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February 22, 2016

Historic factory will get $6M conversion to apartments

Images courtesy CBRE | The Boulos Company
Images courtesy CBRE | The Boulos Company
The planned redevelopment of the former home of Schlotterbeck & Foss Co. located at 117-119 Preble St. in Portland.
Images courtesy CBRE | The Boulos Company
The former home of Schlotterbeck & Foss Co. located at 117-119 Preble St. in Portland.

PORTLAND — The former home of Schlotterbeck & Foss Co. is getting new life, thanks to a developer who successfully applied to have it listed on the National Register of Historic Places and is now able to take advantage of tax credits to fully invest in the building's rehabilitation.

The building, at 117-119 Preble St., dates to 1927 and was designed by noted architect John Calvin Stevens. The 37,257-square-foot, five-story commercial structure sits on just over an acre. Schlotterbeck & Foss has moved to modern quarters elsewhere in Portland, opening up the space for development as an apartment building.

J.B. Brown & Sons, Portland-based real estate holding company (and owner of the building that houses Mainebiz), sold the property to Schlotterbeck and Foss LLC for $3.25 million, at a slight discount from the $3.35 million asking price, in a deal that closed Jan. 22. Representing the seller was Drew Sigfridson. Joe Porta represented the buyer. Both brokers are with CBRE | The Boulos Co.

Schlotterbeck and Foss LLC, which is unrelated to the sauce-and-condiment manufacturer, is a group of investors that includes John Anton, a Portland-based community development and housing consultant, and Tom Watson, co-owner of Port Property Management, downtown Portland's largest landlord for multi-family apartments.

Schlotterbeck & Foss, which leased the building from J.B. Brown under a contract that expired Dec. 31, 2015, is New England's oldest food-service manufacturer of condiments, sauces, dressings, salsas and ice-cream-topping ingredients, according to the company's website. It was founded by Augustus G. Schlotterbeck and Charles S. Foss in 1866.

"That was the original purpose of the building, to manufacture Schlotterbeck & Foss products," said Porta. "They had a different function on each floor, with a freight elevator that brought the product from floor to floor." The company moved to a modern manufacturing facility at 3 Ledgeview Drive in Westbrook.

With the company's exit, the investment group is now redeveloping the property into a mix of 56 one-bedroom and studio apartments.

The project takes advantage of the Federal Historic Preservation Tax Incentives program, administered by the National Park Service and the Internal Revenue Service in partnership with State Historic Preservation offices. The program makes available a 20% income tax credit for the rehabilitation of historic, income-producing buildings that are determined to be certified historic structures.

"That allows you to invest more money in a building that otherwise would not make financial sense to renovate and restore," said Porta.

The group expects to invest roughly $6 million in the renovation, Porta said.

"A lot of the building was already wide open," he said. "Every system's replacement will be engineered for its new use, and the building will be completely repurposed."

Located just outside Portland's downtown area and near neighborhood-friendly amenities such as a Trader Joe's, Bayside Bowl, and the brand-new Century Plaza, one of the building's best features is its 12- to 13-foot-high ceilings and large windows, Porta said. The majority of the building's interior doesn't have much in the way of historic architectural elements to highlight: Built specifically for manufacturing, it's got concrete floors and ceilings on every story but the first. But that gives the group a free hand in the rehabilitation.

"These units will be brand-new with beautiful finishes and a lot of built-in features," Porta said. "They're smaller units, but they'll be very nice."

The brick building will be fitted with solar panels on the roof and natural gas-fired mini-split heat pumps in each apartment. An existing parking lot has 38 spaces.

The first floor has about 1,800 feet of original millwork that must remain for five years, which is where Schlotterbeck & Foss had their offices. That will be preserved, but the use of that space is yet to be determined: There's some thought of turning it into artist studios or office space.

The transformation into one-bedroom apartments, expected to rent at $1,300 per month, comes at a great time for Portland, where affordable, nice apartments are in short supply, said Porta. Rehabilitation is underway right now, with an expected completion date of September. Leasing of the apartments will begin this summer, he said.

The deal includes a second property, adjacent to the old Schlotterbeck & Foss site.

A 5,759-square-foot, one-story office-and-warehouse building has an address of 195 Lancaster St. Together, the buildings total 43,016 square feet and take up an entire city block bordered by Preble, Elm, Lancaster and Kennebec streets. The structure at 195 Lancaster St. dates to 1928 but is not listed on the national register. Its tenant is Big Brothers Big Sisters of Southern Maine, whose lease expires at the end of February 2018. A second tenant, the GRS Group, an equipment rental and leasing company doing business as Beau Tech, is also in the building as a tenant at will.

There are no immediate plans for the second building, Porta said.

Editor's Note

Beginning today, Feb. 23, we will be handing off management of Mainebiz Real Estate Insider from the feature's original contributor, Diane Norton, to Laurie Schreiber, a Bass Harbor-based correspondent. You may have worked with Laurie already on articles, or noticed her byline on numerous Mainebiz stories, including in The RE Insider. Laurie will become your contact for content, including both real estate transactions and real estate news stories.

Laurie can be reached at laurie@profilesmaine.com or 244-9614.

Read more

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Scarborough developer plans 54-unit apartment complex

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