January 9, 2006
Setting the anchor | State cleanup of an oil leak has a mill redevelopment in Winthrop back on track
By Jeffrey Bouley
It certainly wasn't good news for residents along the shores of Annabessacook Lake when a layer of thick No. 6 boiler oil was spotted on the water in April 2005. Then evidence mounted that the oil was coming from Mill Stream, and in August the Maine Department of Environmental Protection pointed to the former Carleton Woolen Mill in Winthrop, a building that straddles the stream, as the source.
That's when the environmental bad news became bad business news for owners of the Winthrop Commerce Center, the new name for the former mill, which is currently under redevelopment. Industrial strength boiler oil isn't something you expect ˆ or want ˆ to be leaking from your mixed-use office and retail facility, particularly when you are preparing to welcome your first tenant to the building. With the commerce center situated on Main Street in Winthrop, right in the downtown area and thus a key part of town redevelopment efforts, town leaders were feeling uneasy as well. So, it was with no small sigh of collective relief when in September, DEP agreed to pick up the tab on the cleanup, and the commerce center owners realized that the leak was localized to a part of the facility that hadn't been renovated in any major way yet.
DEP's decision to cover the cost of the cleanup was welcome news for the town, says Winthrop Town Manager Cornell Knight, because the mill had once before been a source of development trouble. Just as Winthrop began to gain momentum in 2001 and 2002 on improving downtown streets, sidewalks and buildings, he says, the Carleton Woolen Mill shut its doors in 2002 ˆ echoing mill closings that have been a source of economic pain for towns throughout central Maine for some years now. "When the mill closed, that certainly left a significant hole in downtown even though the building was still there physically," Knight says. "The mill's new role as the Winthrop Commerce Center is a key piece of our downtown redevelopment plans."
Those redevelopment plans also echo the challenge faced by towns across central Maine: How to find a new, primary industry to replace lost manufacturing businesses. For towns like Winthrop, one potential growth strategy looks to Augusta ˆ and the business of state government ˆ as a new source of activity. By developing commercial space suitable for satellite offices of state departments or agencies, towns hope to bring professional workers downtown that will in turn attract new retail, service or professional businesses such as lawyers and health care facilities to cater to them.
At the Winthrop Commerce Center, the process may be happening in reverse. Last May, MaineGeneral Health signed a 10-year lease under which the health care provider will operate three businesses in 20,000 sq. ft. of the mill: Winthrop Health Center, a pediatrics practice and a diagnostics and imaging lab. But Louis Carrier, a lifelong Winthrop resident who leads the group of investors that purchased the mill, says the health care provider is the kind of substantial anchor tenant needed to help finance the further renovation of the space. "When you need to put in infrastructure like a couple elevators, parking and everything else, that costs a couple million dollars at least, and without knowing that you have a major tenant locked in, you just don't have the cash to do those things, so you cannot bring in any tenants," Carrier says. "But we were patient and waited until we got our anchor, and now can lease to any size business, small or large."
John Butera, executive director of the Central Maine Growth Council, isn't intimately familiar with Winthrop's situation, but looking at the region in general, he thinks the town is on the right track.
"I think fundamentally what you see more so in this region than in other areas is a sharper transition economically," Butera says. "As we all know, the manufacturing sector continues to decline, while the health care and service sectors continue to grow."
The road to renovation
The oil leak hasn't been the only challenge to the commerce center and to Winthrop's goals to make the town more attractive to business. Developers of the mill building had actually secured the property in February 2003, but only recently signed MaineGeneral as their first tenant. Although there had been plenty of eagerness, particularly among town leaders, for tenants to be landed sooner, Carrier says the delay was an almost unavoidable part of doing business of this type.
Carrier says MaineGeneral had been a top candidate to occupy space at the commerce center for some time. But because of multiple layers of management and other considerations, negotiations took nearly two years before ink was touched to paper on a final deal. He says he and his partners actually turned down several prospective tenants over the past couple years, but found plenty of work to do in the meantime with minor repairs and discarding old equipment left over at the mill.
Ken Lajoie of Lajoie Brothers Inc. in Augusta, another partner in the commerce center venture and also general contractor for the commerce center site work, estimates that the initial phases of work on the building, including general infrastructure and fit-ups for MaineGeneral's subsidiaries, will run in the neighborhood of $4 million. The pediatric facility is set to move in June 2006, with the other two operations following in August.
