Belfast study shows downtown is primed to build out, but challenges remain
COURTESY / BELFAST AREA CHAMBER OF COMMERCE
The city of Belfast topped this year's Top 10 list of Maine communities with the hottest home sales.
A market study released Tuesday suggests downtown Belfast is ripe for real estate development, but faces tough challenges in harvesting that potential.
The Brownfields Revitalization Study, contracted by the city to a New York research firm, looks at opportunities and obstacles for revitalization in Belfast’s 77-acre downtown and waterfront area. The analysis examines potential development in housing, retail, lodging and light industrial or flex space.
One of the key findings: Nearly all —97% — of the existing downtown and waterfront properties can accommodate additional space under current zoning regulations. If built out to capacity, the properties would increase space in Belfast by 2.4 million square feet.
Downtown commercial expansion would account for 1.9 million square feet, or 80%, of that new space. There’s also room for more mixed-use space on the waterfront, totaling about 12% of the total.
Residential space could expand by 8% under current zoning, reported the research firm, Camoin Associates, of Saratoga Springs, N.Y. The study also found there’s enough demand in downtown Belfast to absorb 150 units of multifamily housing over the next five years.
In fact, the report noted, 80% all jobs in Belfast are filled by workers commuting from outside the city.
The seat of Waldo County, Belfast encompasses 38 square miles and has a population of about 6,700. Belfast is currently the potential site of a proposed 40-acre salmon farm, and a 142-acre call center complex in the city may soon become a new site for Penobscot Community Health Care. Neither business is downtown.
Despite the room for building out, development in Belfast is “extremely challenging” due to a variety of factors, Camoin wrote in the report. They include high property tax rates, market rates that don’t support the cost of construction, and speculative land pricing.
“From a return on investment perspective, the combination of high construction costs and low lease rates pose a significant challenge to the development of new office, multifamily residential (‘multifamily’), restaurant, retail, or single-family residential (single-family) construction and/or renovation projects in Belfast,” the report said. “All development scenarios were found to be financially infeasible.”
However, that conclusion does not factor in the use of subsidies or incentives, such as tax increment financing, that could potentially make development more feasible.
City officials expressed optimism after reviewing the study findings.
“This kind of market analysis can help the private sector in legwork from this study to conceptualize next steps and come up with the cultural guidance,” Belfast City Councilor Neal Harkness said in a news release. “The study shows that there are multiple types of opportunities for investment.”
Another councilor, Paul Dean, said, “The economic demand is there, Belfast just needs workforce housing. Belfast is importing people, which is a great sign.”
Mayor Eric Sanders added, “Belfast is a unique place that has coastal downtown accessible, walkable, real experiences with opportunities for retail development, which gives a lot of promise for sound economic investment.”
The study also predicted that future market demand for industrial and flex space will be driven by businesses such as small-scale and micro-producers, beverage manufacturing and specialty foods manufacturing.
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How big does Belfast want to get? If all development scenarios are unfeasible maybe it doesn't matter. Maybe we are big enough already? What does growth in the age of global warming even look like? Maybe having land and an attractive place on the planet is no longer enough; growth has to be intelligent and responsible to the rest of the planet or we shouldn't do it?
Missing from this article is the fact that The entire city of Belfast is ALREADY classified as an “Opportunity Zone” with significant IRS/tax advantages to investors and developers.
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