Maine Real Estate & Development Association Recognizes Retiring Board Member

The Maine Real Estate & Development Association (MEREDA) has announced that Lawrence A. Wold, president of TD Bank has retired from MEREDA’s Board of Directors after 18 years of service. During this time, Larry served as president from 2000 – 2002 and was recognized with MEREDA’s Volunteer of the Year Award in 2003.  During his tenure, Larry spearheaded an initiative to assist with MEREDA’s new member recruitment efforts.  Fourteen years later, the TD Bank Membership Recruitment Matching Funds Program continues to help introduce new members to the organization and makes a major contribution to MEREDA’s continued growth and success.

“MEREDA has benefited significantly from Larry’s wisdom, broad experience, and unwavering support through the years.  We are grateful and thank Larry for his countless contributions to the organization,” commented Shelly R. Clark, Vice President of Operations for MEREDA.

For further information, please contact MEREDA’s Vice President of Operations, Shelly R. Clark at 207-874-0801 for visit www.mereda.org.

 

 

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3 Ways to a Faster Commercial Mortgage Loan Decision

By Aaron Cannan | Senior VP, Commercial Services Officer, Katahdin Trust

When you want to make a real estate investment or re-visit your existing financing, the last thing you want to do is spend your time waiting for a lenders credit decision. Fortunately, you can help speed up the decision process and increase the chances of having your loan approved by taking the following actions before you submit your application.

The current finance marketplace includes a wide array of lenders which include traditional, platform, and peer-to-peer options.  Each offers wildly varying qualification requirements, servicing standards and loan programs.  Each investor has different priorities on their financing.  Understanding your own individual priorities will guide you on picking the most appropriate financing partner.

Approach a Community Bank

Maine benefits from a very healthy banking industry.  Maine Banks are pillars of their respective communities.  Their employees are your neighbors and are active community volunteers.  Most important and relevant to this topic, Maine Banks want to lend money!

Although some obvious bias should be noted, this writer firmly believes that community banks offer the best combination of loan terms, loan interest rates, loan servicing, and customer service.  Further, credit decisions in community banks are made locally.  “Buy Local” is a popular mantra in today’s economy.  This certainly applies to where you do your financing.   Local credit decision making is not just a marketing tag line.  Not only is local decision making based in local knowledge, but it tends to be more responsive and timely.

Be Prepared

When you apply for a commercial mortgage loan, you’ll need to give your potential lender a complete picture of your financial background.  In addition, the lender will need to review the financial history/projections for the investment being financed.  Often this will include tax returns, financial statements, and asset and liability documentation. Having these materials in hand at application will put you ahead of the curve and clarify any questions a lender may have about your financial history. Organized documentation of your financial history conveys many positive qualities and attributes to a lender.   Full disclosure of both positive and negative factors in your financial history early in the process will speed the application and underwriting process.

Build a Team

Any successful investor or businessman depends on a strong team of supporting professionals. Finding trusted experts to work with you, such as an accountant, an insurance advisor, and an attorney, will create a foundation for your business’ success.  Identifying and communicating clearly with a team of experts at the early stages of an investment decision is important.  Managing the tax, legal, and insurance environments are critical elements to an investment.

By connecting with those professionals early on, you’ll show lenders that you’re serious, committed, and credible. You’ll also build relationships with people who can not only help you with your current project, but also be an on-going resource over time.

Final Thoughts

Getting a fast decision on your loan might take a little more preparation in the beginning, but by taking these steps, you’ll increase your chances of a positive outcome, and the information, plans, and professional contacts you gather will be vital to your business’ success long after your loan is closed.

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Aaron Cannan is a Senior Vice President and Commercial Services Officer for Katahdin Trust and is responsible for small business lending and development in the Southern Maine Area.  Aaron has been working hand-in-hand with businesses for almost twenty years and is committed to helping businesses succeed. Click here for more information on Katahdin Trust.

