Greg speaks with Jim Brady, co-founder of Olympia Development, an award-winning real estate group based in Portland.
Produced by Trailer Marker Productions: http://www.trailmarkerproductions.com/
Engineered by The Portland Pod: https://portlandpod.com/
[00:00:01] We'd like to welcome our listeners to the Boulos Beat podcast. I'm your host, Greg Boulos. The company is Northern New England's largest commercial real estate services firm with offices in Portland, Maine and Portsmouth, New Hampshire.
[00:00:13] We've been selling and leasing real estate in Maine and New Hampshire since 1975. This is a series providing insight into Maine's real estate movers and shakers.
[00:00:28] I'd like to introduce Jim Brady.
Hello, Jim.
Good afternoon, Greg.
Jim got his start in real estate when he partnered with 1992 Olympic sailing teammate and developer Kevin Mahaney. Together, they started Olympia Development, an award-winning real estate group based in Portland that focused on upscale commercial and mixed use developments. Jim served as president of the company for 10 years, during which time Olympia completed over $200 million in real estate projects, which included several hotels and office buildings such as 280 and 300 Fore Street in Portland, which are respectively home to Bangor Savings Bank and CIEE. In 2008, Jim moved to Italy with his family. While in Italy, he served as Project Director for MProject, planning an historic rehabilitation of the famed Excelsior and Des Bains Hotels. In 2011, he returned to Portland and acquired the vacant former Portland Press Herald building. He renovated it to historic specifications, and it's now the highly acclaimed The Press Hotel, which is the first LEED certified hotel in Maine.
Jim serves on the boards of Portland Chamber of Commerce and SailMaine and is past president of the Children's Museum of Maine. He was a 1992 Olympic Silver medal winner and winner of the Rolex Yachtsman of the Year in 1990, awarded to the top sailor in the U.S. Jim was navigator on Stars & Stripes in the 1995 America’s Cup and was tactician on Young America during the 2000 America’s Cup in New Zealand.
Jim lives in Portland, Maine, with his wife, Julia, and their two daughters, Lila and Claire.
Welcome Jim.
[00:02:15] Thank you. That's some pretty good bio you got going there. Is there a reason? What I want to know is true. It is true to the best of my knowledge.
[00:02:22] So, Jim, how does a championship sailor like yourself who navigates the world end up in Portland, Maine, redeveloping properties into hotels and office buildings? How do you transition from one to the other? On the surface, they don't seem to have much in common.
[00:02:37] Now, it's a great question. And you know, interestingly, even though my background is really heavily geared towards the sailing side and Portland is a wonderful place to sail, I have done very little sailing here in Casco Bay or around the Gulf of Maine. But I ended up here because my former sailing Olympic partner, Kevin Mahaney, his business was based in Maine. And when I was looking to transition out of sailing, I had always been interested in real estate and thought it was a really interesting industry. And Kevin gave me an opportunity to come to work with him, basically said he'd pay me nothing if I'd come to work for them and he could teach me a lot. So I went for that. But really, more specifically to your question, to make it as a professional sailor, which is what I was doing as a career prior to getting into the real estate world. One of the ways you get paid is by working for very high net worth individuals who are spending millions of dollars a year racing their Grand Prix sailboats. And so a client that I might have in the professional sailing world would typically hire me to come and not only either race his boat by skippering it, but help him decide what naval architect we're going to hire to design the boat. What boat yard in the world is going to build that boat where we're gonna go racing it? So in essence, I ended up becoming a project manager for these multi-million dollar Grand Prix sailing campaigns. In that particular skill set translates very well into real estate development because it's very project management focused. And so I didn't have a finance background, which a lot of people have as they get into the real estate world. I've had to try to learn that part of it. But the project management skills were very transferable.
[00:04:16] As a professional sailor into being a real estate developer and of course, in real estate, there are project managers whenever a building is built. Somebody who oversees the project. So.
[00:04:26] Exactly. So it's very kind of targeted towards, you know, having having an end goal.
[00:04:31] A bunch of milestones along the way and following a process. And so I had some project management skills that I really learned your seat of the pants. And that's, I think, been successful for me as I've gotten into the bricks and mortar part of the real estate development world.
[00:04:46] So that bet you took with Kevin Mahaney taking a job with little salary, but getting a lot of experience really worked out.
[00:04:53] Absolutely. You know, I think that when you're getting in an industry like this and you want to be successful at it, you should go work with some of the top folks out there and recognize that you're not going to you're not going to make your millions in day one. You need to get out there and get some experience and get your legs under here and figure out how the industry works, where you can add value in a project. And so I think going and working with another firm and in trying to learn what you can do is a great, a great direction to go.