Lajoie also notes that the state government recently sent out a request for bids on a deal seeking 60,000 sq. ft. of office space for the Department of Health and Human Services, and has been looking in the vicinities of Augusta, Winthrop and Gardiner. Landing a deal like that would fill up most of the commerce center's 200,000 sq. ft., he notes. And although Carrier says he's not sure whether he and his partners will submit a proposal for that particular RFP, they plan to pursue other government tenants now that they've locked in MaineGeneral as the mill's anchor.
Carrier agrees that opportunities to lease to state government for satellite offices and other needs is an attractive option, and he says that pursuing such business is important for any town in the region. "Towns always want to diversify their economy so their eggs are not all in one basket, and there is no getting around that state government is important to us," Knight adds. "The state employs many, many residents of Winthrop. We are a bedroom community of Augusta, and do provide services to the region, just not on the scale that the state recognizes us as a service center."
Actually bringing government into town, though, could mean even more state jobs for residents, which are attractive, Knight says, because state government jobs pay well. Also, with additional state workers from other communities spending time in town during the day, it is more likely that the town's service businesses ˆ such as various banks, insurance agencies, retail stores and restaurants ˆ can prosper, or new ones could start up.
Regardless of whether any government offices open in the Winthrop Commerce Center, other types of businesses likely to occupy the space in the future would be law firms, physicians' offices and other professional offices; retail stores; a possible restaurant and potentially a childcare operation. Carrier also says he would like to have a museum on site dedicated to the history of Carleton Woolen Mills.
"We're just delighted the project is moving forward and construction workers are there every day and that next summer should be in full swing," Knight says. "We're glad that's its no longer just a huge, vacant building."
Sidewalks and streetlights
The mill isn't the whole story of Winthrop, of course. Knight says the town of 6,400 has a decent mix of downtown businesses ˆ mostly small retail stores, a couple restaurants and FairPoint New England, a telecommunications provider that is currently the town's largest employer ˆ but he wouldn't mind seeing more businesses fill a few vacant storefronts.
Although he doesn't know the current square footage of available downtown space aside from the commerce center, he estimates that 10% to 15% of properties are vacant. Also, the U.S. Postal Service leveled a property in the center of town that will eventually house a new post office ˆ leaving another vacant building that Knight thinks would be well-suited for retail use.
But the driver for more businesses coming downtown in the short run is probably the same driver that is fueling progress at the commerce center: MaineGeneral. "When the health center opens, that will bring between 80 to 100 people to town every weekday," Knight says. "Not to mention what will happen if other companies with employees from outside Winthrop move into the commerce center. As you bring more people to the village district, the more businesses that will need to open to cater to the needs of those people."
George W. Ames, a consulting engineer with Ames, Hewett & Gifford in Winthrop, agrees. His company is doing electrical work at the commerce center site and he believes, having lived in the town for 30 years, that the commerce center is, if not the whole answer to the town's needs, at least a very large step in the right direction. "Once that building is occupied, it will bring so much more vitality to the downtown area," he says.
The town also has been doing its part to spruce up the area and make it more attractive to new business for a few years now. Even before Carleton Woolen Mills shuttered its operation, Winthrop had received grant money through Maine's Department of Transportation, much of it federal funds, to do a sidewalk project and to renovate some streets adjacent to downtown. The town footed approximately a third of the cost of those two projects, while the grant money covered the rest.
The sidewalk project, Knight says, ran a total of about $240,000 and the street project was approximately $150,000. Less costly projects like lighting improvements and repairs to older properties have also been ongoing for several years, and Knight says about $600,000 in grant money has found its way to the town in recent years.
With those improvements in place, economic developers now see the town in a better position to capitalize on statewide economic trends that could attract businesses to central Maine. One such factor: the rising costs of living and doing business in southern Maine.
"You just look at traditional growth patterns and they follow transportation networks. It comes right up 95," says Butera of the Central Maine Growth Council. "So we're reaping the benefits of a lot of southern Maine's success and the challenges that come with their success."
Still, Butera and others admit the piecemeal filling of old mill space will take years before it can match the economic impact of the long-gone manufacturing tenants. The days of attracting 500-person manufacturing facilities are over, Butera suspects, and what few opportunities still exist in manufacturing are unlikely to be enough to meet the employment and property tax needs of every community in central Maine.
Though Butera says residents can maintain "a glimmer of hope" for a deal that brings new manufacturing tenants to towns like Winthrop, he cautions that people must accept that the economy is simply not the same as it was 30 years ago. Instead, residents will have to watch what developers can do with facilities like the Winthrop Commerce Center project, especially now that its environmental hazards are being cleaned up and an anchor tenant is in place. "People who are eager for change need to have patience," says Butera. "The problems we have in central Maine didn't all happen overnight; they won't get fixed overnight either."