Article originally posted here:
www.katahdintrust.com/ContentPage.aspx?name=REI+Blog+Post+1

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Homeownership Remains Affordable; Rentals Less So

Richard E. Taylor, Research Manager at MaineHousing

MaineHousing has released the 2015 Maine Home Ownership and Rental Affordability Index. This latest index reveals little change in affordability from 2014 to 2015 for both home buyers and renters in Maine. Home buying remains affordable while renting is still unaffordable though showing signs of improvement.

Homeownership Affordability

The index, used by Maine housing market analysts, provides a statewide and county snapshot of home buying and rental affordability. The home buying measurement is based on the ratio of home price affordable at median income to median home price. A ratio at or above 1 indicates homes are affordable while an index of .99 or below indicates they are not affordable.

For the second year in a row the index indicated that home buying in Maine remained affordable, although the index dropped from 1.04 in 2014 to 1.03 in 2015 due to a 4% increase in median home prices over 2014. The improved home affordability we’ve seen over the past two years is due in part to the post- recession declines in median home prices, interest rates, and consumer confidence. Median home prices plunged 14% from a high of $185,900 in 2007 to a low of $158,000 in 2009. From 2010 to 2014 prices improved only a mere 3%. As home prices fell so too did interest rates from a high of nearly 7% in July of 2006 to a low of 3% in December of 2012. Declining interest rates and home prices should have stimulated the real estate market but consumer wariness dampened buying. Higher inventories of foreclosed low priced housing, an unwillingness of owners now owing more than the value of their home to sell, and the tendency of buyers to wait for the market to hit bottom all contributed to the slow housing market recovery.

Improving median incomes should also have helped improve the housing market but the increases in income, like the recovery itself, was too little and too slow. Between 2005 and 2009 median household income actually increased 9% but slowed to just 2% from 2010 to 2014. The slow growth in income and an even slower growth in median home prices have combined to make buying a home affordable.

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Another variable to consider is the home vacancy and home ownership rates. A continued ten year downward trend in vacancy and ownership rates could further dampen the chances of more robust increases in the median home sales price. The relationship between inventories and house prices is generally positive with inventories rising with increased home prices. This relationship seems contradictory. With all else the same, rising house prices will draw homeowners into the market increasing inventory while lower prices provide less incentive to sell.

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Another interesting development is the increasing preference to rent as opposed to buying despite the favorable conditions for buying.Decennial Census data from 2000 to 2010 revealed the preference for renting. More recently the 5-year Census numbers corroborated this shift to renting.

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An outlier with potential impact on home buying affordability is the millennial generation. This generation has not entered the home buying market at similar rates as preceding generations. Their reluctance to enter the market has been discussed in numerous studies that focused primarily on the economic and financial challenges they have faced or witnessed since the recession ranging from student loan debt to lack of savings needed to make a down payment. Recent data suggests their preference for renting in Maine remains stronger than buying. Between 2009 and 2014 millennial homeowners, 25  34 declined 13% while renters of this age increased 4%. In addition, this segment of the population is projected to peak in 2017 and then decline as a percentage of the total population. Still, at an estimated 229,000 strong, they can impact housing and evidence suggests they will in the coming year.

Finally, it should be pointed out that while buying a home has become more affordable, owning one is often not. In 2014 33% of owners with a mortgage were paying more than 30% of their income on housing related costs — an improvement from 35% in 2009. The percentage of owners without a mortgage paying over 30% of income on housing dropped from 18% to 17% over the same span of time. Despite the improved numbers, these homeowners are considered cost burdened.

Rental Affordability

The rental affordability index measurement is based on the ratio of a 2-bedroom rent affordable at median renter income to average 2-bedroom rent. An index of less than 1 means the area is generally unaffordable while an index of 1 or above indicates affordability.

In 2015 renting an apartment remained unaffordable. Historically buying a home had been financially more difficult than renting. That changed in 2011, just two years into the recovery. Unlike home buying, the renting index actually improved from .84 in 2014 to .89 in 2015 due to a slight drop in the average 2-bedroom rent statewide. The reasons renting remains unaffordable in Maine are rooted, like home buying affordability, in the recession.