[00:05:22] That's great advice for folks getting into the business, whether it's in the development business or the broker produce business for sure. Regarding the Portland Press Hotel, how did that redevelopment come about? I assume it was a pretty complicated financial transaction, wasn't it?
[00:05:38] It was. You know, and I felt like there was, first of all, an opportunity in the market in Portland for a higher end product. And having been involved when I was with Olympia that develop the Hilton Garden and that's on Commercial Street, knew a little bit about the local market. But having spent a lot of time traveling around the world, staying in a number of hotels and working on a number of hotels outside of you in the U.S., I just felt like there was a a trend that was happening in the hotel development side where people were creating experiential hotels and it felt like we didn't really have that here in the city of Portland. And so I started looking for opportunities. When I moved back to Portland, Maine, in 2011 after my stint in Italy and the Portland Press Herald building was sitting there vacant when I came back in 2011. And so I looked at it. The owner had no interest in selling it. It was owned by John Kakalios, who has a number of properties in Portland at the time.
[00:06:40] And so I started getting a relationship with John. And eventually, after a lot of time and many months and a number of meetings, was able to convince John to sell the building. And I wasn't convinced for sure exactly what we do with it, but managed to figure out how it would work in layout. Well, as a hotel. As a boutique hotel, I'm sure he gave it away, too. He gave it away. Yes. And and actually, the interesting thing about is he almost gave up in having patience with me because. You mentioned the complex financing structure that was put in place, those deals take a lot of time to put together. And I went back for multiple extensions, of which with a fair amount of money if you'll give him, he would keep giving me extensions, but he eventually got to a stage where he was getting frustrated with the extensions and I almost lost it because we weren't really ready to close.
[00:07:36] And he was kind of getting tired of tired of extending the purchase and sale agreement. But one of the advantages that that building had was it's it was considered a contributing structure in a historic district. So the Congress Street historic district. And what that does is it qualified us for federal and state historic tax credits. The federal historic tax credit is worth 20 cents on every dollar spent on qualified rehabilitative expenses. And the state won is worth twenty five. So forty five cents on the dollar of qualified rehabilitative fences is a huge chunk of money. So really critical to the financial success and getting our cost base is down enough on a project like that to help make it work. And just before I leave the historic piece, the qualified rehabilitative expenses is architects and engineering fees. A number of the soft costs related to financing all of the hard construction costs that goes into the projects. So it's the large majority of every dollar you'd spend redeveloping or re-positioning a hotel like that.
[00:08:44] Do you think it would have happened if those tax credits weren't available to you?
[00:08:49] I don't think that project would have worked. We we generated so much equity tax credit equity by those two credits. And then the third one we did, which is what really made this a complicated structure called a twined structure with a third tax credit. We used was a new market tax credit. So as a state of Maine, new market tax credit. There's also a federal, state and federal new market tax credit. But we didn't qualify for that one. We did for the state. And that generated an additional roughly three million dollars of capital of tax credit equity for the new market. So it was a fairly complicated transaction that had over $9 million of tax credit equity into the project. And so I'm quite sure that that project would not have happened without those type of financial incentives to to help make it work.
[00:09:38] Well, it's a beautiful hotel and you should be congratulated on.
[00:09:41] Thank you. Yeah, it's something I'm very proud of. It's it's it's actually turned out doing better than I would have imagined for a couple of reasons. Number one, I think the market in Portland has done better than we thought it was going to. It's continued to grow and the demand is certainly increasing. And we thought that that there were people who wanted that more unique boutique experience. And I think I'm even underestimated that. And we've been able to generate a pretty significant rate premium over our competitive set in the marketplace because they like the product, they like the service and and the hotels in a great position as well.
[00:10:18] So I'm going to ask you, when I was a kid, which was a long time ago, you're still a kid, still active, maybe in heart, our school. When I was in grammar school, we took a tour of the Portland Press Hotel, not the school, the Portland Press building. Back when the paper was there and we were given a tour of a tunnel that goes underneath Congress Street, which went over to the former printing press. So I bet most people don't know that there's a tunnel underneath Conger Street, but maybe you could talk a little bit.
[00:10:49] Well, there is. And most people are surprised to hear that. I don't know of any other tunnels in the city of Portland. And you're absolutely right. There is a tunnel that connects the the old Portland Press Herald building to the printing building across Congress Street, kind of running diagonally there almost in front of city hall. So it's buried, you know, some 10 or 15 feet below the surface of Congress Street and was a means for the newspaper editors to get from the printing building across the street over back into the editorial offices. And without kind of going there is literally ramped. So carts could run stuff back and forth between the two buildings.
[00:11:28] It would've used for now or is it just blocked?
