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Photo / Maureen Milliken
82 Hanover St. is 100% leased a year after the city sold it to 82 Hanover St. LLC, and tenants along the Lancaster Court side include The Whiskey Barrel, which will sooon be joined by a Banded Brewing tasting room, in the space at the right.
Biddeford craft beer brewery Banded Brewing is opening a tasting room at 82 Hanover St. in Portland, the latest tenant in a former city Public Works Department space that by this time next year could be a hip eating and drinking hub.
The addition of the tasting room means the 42,000-square-foot building in West Bayside is 100% leased, a little more than a year after 82 Hanover St. LLC, a group that includes Port Properties owner Tom Watson, bought it from the city. It was one of six former Public Works properties on a four-acre swath the city sold to five developers in 2017 and 2018.
The fact the building filled up so fast was stunning, said broker Anthony Struzziero, of Porta & Co., who represents the owner. Original projections were for two years, and some people thought that was optimistic for the site, he said.
"It truly is a case of build it, and they will come," he said Tuesday. The building was largely used for storage, including of large vehicles, by the city's Public Works Department.
"It's really cool to be part of it," he added. "It seems like yesterday when we were touring it, and there was a fire truck over there, and a pile of tires over there and birds flying around. It's really amazing to see it now."
Banded Brewing, owned by Ian McConnell, plans to open in 2,525 square feet at the corner of Hanover and Lancaster Court, one of three eating and drinking establishments that will line the Lancaster Court side of the building, which has a cobblestone patio running the length of the building and fronts a city-owned pedestrian walkway.
Also on that side of the building is The Whiskey Barrel, which opened in late spring, and Wilson County Barbecue, which is under construction. The restaurant is a collaboration between the owners of the Ri Ra Irish Pub and Watson, of 82 Hanover St. LLC.
Around the other side of the building, on the Parris-Kennebec streets corner, Kennebunk's Batson River Distillery plans to open the Batson River Social Club, a 8,154-square-foot space in the spring.
The building also includes Cyclebar and Fortune Teller Tattoo, and, at the Hanover Street two-story end of the building, Rist-Frost-Shumway Engineering, Knickerbocker Group interior design, Exterus Business Furniture and the offices of Port Property.
Watson's group bought the 42,000-square-foot warehouse in October 2017 for $2.4 million. He also bought 44 Hanover St., which is now 52 Hanover St., a 8,425-square-foot former city vehicle maintenance garage across Lancaster Court, for $1.25 million late last year.
He told Mainebiz in May that investment in 82 Hanover will be close to $8 million, including the purchase price.
The former warehouse is one of six parcels on four acres along Kennebec, Parris, Portland and Hanover streets that housed Public Works before it moved to Canco Road two years ago. City officials said they envisioned local developers with a variety of uses, rather than one big development.
Struzziero said that Watson's vision was to have destination establishments, as well as the mix of office and other uses.
The emerging West Bayside neighborhood is considered a challenge for brokers and developers — while there's been some new development, it's been a largely industrial area.
At a May forum about the neighborhood, Ali Malone, a broker with Portside Real Estate Group, said when they first started marketing Parris Terraces, apartments built on another of the Public Works sites, the biggest hurdle was the neighborhood.
People would ask more about the neighborhood than the project, she said, and "trying to explain the context" was "a real challenge."
"We were showing renderings of other people's projects as much as our own," she said.
Struzziero this week that those who've leased space in 82 Hanover were impressed by the development of the space, lower rents than other areas of the peninsula and the idea of what the neighborhood can become.
The owners of the Whiskey Barrel, a 52-seat bar with live country music, "Were the first ones to walk in and say, 'I can see it, I want to be here,'" Struzziero said.
Justin Lamontagne, of NAI The Dunham Group, represented Banded Brewing, and said the original plan was to do a broad search for a small tasting room/brewery in the Portland market.
"We looked at a full inventory of options including near Industrial Way, East and West Bayside and some creative, off-market ideas around town," he said. The space at 82 Hanover quickly rose to the top of owner McConnell's list.
"We actually only toured it once," Lamontagne said. "On a per square foot basis, it was more expensive than others. But the location, neighboring businesses and mix of commercial and residential made it a relatively easy decision for Ian and his team."
While there are similarities with the food and drink tenants, Struzziero said they complement each other, and it's an industry where similar businesses are a draw.
He's also noticed something about the craft beer industry in Maine. "Brewers are interesting," he said. "They don't mind being near each other."
He said that sense of camaraderie goes beyond other businesses he's seen. "It's a common theme," he said. "Maybe it's because Maine's a small state, and they all know each other. They don't seem concerned about competition."
The patio area on the recently developed pedestrian walkway, Lancaster Court, was a draw for the tenants, he said.
Possible retail development of 52 Hanover across the walkway by Watson's group may include complementary businesses, but Struzziero said plans are still forming for what will happen with that property, and development may be up what tenant is signed.
He said that there's "great chemistry" among all the tenants in the building, even this early in the development process of most of the businesses.
Lamontagne said the renovation of the Public Works Dept. property presents a dilemma for brokers and developers — it meets a need for new retail space in emerging parts of the city, but is another element in the struggle to find industrial inventory.
He said he gives the city a lot of credit for turning the former Public Works Dept. land and buildings "into something the whole community can use."
"These buildings are classic mixed-use properties," he said. "From a consumer standpoint, it’s exciting to see new bars, breweries, restaurants and cool office space in this part of town. Parking is also looser than in downtown."
"The conversion of older, functionally obsolescent industrial buildings into service/retail space is a hugely common trend in urban centers," Lamontagne said. "It’s comparable to the redevelopment of older mills we’ve seen proven so successful all over Maine. However, as an industrial broker, this also creates more pressure on traditional industrial businesses.
With industrial inventory critically low, "we need to be very careful about balancing the demand for 'cool retail' space with the basic needs of manufacturing, warehousing and distribution," he said.
All of the city's Public Works properties on the four acres have been developed, or are being developed, for non-industrial uses.
They are:
60 Parris St. Jack Soley bought the 0.23-acre parcel for $175,000 and the 23-unit condominium building opened in May.
65 Hanover St. Rob Barrett, who owns design and build firm Barrett Made, paid $1 million for the 13,009-square-foot building. Now called "The Public Works," and with a new address, 53 Alder St., it includes co-working, event space, and a makers space. A planned second phase is market-rate apartments in what's now the building's 14,000-square-foot parking lot.
178 Kennebec St. Szanton Co. and Ross Furman broke ground on a 51-unit mixed-income apartment building in September.
55 Portland St. The former Public Works Department office building was bought by developer Ford Reiche for $1.4 million.
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