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Demand for rentals increased when we saw a rise in foreclosures during and immediately after the recession. Reluctance about buying a home combined with the impact of higher unemployment and slow income growth coming out of the recession all worked to slow homeownership and make renting appear to be a better option. Additionally rental units, though older than owned, generally have fewer bedrooms and less space making them a more attractive option from a heating cost perspective. Add to this tougher credit restrictions and the need to save for down payment and closing costs for buying and you have increased demand for renting. The problem has become particularly acute in the Portland and Rockland regions, reflecting Maine’s population shift toward the southern and coastal areas.

Average 2-bedroom rents decreased 3% from 2005 to 2009 far less than the 14% decrease we saw in home prices. Unlike home prices however, average rental prices then increased 7% from 2010 to 2014. As this was happening median renter incomes rose from 7% 2005 to 2009 but then decreased 5% by 2014. The chart below illustrates how increasing average 2-bedroom rents outpaced renter income. The exact opposite happened to home buyers.

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Renting will remain unaffordable in Maine through 2017 and possibly into 2018 as a result of a limited supply. Despite a recent increase in permit activity for multifamily residential units, the supply of single family (owned) homes has grown significantly faster than rental units over the past three decades. Nationally, multifamily construction has led the way during the recovery but not as much in Maine. In fact, multifamily construction in Maine has lagged behind single family construction for three decades. Nearly 84% of residential permits in Maine were issued for single family units in contrast to 16% multifamily since the 1980’s. Absent more rental construction, the rental vacancy rate will continue to decline and if demand continues to increase so will rents. In addition, as more owners now find themselves able to gain from selling their home instead of renting it, rental stock will drop putting additional upward pressure on rents.

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Another important variable that will keep demand on rental units high is renters’ income. Of 158,000 renter households only an estimated 25% (37,280) earn enough to buy a home at the median home price. And, 52% of renter households in Maine pay more than 30% of their income for housing and 80% of those pay over 35%. Additional supply of rental units is needed to meet both general market demand and a growing population of Maine renters needing rental assistance.

The Future

Buying a home should remain affordable through 2016 and possibly into 2017. While continued growth in jobs and income, home prices and interest rates should improve overall market conditions, it will likely happen at a slow pace. For buyers, the continued down payment and closing cost assistance program now incorporated as part of MaineHousing’s First Time Home Buyer Loan Program will add additional home buyers and in particular millennials. In 2015 nearly 60% of program participants were millennials — a homebuying rate that exceeds the market at large and suggests that millennials do indeed want to buy. Looking to the future, as the market improves for buyers, affordability will decrease. Buying a home is affordable, for now.

More quality supply is needed to alleviate housing affordability for renters in Maine. Declining vacancy rates and increasing rents are limiting the market for renters particularly in the coastal counties and urban areas. MaineHousing can seek to bring more renters into the home buying realm with targeted down payment and closing assistance. However, with slow income growth, many of these buyers will likely be cost burdened. Improved utilization of available energy assistance programs might reduce cost burden but the gains, given incomes, might only be marginal for renters. Renting in Maine still has a way to go before it becomes affordable. As long as it remains unaffordable, rental assistance programs such as Housing Choice Vouchers and the construction of subsidized housing will remain a necessity.

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Construction considerations in the craft beer industry

by Mason Rowell, Landry/French Construction Company

2016-06-14_BreweryPhoto3-1The explosion of craft brewing in the recent years has created a need for support of breweries from other industries, including construction and real estate. In a study conducted by the Brewers Association, the number of operating breweries in Maine increased by 13% in 2015, and the Maine Brewers’ Guild projects a total of 80 operating breweries in the state by the end of 2016. These small, independent and traditional brewers have plenty of room for continued growth as the industry shows no signs of slowing. Not only is the craft brewing industry booming, but the industries that provide supporting products and services are as well.

It is important for brewers to consider what they ultimately want and need in a space from the start in order to foster sustainable growth. Contractors can play a crucial role through the entire decision making process, from assisting in pre-planning and evaluating raw space to building or renovating to planning for future expansion.

