole Foods Market occupies nearby), and Mugar Enterprises (a Boston-based company that’s owned and operated parking garages in Portland). Community Counseling Center, the nonprofit behavioral and family health organization based in Portland, was also reportedly interested.
When West’s company got the nod last summer, city officials were optimistic. “They’re men of their word,” Urban said of West and Hanley, as quoted in a June 4 Portland Press Herald article. “If Ted says he’s going to do something, it’s going to get done.”
“Nothing worth doing is ever easy,” Urban said today. But ever upbeat, he added that redevelopment of the old railway land is still “doable.”
City Councilor Kevin Donoghue, whose district includes Bayside, has been critical of the city’s decision to let The Boulos Company spearhead the deal.
“We need to reevaluate whether insider dealing is really an advantage, or revisit competitive bidding as a land-disposition strategy,” Donoghue said. By “insider dealing,” Donoghue said he was referring to the negotiation process underway when the deal fell apart. “The actual negotiations were so far removed from elected accountability as to effectively be [taking place] in a black box.”
When the Council takes up the Bayside land issue again, Donoghue said the city should first work to better define what type of development is desirable there, and then proceed with a public, city-administered request-for-proposals process.
“It’ll move quicker, because [the process] will be more transparent and less people will be distrustful of it,” said Donoghue.
Ron Spinella, chairman of the Bayside Neighborhood Association, said he has “mixed feelings” about the demise of the deal with Atlantic. Though the prospect of new development – particularly new residential development – was encouraging, Spinella said the neighborhood group has “always thought there must be some opportunity there for some development outside [that proposed by] the usual suspects.”
“It’s nobody’s fault” that the deal disintegrated, Spinella said. “It’s just a hard time right now.”
Indeed, news of this deal’s demise comes on the heels of news that another big project proposed for Bayside, a condo tower on Cumberland Avenue, may be developed as rental apartments instead.