That's when the environmental bad news became bad business news for owners of the Winthrop Commerce Center, the new name for the former mill, which is currently under redevelopment. Industrial strength boiler oil isn't something you expect ˆ or want ˆ to be leaking from your mixed-use office and retail facility, particularly when you are preparing to welcome your first tenant to the building. With the commerce center situated on Main Street in Winthrop, right in the downtown area and thus a key part of town redevelopment efforts, town leaders were feeling uneasy as well. So, it was with no small sigh of collective relief when in September, DEP agreed to pick up the tab on the cleanup, and the commerce center owners realized that the leak was localized to a part of the facility that hadn't been renovated in any major way yet.
DEP's decision to cover the cost of the cleanup was welcome news for the town, says Winthrop Town Manager Cornell Knight, because the mill had once before been a source of development trouble. Just as Winthrop began to gain momentum in 2001 and 2002 on improving downtown streets, sidewalks and buildings, he says, the Carleton Woolen Mill shut its doors in 2002 ˆ echoing mill closings that have been a source of economic pain for towns throughout central Maine for some years now. "When the mill closed, that certainly left a significant hole in downtown even though the building was still there physically," Knight says. "The mill's new role as the Winthrop Commerce Center is a key piece of our downtown redevelopment plans."
Those redevelopment plans also echo the challenge faced by towns across central Maine: How to find a new, primary industry to replace lost manufacturing businesses. For towns like Winthrop, one potential growth strategy looks to Augusta ˆ and the business of state government ˆ as a new source of activity. By developing commercial space suitable for satellite offices of state departments or agencies, towns hope to bring professional workers downtown that will in turn attract new retail, service or professional businesses such as lawyers and health care facilities to cater to them.
At the Winthrop Commerce Center, the process may be happening in reverse. Last May, MaineGeneral Health signed a 10-year lease under which the health care provider will operate three businesses in 20,000 sq. ft. of the mill: Winthrop Health Center, a pediatrics practice and a diagnostics and imaging lab. But Louis Carrier, a lifelong Winthrop resident who leads the group of investors that purchased the mill, says the health care provider is the kind of substantial anchor tenant needed to help finance the further renovation of the space. "When you need to put in infrastructure like a couple elevators, parking and everything else, that costs a couple million dollars at least, and without knowing that you have a major tenant locked in, you just don't have the cash to do those things, so you cannot bring in any tenants," Carrier says. "But we were patient and waited until we got our anchor, and now can lease to any size business, small or large."
John Butera, executive director of the Central Maine Growth Council, isn't intimately familiar with Winthrop's situation, but looking at the region in general, he thinks the town is on the right track.
"I think fundamentally what you see more so in this region than in other areas is a sharper transition economically," Butera says. "As we all know, the manufacturing sector continues to decline, while the health care and service sectors continue to grow."
The road to renovation
The oil leak hasn't been the only challenge to the commerce center and to Winthrop's goals to make the town more attractive to business. Developers of the mill building had actually secured the property in February 2003, but only recently signed MaineGeneral as their first tenant. Although there had been plenty of eagerness, particularly among town leaders, for tenants to be landed sooner, Carrier says the delay was an almost unavoidable part of doing business of this type.
Carrier says MaineGeneral had been a top candidate to occupy space at the commerce center for some time. But because of multiple layers of management and other considerations, negotiations took nearly two years before ink was touched to paper on a final deal. He says he and his partners actually turned down several prospective tenants over the past couple years, but found plenty of work to do in the meantime with minor repairs and discarding old equipment left over at the mill.
Ken Lajoie of Lajoie Brothers Inc. in Augusta, another partner in the commerce center venture and also general contractor for the commerce center site work, estimates that the initial phases of work on the building, including general infrastructure and fit-ups for MaineGeneral's subsidiaries, will run in the neighborhood of $4 million. The pediatric facility is set to move in June 2006, with the other two operations following in August.
Lajoie also notes that the state government recently sent out a request for bids on a deal seeking 60,000 sq. ft. of office space for the Department of Health and Human Services, and has been looking in the vicinities of Augusta, Winthrop and Gardiner. Landing a deal like that would fill up most of the commerce center's 200,000 sq. ft., he notes. And although Carrier says he's not sure whether he and his partners will submit a proposal for that particular RFP, they plan to pursue other government tenants now that they've locked in MaineGeneral as the mill's anchor.