All breweries have basic needs

Finding the right space to accommodate a brewery’s basic needs can take a long time, even up to a year in some cases. Often a brewery will consider the surrounding area and community more than at the actual space itself. Many even take unique spaces and convert them for their business. From the repurposed wharf in Belfast that Marshall Wharf Brewing Company calls home to the historic rail facility currently being renovated for Bissell Brothers Brewing Company at Thompson’s Point in Portland to former landscaping and salt shed that now houses Fore River Brewing Company in South Portland, brewers are getting creative in their renovations. However, unique facilities create challenges for the construction team to identify and address. It is imperative for contractors to work closely with brewers to problem solve issues early on in order to create a smooth start-up process.

Power, water quality, ceiling heights, venting, structural capacity and durability of flooring, and drainage are all major concerns when building out or renovating a brewery. For instance, brewing equipment can be rather large depending on the batch size the brewery produces. Standard size equipment can range anywhere from 300 to 1,200 square feet depending on the selected barrel system, and have heights in excess of 30 feet. Weighing these factors and how they impact a facility’s ceiling heights, floor space and access all require careful consideration in the planning process. Growth and expansion are best considered at the outset rather than as an afterthought. Including these plans into initial construction design is critical.

At the recent New England Craft Brew Summit, hosted by the Maine Brewers’ Guild, Peter Bissell, of the Bissell Brothers Brewing Company noted, “You need to look at the forest from the trees and always think of what’s next.”

When consulting with brewers, it is important to help them think about the space in terms of expansion over the next three to five years.

Tasting Rooms

Tasting rooms have become increasingly popular at breweries, as they provide an opportunity to share product with patrons, test out new brews and help increase revenue. Constructing a tasting room within a brewery brings up a number of additional considerations. These can include additional fire/life safety and separation, along with adequate egress routes in case of an emergency. Additional onsite parking is usually required due to increased traffic at the brewery. Finally, local authorities should be consulted, so that beer/liquor and food licensing requirements are clearly understood before a tasting room construction commences.

Partnering for the future

Young breweries do not always have a lot of capital for construction initially. However, it’s worth keeping in mind that the need for expansion often comes quickly and needs to be accounted for in initial construction. This need for expansion underscores the importance of developing a trusting relationship between the contractor and brewery, as both parties are integral to achieving mutual success.

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The Right Equation for Responsible Development: Spotlight on The Press Hotel

press hotel plaque photoIn the first of a 6-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, social impact and job creation.  Please join with us in celebrating The Press Hotel.  A conversation with developer, Jim Brady, Brady Enterprises.

MEREDA:  Describe the building and project.

Jim Brady:  The Press Hotel is Portland’s first lifestyle boutique hotel, located at the corner of Congress and Exchange streets, directly across from City Hall. It consists of 110 luxury rooms, the Inkwell Bar, the 73-seat Union Restaurant and an art gallery that showcases local artists.  It sets itself apart from other hotels in the city by the way it tells the story of the historic Gannett building, former home of the Portland Press Herald offices and printing plant. The interior design elements include typewriters on the wall, type letters and headlines “dripping” down the corridor walls onto the carpet, and the large scale that was used to weigh enormous rolls of newsprint. It retains many original architectural details, including the original staircases and banisters, as well as vintage exterior lettering.

The project itself was complicated. The financing structure was extremely complex for a variety of reasons, partially because as an adaptive rehabilitation of an historic building in an historic district, we were eligible for both state and federal historic tax credits. New Market tax credits were involved, as well, and then the IRS changed its regulations during the lead up to the closing, which caused a restructuring of the entire deal.

MEREDA:  What was the impetus for this project?

Jim Brady:  We really wanted to create a differentiated product that would offer a unique experience for each of our guests; an experience that highlights the best of Portland’s exciting food and arts scene while honoring it’s valued past. We wanted to present a truly new and innovative hotel experience.  We accomplished this by assembling a fantastic design team led by Stonehill & Taylor, an internationally-recognized interior design company that collaborated with Maine-based VIA Agency to tell the unique story of the building’s history.

