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WATERVILLE — When MaineGeneral Health was preparing to consolidate hospitals in anticipation of opening its new Augusta medical center six years ago, it offered its former building on East Chestnut Street in Augusta and the former Seton Hospital in Waterville to developers.
When the two buildings went up for auction in October 2012, with a minimum bid of $1.7 to $2 million each and a suggestion they could go as a package deal, there were no takers.
One developer who was intrigued, but not willing to take the plunge, was Kevin Mattson, of Dirigo Capital Advisors.
“All projects have some kernel of appeal,” Mattson said last week. But the buildings were big, and he’d already had experience developing big buildings in Augusta with the former 300,000-square-foot Digital building, which became the Central Maine Commerce Center.
“You’re up all night, you have bills on big buildings, and they’re big bills,” he said. “I didn’t want to have an empty building — you have to have some cash flow.”
On top of it, MaineGeneral wouldn't sell to anyone who planned to use the buildings for a competing health care operation.
So, the seven-story, 317,000-square-foot former hospital in Augusta wasn’t something Mattson was interested in. Nor was he interested in the 143,000-square-foot former hospital in Waterville. And he definitely wasn't interested in both as a package deal.
Flash forward to 2018, though, and Mattson has already renovated one of the buildings and is getting his project for the other one underway.
Mattson bought the former Augusta hospital for $2.5 million in early 2013 after no one bit at MaineGeneral’s auction. He and the Augusta-based health care system agreed that he would lease back 70,000 square feet to MaineGeneral while its new hospital, which opened in November 2014, was built. It's now the Ballard Center, with a variety of business tenants.
Later in 2013, Mattson’s group, as Waterville Redevelopment LLC, bought the former Seton property at 30 Chase Ave. for $500,000.
He’s poised to begin a $16 million redevelopment for mixed residential and commercial use after several years of planning.
The former Seton Hospital has been empty since MaineGeneral moved its final functions out in 2014.
The Waterville Planning Board last month approved a new site plan that ups the number of residential units to 68 one and two-bedroom apartments from 55, and allows Mattson to split the property into two ownership entities. The amount of office space was reduced under the new plan.
The federal Housing and Urban Development-funded residential part will be in the six-story main building.
The non-HUD commercial part includes about 18,000 square feet of office space and 36,000 square feet of warehouse space in the one-story tail behind the main building.
When Mattson first bought the property, which at the time also included some other buildings on the 36-acre site, he told the Morning Sentinel in Waterville that he wasn’t sure how it could be redeveloped, and it was likely the former hospital would be torn down.
In 2013, he said that the way the hospital was built made it difficult to renovate. The ceilings are low, the hallways wide. There’s no central air conditioning.
“So what do you do with a former hospital?” Mattson said recently.
The 55-year-old brick and concrete building on the northern edge of Waterville may not look like a historic treasure, but in 2016, it was named to the National Register of Historic Places.
According to the application by Sutherland Conservation and Consulting, of Augusta, the building is a rare Maine commercial example of the Miesian school of Modernist architecture.
The building, which was completed in 1965, was designed by architect James Ritchie, of Boston, a protege of architect Ludwig Mies van der Rohe, who came to the United States as an exile from Nazi Germany in 1937.
The International style of architecture, and the Modernist style that developed from it, were rejected by the Nazi party, and architects, including Mies van der Rohe came to the U.S. to continue their work.
“Later Modernism and its variants were in widespread use in the United States during the period of construction for Seton Hospital, although its use in Maine was quite limited,” said the Sutherland submission to the National Register, written by Sutherland’s Scott Hanson.
“Compared to all the other large Maine hospital buildings and additions of the period, Seton Hospital is by far the most architecturally distinguished,” the submission said.
The style’s intention is to “reflect the industrialized age in which it was built,” and it includes lots of horizontal and vertical lines, steel and concrete, and displays, rather than hides, structural elements.
As the style evolved, it became popular with institutions like hospitals, with a focus more on function than the aesthetics of the building.
The building’s Modernist elements include its flat roof, curtain walls, minimal ornamentation and framing system. Notable features are the concrete canopy over its front door, much of the woodwork and cabinetry, the wall tile and the landscaped courtyard in front of the entrance.
People don’t think of modern buildings in connection to the National Register, said Michael Goebel-Bain, Maine’s National Register and Survey coordinator.
