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Why some developers are intentionally delaying housing production inside Maine's old mills

Nicole Ogrysko/Maine Public

On the right, Picker House is being redeveloped into 72 income-restricted and market rate apartments. Plans are in the works to eventually redevelop the rest of the Continental Mill, center, into 375 apartments.

Originally published at Maine Public March 4, 2024, by Nicole Ogrysko.

It's fairly busy inside the former Continental Mill in Lewiston in late January, where contractors are sanding down newly- installed sheetrock on the first floor.

A few floors above, workers are removing the plywood that covered the mill's windows for decades and are replacing them with brand new glass.

Some 1,200 people once worked here during the mill's heyday, picking out the impurities from the cotton before sending it through the textile-making machines elsewhere in the complex.

Nathan Szanton steps inside Picker House Lofts, the nearly 80,000-square-foot section of the former Continental mill complex that he's redeveloping into 72 income-restricted and market rate apartments.

"I love old mills," he said. "I think they have tremendous character."

Szanton points out the high ceilings and large windows and overhead carrying beams, features that he said make these mills ideal places to live.

The apartments are set to open next March, but Szanton said they could have been ready a year earlier. That's because while Picker House Lofts qualified for more than $9 million in Maine Historic Rehabilitation Tax Credits, Szanton can only claim up to $5 million in tax credits a year, forcing him to intentionally stretch out the project.

"We slowed down our design process by about six months, and we slowed down our construction process by about six months, in order to stagger the construction over a two-year period rather than a one-year period," Szanton said.

It's counterintuitive for developers to intentionally move slowly on these projects, Szanton said, especially as construction costs have risen dramatically in recent years.

Szanton's company redeveloped a mill in Biddeford back in 2015. The project was similar to Picker House Lofts and cost $115 a square foot to renovate. Today, the Szanton Co. will spend $236 a square foot to redevelop Picker House Lofts.

Nicole Ogrysko/Maine Public

Nathan Szanton and his company are redeveloping Picker House, a section of the former Continental Mill complex in Lewiston, into 72 income-restricted and market rate apartments.

These challenges are being felt around the state.

Next door to Picker House Lofts, the rest of the former Continental Mill is quiet.

The New Hampshire-based developer Chinburg Properties purchased the mill back in 2019. The company is preparing to submit plans for the redevelopment of the remaining 440,000 square feet into 375 apartments. The project has idled for multiple reasons, said Chinburg Properties' Matt Assia. But he acknowledged it has taken a long time for the company to make the numbers work.

In Portland, there have been several attempts to breathe life into the historic Time and Temperature building, but the plans never panned out. A new group wants to transform the building into a hotel and 140 small apartments, but developers face high renovation costs and long timelines made more challenging by the $5 million tax credit cap.

And at the former Lockwood Mill in Waterville, developers are transforming one wing into 65 affordable apartments. The project is eligible for about $15 million in historic tax credits, but because of the $5 million annual cap, construction will be spread over three years.

"We're placing roughly a third of the units in service in 2024, a third in 2025, and a third in 2026, which is very complicated for our construction schedule," said Mariah Monks of the North River Co., which is developing the mill.

Maine first launched the state's Historic Rehabilitation Tax Credit back in 2008. The program has helped produce more than 115 projects around the state and created more than 1,400 housing units. Most are considered affordable.

But there's an ample amount of unused space in historic structures around Maine.

"We're talking hundreds of thousands of square feet that is already here," said Nancy Smith, CEO of Grow Smart Maine. "It just needs to be brought back to life."

There are old mills and historic buildings from Skowhegan to Eastport that are prime candidates for housing or mixed-use redevelopment. Smith said these historic rehabilitation projects often provide more environmental benefits than new construction, because builders reuse existing materials on land that has already been developed, rather than vacant land that could be conserved or used for agricultural purposes.

And she said these projects often face fewer community obstacles than new housing construction, because local residents are already familiar with the building.

"If they've been living next to a dead building, and particularly if it's a building where their father or grandmother worked, there's a heart connection that you're not going to see with new construction," she said.

Many planners and preservation advocates also see the redevelopment of old mills as a major component of downtown revitalization efforts.

"One feeds the other. You need an attractive downtown to make it an attractive place to live," said Lincoln Jeffers, economic and community development director for the city of Lewiston.

These historic spaces are often ideal sites for new housing, because they're typically located in what were once walkable downtown centers, Jeffers said.

Courtesy Of The Szanton Company

A rendering shows Picker House Lofts, which is expected to be complete in March 2025.

"Nobody needed cars. Everybody walked everywhere," he said. "You could buy your furniture at FX Marcotte, which is right across the street from the train station and right next to the mill that you might be working in. So that was the model back then, and that's kind of what the world is moving to again."

Some of Lewiston's old mills have been redeveloped within the last decade or so. The Bates Mill Complex serves as an example of what could be, Jeffers said, but the city still has tens of thousands of square feet of underutilized or vacant mills that could be converted.

At the same time, the need for housing in Maine's second-largest city is evident; a new 18-unit building in Lewiston recently received more than 500 applications.

"We need housing across the board," Jeffers said. "We need affordable housing. We need market-rate housing. We need higher-end housing, the whole gamut. And with construction costs right now, it's very challenging."

To address the tax credit limitations and housing production delays, the Legislature is considering a bill that would double the maximum historic tax credits that developers can take in one year, from $5 million to $10 million. But it faces an uncertain future in Augusta, where lawmakers were divided in committee.

Szanton acknowledges that it's frustrating to have to tap the brakes on the redevelopment of Picker House Lofts, particularly when Maine needs more than 80,000 new homes by the end of the decade to current and future demands.

"It's like a game of musical chairs, where there aren't enough chairs," he said. "Here we don't have enough housing units. We literally don't have enough housing units for the people who want to live in Maine, and as a result, there are people who are left out."



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