Processing Your Payment

Please do not leave this page until complete. This can take a few moments.

Updated: 6 hours ago

NYC developer plans conversion of Kittery motel into affordable rentals

Exterior view of long low building. Photo / Courtesy Blue Hour Housing Blue Hour Housing acquired a former motel at 2 Gorges Road in Kittery to convert it into “missing middle” rental apartments.
By Laurie Schreiber

In keeping with its mission to develop affordable workforce housing for middle-income earners, a New York City real estate firm is making its first foray into Maine to convert a Kittery motel into 108 units of rental apartments.

BHH Holdings IV LLC bought 2 Gorges Road, a former Ramada Inn, from Kittery Hotels Inc. for an undisclosed sum. 

Robert Doak and Nick Farrell of Farrell & Doak at Keller Williams Realty brokered the deal.

The conversion is aimed at middle-income earners who have been priced out of market-rate housing but don’t qualify for subsidized housing. The segment of the market has been called the “missing middle."

BHH Holdings IV LLC is owned by Blue Hour Housing, which develops and manages workforce housing. The company works with employers to secure long-term leases designed to guarantee reliable workforce housing, invests in and renovates properties to that end and provides property management services.

“When we’re looking for a site, we look for favorable zoning, where local municipalities want to work with us, and for places we can purchase at a price that’s low enough for a conversion that will yield affordable rents,” said Chris Breen, Blue Hour Housing’s CEO.

Former motel

The Kittery property includes the former motel, a parking area, and a two-story wooden outbuilding on 4.85 acres.

The plan is to convert existing room into efficiency apartments focused on housing the local workforce, with 50% of the units designated as affordable studios or one-bedroom apartments. The units will include full kitchens. The lobby and meeting spaces will be converted into communal facilities including a gym, laundry room, bike storage, tenant storage and lounge areas.

Income eligibility will be tied to tenants who earn 80% to 100% of the area median income, with a target rental rate of between $1,200 and $1,400 for studio units, which Breen said is below the 80% area median income target of $1,700 for workforce housing in Kittery, as specified by Maine Housing.

The project would help address the town’s growing housing crisis while limiting the impact of new development by rehabbing an existing building, Breen said.

The property is already set up to accommodate long-term residential use, Breen said. Constructed in 1971, the building has 36 rooms per floor across three floors, fire sprinkler and fire alarm systems and exterior ramping for ADA access.

Renovations will be focused on the interior, but will also include much-needed upgrades to site as well, including the parking lot, stormwater runoff, landscaping and outdoor amenities. The plan includes adding a kitchen to each apartment with stove, refrigerator, sink and microwave.

The lobby, meeting spaces and other areas will be converted into common space, including a gym, laundry, storage lockers and lounge areas.

‘Obtainable’ units

The goal is to provide “obtainable” units for workers to live affordably close to their place of work, an opportunity that is increasingly unavailable, said Breen. 

The Kittery project is Blue Hour’s first in Maine.

Breen credited Doak and Farrell, who represented the seller, for bringing the property to Blue Hour’s attention.

“We had worked previously with Nick and Bob, and they knew what kind of property we were looking for,” said Breen.

“We had been in discussion with Blue Hour last summer around an opportunity in Massachusetts, so when this came on our radar, we immediately thought of them,” said Farrell. “It was pretty quick moving. Within a week of presenting it to them, they submitted an offer.”

The seller owns several hotels throughout New England and was looking to downsize a bit, Farrell said.

Founded three years ago, Blue Hour Housing’s sole mission is to provide obtainable housing. The company has developed properties in Vermont, Colorado and Connecticut. Two ski resorts in Vermont are among the company’s employer partners. The rezoning and conversion of a 66-unit hotel into a 56-unit multi-family property in Leadville, Colo., was recently completed.

Working with employers

So far, Blue Hour has developed about 150 rental units. The Kittery project will add another 108.

Typically, the company works with employers to understand their housing need, finds property to adapt and convert, then lease it to employers for employee housing.

The Kittery project diverges from that model a bit, in that Blue Hour doesn’t have a specific employer lined up.

“But we know there’s a ton of need among employers in the area,” Breen said. “This is a more of a traditional lease-up.”

Units will be available to local employers for block leases or to individual tenants who work in the area.

Lassel Architects in South Berwick is providing the design. The general contractor is being finalized. A final cost estimate is being worked out. The project received final approval from Kittery’s planning board in early August. Removal of old carpets and furnishings has begun. 

The goal is to complete the project by mid-2026, with the possibility of a phased approach.

Financing is provided through a mix of debt through Kennebec Savings Bank and equity through Cloudland Capital, a small real estate fund in New York City and Boston that invests in smaller endeavors such as the Kittery project. Cloudland’s co-founder, Matthew Karle, is head of acquisitions at Blue Hour Housing.

The plan for reaching out to employees includes speaking with employers in the area, such as Portsmouth Naval Shipyard and contractors who serve the yard, as well as hospitality and landscaping businesses.

The company’s name, referring to the twilight period at dawn and dusk, is a tribute to workers.

“It’s a note to folks who are up before most people and past most people,” said Breen. “Workers are up, making everything run.”

Sign up for Enews

Mainebiz web partners

Most Recent

Most Recent

Related Content

Thumbnail Davis Team leads golf tournament that benefits Travis Mills Foundation

0 Comments

Order a PDF