Carrier agrees that opportunities to lease to state government for satellite offices and other needs is an attractive option, and he says that pursuing such business is important for any town in the region. "Towns always want to diversify their economy so their eggs are not all in one basket, and there is no getting around that state government is important to us," Knight adds. "The state employs many, many residents of Winthrop. We are a bedroom community of Augusta, and do provide services to the region, just not on the scale that the state recognizes us as a service center."
Actually bringing government into town, though, could mean even more state jobs for residents, which are attractive, Knight says, because state government jobs pay well. Also, with additional state workers from other communities spending time in town during the day, it is more likely that the town's service businesses ˆ such as various banks, insurance agencies, retail stores and restaurants ˆ can prosper, or new ones could start up.
Regardless of whether any government offices open in the Winthrop Commerce Center, other types of businesses likely to occupy the space in the future would be law firms, physicians' offices and other professional offices; retail stores; a possible restaurant and potentially a childcare operation. Carrier also says he would like to have a museum on site dedicated to the history of Carleton Woolen Mills.
"We're just delighted the project is moving forward and construction workers are there every day and that next summer should be in full swing," Knight says. "We're glad that's its no longer just a huge, vacant building."
Sidewalks and streetlights
The mill isn't the whole story of Winthrop, of course. Knight says the town of 6,400 has a decent mix of downtown businesses ˆ mostly small retail stores, a couple restaurants and FairPoint New England, a telecommunications provider that is currently the town's largest employer ˆ but he wouldn't mind seeing more businesses fill a few vacant storefronts.
Although he doesn't know the current square footage of available downtown space aside from the commerce center, he estimates that 10% to 15% of properties are vacant. Also, the U.S. Postal Service leveled a property in the center of town that will eventually house a new post office ˆ leaving another vacant building that Knight thinks would be well-suited for retail use.
But the driver for more businesses coming downtown in the short run is probably the same driver that is fueling progress at the commerce center: MaineGeneral. "When the health center opens, that will bring between 80 to 100 people to town every weekday," Knight says. "Not to mention what will happen if other companies with employees from outside Winthrop move into the commerce center. As you bring more people to the village district, the more businesses that will need to open to cater to the needs of those people."
George W. Ames, a consulting engineer with Ames, Hewett & Gifford in Winthrop, agrees. His company is doing electrical work at the commerce center site and he believes, having lived in the town for 30 years, that the commerce center is, if not the whole answer to the town's needs, at least a very large step in the right direction. "Once that building is occupied, it will bring so much more vitality to the downtown area," he says.
The town also has been doing its part to spruce up the area and make it more attractive to new business for a few years now. Even before Carleton Woolen Mills shuttered its operation, Winthrop had received grant money through Maine's Department of Transportation, much of it federal funds, to do a sidewalk project and to renovate some streets adjacent to downtown. The town footed approximately a third of the cost of those two projects, while the grant money covered the rest.
The sidewalk project, Knight says, ran a total of about $240,000 and the street project was approximately $150,000. Less costly projects like lighting improvements and repairs to older properties have also been ongoing for several years, and Knight says about $600,000 in grant money has found its way to the town in recent years.
With those improvements in place, economic developers now see the town in a better position to capitalize on statewide economic trends that could attract businesses to central Maine. One such factor: the rising costs of living and doing business in southern Maine.
"You just look at traditional growth patterns and they follow transportation networks. It comes right up 95," says Butera of the Central Maine Growth Council. "So we're reaping the benefits of a lot of southern Maine's success and the challenges that come with their success."
Still, Butera and others admit the piecemeal filling of old mill space will take years before it can match the economic impact of the long-gone manufacturing tenants. The days of attracting 500-person manufacturing facilities are over, Butera suspects, and what few opportunities still exist in manufacturing are unlikely to be enough to meet the employment and property tax needs of every community in central Maine.
Though Butera says residents can maintain "a glimmer of hope" for a deal that brings new manufacturing tenants to towns like Winthrop, he cautions that people must accept that the economy is simply not the same as it was 30 years ago. Instead, residents will have to watch what developers can do with facilities like the Winthrop Commerce Center project, especially now that its environmental hazards are being cleaned up and an anchor tenant is in place. "People who are eager for change need to have patience," says Butera. "The problems we have in central Maine didn't all happen overnight; they won't get fixed overnight either."
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