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

Jim Brady:  We put the building under contract in July 2012, and construction began in January 2014, so just about 18 months. The permitting process went relatively smoothly because we were seeking approval for an adaptive reuse of a well-respected historic building in the Congress Street historic district with no major exterior changes. Construction lasted about 16 months, and the hotel opened in mid-May 2015.

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

Jim Brady:  The most challenging aspect was the complex financing structure. There was certainly a learning curve while working within the constraints and limitations of the three varied tax credits.

MEREDA:  Something unexpected you learned along the way was …

Jim Brady:  That so many former Portland Press Herald employees contacted us throughout the process … and still do … to say how pleased they are that the building and its history has been so thoughtfully revitalized and honored. The stories they’ve shared continue to form the story that is The Press Hotel.

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

Jim Brady:  The Press Hotel celebrates the history of the Gannett building and it’s publishing history, which our guests, as well as residents of Portland, truly appreciate. The hotel draws people from the Old Port to upper Exchange Street and Congress Street.  It’s a destination for locals and guests alike.

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MEREDA Index comes in at a healthy 91

The latest numbers indicate high water marks achieved for sales prices and square footage sold

Spring 2016 Index Graphic 91 w Boulos as sponsorLast week, the Maine Real Estate & Development Association, announced that the latest MEREDA Index had achieved a healthy 91, indicating that as Maine sales continue to achieve high water marks for sales prices and square footage sold, there will be strong fluctuations from release to release. The MEREDA Index is an economic metric that measures the health of Maine’s commercial real estate market twice annually relative to pre-recession 2006 levels.

The previous MEREDA Index numbers came in at 100 and 110, in the fall and spring of 2015 respectively. Previous to that, the four MEREDA Indexes completed to date, between spring 2013 and fall 2014, had not managed to top 80.

“While the MEREDA Index appears to have dropped from the previous two releases, that relates to the effect of the three large transactions — One and Two Portland Square and 100 Middle Street, all in Portland — primarily felt in the commercial component of the Index and, more specifically, square footage sold. However, the actual dip in commercial exclusive of these very large sales was small. The residential component was a primary positive driver; sales of existing homes and new mortgage originations both saw strong increasing trends,” said Michael O’Reilly, Senior VP at Bangor Savings Bank and MEREDA President, in making the announcement.

The Index has risen 5.2% over the past year, but the past six months have seen a more modest 1% growth, led by a very strong performance in the residential sector. This is as expected, as slower growth in the first and fourth quarters compared with the second and third quarters has become a common theme.

The commercial market component of the Index, which represents fifty percent of the total, suggests a slowing in this sector, up only point five percent over the past year and down slightly over the past six months. The volatile square foot sold and leased measure and the average sales price are the weak points.

The residential market comprises 40% of the Index. This is where we see double-digit growth in the three of the four components over the past year, leading to a strong 13.2% growth in the residential index. Residential permits are up 14%, mortgage originations are up 37%, and existing unit sales are up 17%. The median price index continued a steady climb, now at 95% of the 2007 peak, but the rate of growth in this index is usually the slowest of the residential components.

The construction component of the Index is 10% of the overall whole. Here, construction employment has been the slowest changing components of the Index, up only 12% since its lowest level in the first quarter of 2001 and still 14% below the 2006 level. That said, this report shows a fairly strong showing over the recent stretch, up 3.7% over the year and up 3.4% over the past six months.

“The lack of existing housing stock is driving demand for new residential construction in both the single family and condominium market,” said O’Reilly. “While the construction industry continues to deal with a workforce shortage, the construction component of the Index is exhibiting a gradual rise.”

In fact, the construction component of the MEREDA Index is now at its highest since 2008.

“In the past we have seen growth spurts in construction in the hospitality, senior housing and condominium markets, and the latest spike is in residential apartment building construction,” concluded O’Reilly.

Learn more about this important metric of Maine’s real estate economy by watching the video on our website.

Download the full spring 2016 MEREDA Index report.

View the MEREDA Index archives.