He said that a building less than 50 years old has to be “an exceptional example of architecture or to be associated with exceptional historic events.”
“Older buildings have to meet National Register criteria and integrity requirements, but exceptionality is no longer required,” he told Mainebiz.
A similar Modernist building in the area that was also designated was Ella R. Hodgkins School in Augusta, built in 1958, which was listed in 2015 and developed as senior housing by Designers Collaborative of Portland.
Development isn’t restricted for buildings and districts that are listed, but being listed makes buildings eligible for Historic Preservation Tax Credits, a federal program that allows developers to claim 20% of their eligible improvements against their federal tax liability.
As Mattson learned more about the hospital’s historic value, he thought, “Maybe we can save this thing, maybe we can redevelop it.”
While the classification makes the building eligible for historic preservation tax credits, it also makes a tricky renovation even trickier.
The tax credit rules are that historic elements must be preserved, including the interior layout and period elements like cabinetry. Modern elements must complement the historic ones, but can’t mimic them to the point of being mistaken for historic.
Windows are a big issue — the original ones aren’t energy efficient and must be replaced, but, though the glazing can be changed, new windows have to be the same style and look the same. Modernist buildings have a lot of windows.
Floor tile in the building has to be removed because of asbestos, so the vintage green squares won’t be staying, but the mid-century green glass tile backsplashes will.
Mattson knows it will be a challenge, but he’s excited about it.
“What do you think it would cost to to build this today?” he asked market analyst Blair Kincer as they toured the building last week.
“A lot more,” Kincer, of Novogradac & Co., a Maryland-based accounting firm, said.
"Way more than what it's costing to renovate it," Mattson said.
Kincer, who lives in western Maine, said he gets to imagine what the building will look like once renovated and recommends rental rates to HUD.
Through the peeling paint, moldy carpet and crumbling plaster, Mattson can imagine the finished product, too.
The wide hallways, for instance, make the building hard to develop into apartments, but attractive to tenants.
The lobby can’t be changed, but will make a nice retro common space for residents.
On an upper floor, through the machinery of the elevator system, is a window-lit space with spectacular views to the east that has the feel of a three-season porch — the former administration offices of the Sisters of Charity, who originally ran the hospital.
The building is on a height of land, and from the roof outside that space, even on a rainy day, the Camden Hills are visible to the east. To the northwest, Colby’s spires rise above the bright foliage of surrounding woods.
Despite the pastoral wooded setting at the edge of a residential neighborhood and a short walk from Colby, the site is also a quick drive to Exit 127 on Interstate 95, but also close to downtown and the stores of Kennedy Memorial Drive.
“And what’s nice is nearly all of the infrastructure is already in place,” Mattson said.
Mattson’s only other Waterville-area development is a 20,000-square-foot MaineGeneral orthopedics building in the First Park development in Oakland, on the Waterville line. Most of his projects are in Augusta, where he’s based, and south of there.
He’s in Waterville at the right time — the development of the former hospital dovetails with Waterville’s downtown renaissance, spearheaded by Colby College’s $50 million investment in buildings and renovations.
The Colby effort has spurred other development, and the city’s need for housing is acute.
Mattson, who’s also developed property on Saco Island in Saco, said, “What you see now in Waterville is what you saw in Saco [a decade ago], there’s just a huge demand for housing.”
Mattson envisions tenants who work at the nearby Thayer Unit of MaineGeneral in the former Thayer Hospital a mile away, and those drawn to Waterville’s growing tech industry, to boomers who are downsizing and “don’t want to live in the 200-year-old farmhouse anymore.”
The site has two large parking lots that open onto Chase Avenue at one end, and First Rangeway, a short straight shot to Kennedy Memorial Drive, at the other.
The surrounding neighborhood is walkable and the large wooded parcel offers possibilities.
The first floor of the building was originally going to be commercial, but that didn’t work with the HUD funding, so Mattson is developing it separately.
Not only will there be office space, but the cavernous area near the building’s distinctive brick tower will be leased for business storage space, of which there’s a shortage.
Now that the historic designation, the rezoning and other planning issues are out of the way, Mattson is poised to start the project. He expects to get moving on it soon, and to complete the project late next year.
“It’s taking some time, but it’s worth it,” he said.