[00:11:30] So it's blocked off. And fortunately, it's the way we setup the purchase and sale is I actually didn't want to own it. I was a little bit worried about the liability, frankly, of the tunnel. And cockily this was actually really happy to keep the tunnel. So I ended up not getting it because it would be canceled, ossified as a dead end quarter if you can't exit both directions once it's over. I think it's 20 feet long. We ended up having to block it on our end. And so it's unusable at this point in time, which is too bad. But it's pretty, pretty unique little archaeological thing there to have a tunnel running underneath Congress Street.
[00:12:06] So that's very interesting. Heading down Exchange Street from where the Press Hotel is. A block or two, you just finished up the renovation of 80 Exchange Street. It's an office building next to Tommies Park that has a new new mural on. It was 80 Exchange Street. Another tax credit deal?
[00:12:25] It was, yes. So that's a it's about a 15 thousand square foot four story building that was built in the mid eighteen hundreds. It had been offices on the upper three floors for the last few decades, probably since the 1970s, I'm guessing. And the time that it had been renovated back then was not well done. They had put a new elevator in and some things like that, but the office spaces would be really classified as kind of B-minus grade spaces. And I just thought that the building was really well located. One of the few buildings that hadn't done a major upgrade in the last 20 or 30 years and provided an opportunity to really bring a red brick building with wooden structured floors up to really more of a class a level. So we we went in while the building was owned by a local attorney in town with a few partners. He was this particular owner, was very interested in staying in the deal, but recognize that he didn't have the expertise to go redevelop it. So was able to put together a deal to get controlling interest of the buildings of 51 percent of it. He stayed in at 49 and we used again the federal and the state historic tax credits to renovate that building. We gutted the upper three floors, a second, third and fourth floors, literally bringing it back to the to the wood floor joist and re leveling the floor. Joyce, because most of these buildings have floors that you can sit in your wheelie chair and roll from one end of the office to the other. So we leveled all the floors and put in a new chilled beam HBC system, which is probably one of the most sophisticated systems you can put into a building.
[00:14:05] Streamline, energy efficient, all new windows, new dormer, all new insulation, all new restrooms with showers. We did not go for LEED certification of the building, but I'm convinced it would have been a very easy thing to do. We just didn't pay the soft cost to go get the plaque. But it's quite it now an energy efficient building with all new LRT lighting, and we were quite fortunate that we did it at a time when the market was looking for some nice space. So we were very fortunate to land Herriman architects to take the whole third floor state 23 media to take the whole second floor. And then our company Fathom is in the smallest floor, which is on the fourth floor. We did that whole renovation while keeping the retail tenants on the ground floor. There was a few times we had to close them. But the Grill ROOM Restaurant and Suess time were the two retail tenants on the ground floor, and we operated around them, working closely as we could with our contractor and others and the tenants to try to keep them in business and happy. While the building was staged in new electrical systems and everything else were put into the building. And we replaced all their storefronts and brought them back to their old original historic storefronts as well. It came out beautifully. Thank you. I'm really excited about it. And then you mentioned also the mural I was going to ask you.
[00:15:23] There used to be a mural there. Right. You replaced it. I love what you put on there, by the way. Thank you. Thanks. What's what's the story on that?
[00:15:30] Well, so there there had been a mural there from back when they first tore down what was a Tommys hardware store that used to be there where Tommy. That's why it's called nicknamed Tommy's Park. That was Tommy's hardware store that sat there. One, one or one and a half storey building. I don't even know how long until the 1960s or so. And around the 70's they put a mural on that wall for the first time.
[00:15:54] But the condition of the wall was so bad and it deteriorated very quickly. And so they then decided they needed to come in and put a new masonry wall up. So there was a new false wall added to the outside of the exchange on the on the park side. And they put up a Trump Lloyd Trump Lloyd mural that was done by Chris Dennison, who is a local artist in town, together with C. Michael Lewis and some others that were involved in that in that mural, stood there for, I think, 30, 33 years. So most people are very familiar with that Trump LOI image. That was a kind of a concept of a piece together of images of city hall together with the old U.S. post office. They used to be processed right across the street. And so when it came time for us to renovate the building, it was clear that that wall was deteriorated and needed a lot of work. So we had to reskin the whole wall, which meant that we couldn't save the old artwork. And as we ended up with a blank wall, we thought, well, jeez, we ought to really come back and do something interesting on that wall, a new mural. So I engaged Aaron Hutton, who was a faculty at Mecca and had her put together a call for artist.