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Employees ‘win career lottery’ at office of the future conference in Portland

MEREDA welcomed Texas-based experts to discuss marriage of space and technology

75 percent of employees, nationally, are not happy with the place they go to work, according to the research and design firm Gensler. Dean Strombom and Sven Govaars of Gensler traveled from Houston, TX to Portland to serve as keynotes at last week’s Maine Real Estate & Development Association (MEREDA) conference. The event, meant to discuss “the office of the future,” included robust conversation about how place and technology work together, with real-world examples from Maine.

The good news, according to Strombom and Govaars, is that 30 percent of employees feel engaged and enjoy their work. That said, 18 percent of U.S. employees are unhappy, disengaged and undermine what their engaged colleagues accomplish, and 52 percent are disengaged (just show up, do their job and go home). The focus of the event was how to get that 52 percent engaged, and to discuss the reverberations for commercial real estate, the spaces we build, own, and lease and how the Maine market is changing as a result.

Case in point, the New England-based Creative Office Pavilion was on-hand and set up a sample office, featuring benches (instead of chairs) and a large communal table under a pergola. “This arrangement affords employees in an office to collaborate in a casual setting,” said Bruce Jones, the company’s director of business development and a MEREDA board member. “Some of the best collaborations happen when folks are comfortable and able to share ideas with one another.”

Attendees at the Maine Real Estate & Development Association (MEREDA) conference test out the "office of the future" set up by Creative Office Pavilion to augment the conversation about the same topic, keynoted by two renowned architects from the design firm Gensler who traveled from Texas to speak at the event.

Attendees at the Maine Real Estate & Development Association (MEREDA) conference test out the “office of the future” set up by Creative Office Pavilion to augment the conversation about the same topic, keynoted by two renowned architects from the design firm Gensler who traveled from Texas to speak at the event.

The conversation was augmented by a panel of executives from three Maine companies that have embraced the tremendous business opportunity that comes with providing choice to today’s enlightened worker.

One of those executives, Kathy Shafer, IDEXX’s senior director of worldwide facilities, said that employees at IDEXX can choose whether or not to have a fixed or mobile office, and that many are choosing the mobile. She said that a large part of what makes this work is a paperless environment with wireless printing and other technologies, such as Skype chats and meeting spaces equipped with flat screen TVs. Shafer also noted their wellness center with fitness classes and a health clinic run by Intermed, four dining centers across the campus, and opportunities for on-site gardening, cooking and dancing, which “combine to foster mental and physical health as an important aspect of work.”

“We used much of that same toolkit,” said Paul Larkins, director of corporate planning and construction at Unum Group. Like Shafer, Larkins noted that “teams define their own spaces” at his company. In fact, he said that only 63 percent of employees are in the office daily and that they “rely on engaged employees to stay on top of the trends and opportunities.”

“Colorful, clean, engaging space means a lot,” said Brett Austin, president of Kepware. “Real estate is our primary driver to ensure that employees feel they ‘win the career lottery.’ It’s a continuing conversation: we always try to help people live their lives while keeping them highly engaged. And, in fact, in 2015, 98% of our employees were ‘highly engaged.’ This has made Kepware a lot of money.”

“Companies no longer have to undertake a massive expansion when they are adding new employees,” said Brian Curley, MEREDA board member and president of PDT Architects. “Instead, companies can be creative in terms of reducing the amount of square footage needed for each employee and, instead, add amenities and features that keep employees engaged.”

“The conversation offered great lessons for developers and builders here in Maine,” said Michael O’Reilly, MEREDA president and senior VP at Bangor Savings Bank. “As more companies look to expand to Maine, where real estate is more affordable than other locales, and as we see increased development in the commercial real estate space, it’s important that we, as an industry, stay on top of these trends, which help improve employee engagement, performance and well-being, with benefits for companies’ bottom lines.”

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Maine Real Estate & Development Association Awards Top 6 Notable Projects of 2015

Projects from York County to Dover-Foxcroft Received Special Recognition at MEREDA’s 2016 Annual Spring Conference

The Maine Real Estate & Development Association (MEREDA), the state’s leading organization for commercial real estate professionals, has announced the recipients of its 2015 Notable Projects Awards at its annual Spring Conference in Portland on May 17.

“MEREDA is thrilled to recognize these exemplary projects, all of which not only embody MEREDA’s belief in responsible real estate but also involved a significant investment of resources and job creation statewide,” noted Michael O’Reilly, President, MEREDA Board of Directors and Senior Vice President, Southern Maine Commercial Banking Team Lead, at Bangor Savings Bank.

Each of the selected six projects were selected for recognition based upon criteria including environmental sustainability, economic impact, energy efficiency, social impact and job creation.

The recipients of MEREDA’s Top 6 Most Notable Projects of 2015 included:

  • In Bangor, the Circular Block Building: Robert Perry Builders;
  • In Augusta, the Capital Judicial Center: Maine Judicial Branch;
  • In Portland, the Press Hotel: Brady Enterprises;
  • In Dover-Foxcroft, The Mill at Dover-Foxcroft: Arnold Development Group;
  • In Portland, West End Place: LWS Investments and Redfern Properties; and
  • In Biddeford, Pepperell Mill Campus: Doug Sanford

For more information about each of these impressive projects, please click here.

Notable Project Winners

Left to Right: MEREDA President, Michael O’Reilly accepting the 2015 Notable Project Award for The Press Hotel, Doug Sanford for Pepperell Mill Campus, Telford Allen & Bob Perry for the Circular Block Building, Paul Peck for West End Place, Alan Kuniholm for the Capital Judicial Center, and Christian Arnold for The Mill at Dover-Foxcroft.

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Historic Masonry Reborn – “The care of historic brick and stone buildings in Maine”

By Stephen D. Jones, Building Envelope Specialists Inc.

The restoration and repair of historic masonry buildings can be challenging.   Owners who are using Historic Tax Credits to help finance their project are required to meet the standards of the Department of the Interior.

Masonry buildings are inherently difficult to repair.  Deterioration of the masonry assembly is often underappreciated, resulting in escalating repair costs.

On April 5th, MEREDA hosted a presentation by Building Envelope Specialists, Inc., WBRC Architects and Engineers and the Maine Historic Preservation Commission.  As a group, these professionals reviewed and explained the important considerations of repairing a historic masonry building while honoring the historic restoration standards.

Historic Masonry Construction:

Historic masonry construction commonly consists of clay brick, stone and precast concrete units.  The exterior walls are normally load baring.  Mortar joints not only hold the masonry units in place, they also accommodate for expansion and contraction, and act as a moisture weep system.  Repairing these buildings can be costly depending on existing conditions.  Long lasting repairs occur if the building condition is properly assessed and appropriate repair details are applied.

Often building owners are under the misconception that masonry buildings last forever with little or no deterioration over the years.  The reality is that moisture from rain and snow easily penetrates masonry assemblies and causes damage.  When functioning properly, mortar joints help weep out the moisture that penetrates the masonry assembly.  Deterioration of masonry assemblies is often accelerated when mortar joints are repaired using the incorrect mortar recipe.  Dense mortar will hold moisture in, much like a dam, causing accelerated deterioration. In an effort to stop moisture from penetrating, owners will sometimes use sealants on masonry walls.   Masonry sealants will also accelerate the deterioration process by holding in moisture.  This often results in clay bricks spalling.  Understanding how historic masonry assemblies are designed to perform will lead to cost effective and long lasting repairs.

Historic Tax Incentives:

Historic Tax Credits have been used throughout Maine to help the building owners afford costly building repairs.  Meeting the standards of the Department of the Interior is vital for credit eligibility.  Using a historic tax credit consultant can be helpful due to the complexity of the program.

Basic eligibility requirements for state & federal incentives include:

  • Building must be listed in the National Registry of Historic Places or be “certified” within 30 months of the date the tax credit is claimed.
  • Building must be used for an income producing purpose for at least 5 years after completion of the rehabilitation.
  • The project must meet the IRS substantial rehabilitation test – OR – Must incur certified, qualified rehabilitation expenditures of between $50,000.00 and $250,000.00.
  • The entire rehabilitation project must be done in accordance with the Maine Historic Preservation Commission’s or the National Park Service’s interpretation of the Secretary of the Interior’s Standards for Rehabilitation.

Historic Masonry Building Repair Approach:

A masonry assessment is the first step to defining the scope of repair.  Using the data collected, a masonry consultant can define the construction scope required to restore the building’s exterior shell.   Definition of scope along with detailed construction documents can be used to quantify the cost of repair.  The Maine Historic Preservation Commission will use the construction documents to guide the building owner on what is required to meet the historic standards of the Department of the Interior.

Assembling the Repair Team:

A comprehensive consulting team should include an architect, engineer, historic consultant and a masonry consultant.  Together, these professionals provide the capacity to generate a thorough plan that will result in long lasting repairs and will also secure tax credit eligibility.

For more information regarding the repair and restoration of historic masonry buildings contact Stephen Jones sjones@building-envelope-specialists.net or Scott Whitaker swhitaker@building-enelope-specialists.net, and Steven Pedersen, steve.pedersen@wbrcae.com at WBRC.

For more information regarding historic tax incentives, contact Mike Johnson of the Maine Historic Preservation Commission mike.d.johnson@maine.gov or visit their website athttp://www.state.me.us/mhpc/tax_incentives/index.html

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MEREDA’s Morning Menu Breakfast Event – Environmental Update: The Latest from the Trenches in Due Diligence and Changes at the Department of Environmental Protection

Breakfast Logo for Press Releases & Social MediaJoin the Maine Real Estate & Development Association (MEREDA) for breakfast on June 7, 2016 from 7:30 – 9:00 AM at the Clarion Hotel in Portland for an update on Due Diligence and Changes at the Department of Environmental Protection.

After several decades of living with environmental liabilities, most developers and brokers understand the road map through environmental issues, and the value of an environmental site assessment.

BUT — completing All Appropriate Inquiry, obtaining liability protections – AND getting the deal done in a timely and cost effective manner?  Is it possible?   It can be done, but only if you know the path forward, avoid the pitfalls, and execute the plan appropriately.  Come learn from the mistakes of others, so your transaction goes smoothly.

This breakfast seminar will focus on practical problem-solving strategies to keep deals on track and resolve environmental issues.  And the DEP VRAP is here to help. Really.

Whether you are:  buying, selling, or leasing property,  a potential owner, or potential lessee, a lender or bank,  a developer or municipal or county planner, or an environmental professional or brownfields specialist, you will not want to miss this breakfast briefing.

About our presenters:

Ken Gray environmental and products regulation attorney at Pierce Atwood LLP will be providing a review and update on Environmental Pre-Purchase “All Appropriate Inquiry,” recent legal developments, the EPA Tenant Liability Guidance, and recent Maine Voluntary Response Action Program issues.  Practicing law since 1979, Ken has worked at the U.S. Environmental Protection Agency and in private practice beginning in 1986.

Leslie Anderson is the Maine DEP Bureau Director for Remediation and Waste Management, and manages the state’s cleanup and VRAP programs.  She will describe recent changes in staffing, the VRAP program, and how the DEP is more efficiently handling contaminated property issues.  A lawyer by training, and former Director of Risk and Corporate Counsel, Leslie has varied experience in both the private and public sectors.

About the Event:

MEREDA’s Morning Menu Breakfast Event – Environmental Update:  The Latest from the Trenches in Due Diligence and Changes at the Department of Environmental Protection

7:30 – 9:00 AM

Clarion Hotel
1230 Congress Street
Portland, ME

Buffet Breakfast:  7:30 – 8:00 AM

Program:  8:00 – 9:00 AM

Registering for this Event:

Member: $45pp | Non-Member: $55pp
Prices increase by $10 after June 1st

Your RSVP is requested by June 1, 2016. Payment is expected at the time of registration. No refunds will be granted to anyone who registers, but fails to attend or who cancels after June 1st.

Visit www.mereda.org for more information and to register.

This MEREDA “Morning Menu” Breakfast Event is Sponsored by Norway Savings Bank.

 

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