[00:17:07] We got over 50 responses from artists all in Maine. We we said they had to have a connection to domain. So we got 50 wonderful presentations. Narrowed it down to three. Gave them a stipend to come back and refine their proposal of the top three. And ultimately in a local artist name, we'll Sears was selected by the selection committee to put up the new mural, which just finished. And it's a it's a very forward looking piece. It is not a Trump ploy and it's a bit more contemporary modern art. And it's meant to represent the colors of Portland at dawn and dusk.
[00:17:44] And I think, you know, I was going to suggest that. What kind of reaction have you had to it?
[00:17:50] You know, mostly it's been positive, but it has not all been positive. There are been there've been some folks who said, geez, they think it's too bold, too bright and would have preferred the Trump LOI. But I would say the majority that I've spoken with seem to really love it and think that it's is representative of the city of Portland, which is moving forward. Portland's changing. And to go back and do something that was already there just felt like we were going backwards. And so I think this is a a piece of artwork that's really representative of what's happening in our city, a city on the move, a city that's changed in a city that's looking forward. And I think the artwork definitely does that.
[00:18:26] Well, a lot of people hate change, you know, and but I think once it's up there for a while, they'll be fine with it. Yeah.
[00:18:31] Yeah, I've been seeing a lot of folks taking their little selfies and posting on Instagram. So it's so. So far there seems to be a lot of traction on it.
[00:18:39] I've got one of Fred forceably in front of it just the other night. Good. Well, maybe we can post that when we do this video.
[00:18:47] It seems like every time I go to a social event gym, I get asked about all the hotels going up in Portland. You've got a hotel, another hotel planned for Commercial Street. I can take. Think of two or three other hotels that are coming online within the next two years. Can you talk about your proposed development? A comment on demand. And do you see the bubble bursting anytime soon?
[00:19:10] Well, those are three good ones. And certainly the last one is the one that keeps me up at night. None of us in this industry want to see anything burst. I think that I'll guess I'll attack that one a little bit to start with.
[00:19:24] I think that there's some chance that we're gonna have a softening in the future. We've had an awfully good run since the last real recession of 2008 to two thousand nine or 10. And Portland, Maine, really came out of that pretty strong. And the tourism side has really started to discover Portland, Maine. And so the demand for hotels is certainly gone up. You can all buy data to start to see what your competitive sets or markets do with regard to the average daily rate and the occupancy of a of a group or a market of hotels. And it's pretty clear that that the Portland market has been increasing significantly. And so far, up until now, it's been the demand has been outpacing the new supply that's been coming online. But I hear the same thing people say I can't believe it. Another hotel coming. The hotel market in Portland has been strong enough that it has generated some new hotels and managing to keep the rates and the occupancy high enough for them to make their yield and return on investment that they're looking for there. There are a number that are coming. And so I do worry a little bit about are we gonna get oversupplied in this market? There's a new a loft hotel that's going up where the old roof is.
[00:20:36] Dering lumber site was a new AC hotel opened last summer on the waterfront and on the waterfront exactly near the Wex is new headquarters. And then Fred Fawzy is building another one over there, the shipyard brewery site, Cambria Suites, a camera suites brand, which is a choice product. And the one that I'm working on is a canopy by Hilton. So hundred and thirty five rooms on the corner of Commercial and Center Street. It's a site they're requiring from North River, who acquired one in two Portland Square and the two large parking lots that are behind them. They go all the way down to commercial. We've been approved by the brand. We've already gone before the Historic Preservation Board and gotten our certificate of appropriateness because we are in a historic district and we are anticipating getting site plan approval in the next six weeks and breaking ground on the hotel this fall with a planned opening in the spring of 2021. So what's 18 April? 18 months of construction is what we're figuring. And of course, we're worried about construction pricing right now. We're sure you've been reading about it. But, you know, D.O.D canceling projects. The city of Portland put schools out to bid and came in way over budget.
[00:21:50] And we're we're very concerned about that. That's one of the biggest issues where we're struggling with right now. But we're really excited about the project. We're gonna have the first rooftop indoor outdoor bar here in Portland. So overseeing the Portland Harbor or the Fall River there, we think will be pretty spectacular location for that. And, you know, I'm a very design oriented person, so we're. We're putting a lot of effort into not really just the exterior where we had certain, you know, limitations that we could or couldn't do because of historic, but because we are doing mostly a red brick building. But on the interior, we've worked really hard to get a great design team that's actually based here in Portland, Maine. That's the interior designer Allen Studios, who just moved up here and just opened their offices in Portland. And they're doing that. I think a super job on the interiors of the project.
[00:22:41] So as new construction, there's no historic tax credits there. Correct. But it is an opportunity zone really. Just to tell us a little bit about that.
[00:22:50] Yes. So as part of the Tax Reform Act of 28 December of 2017, the Trump administration passed listen. Legislation that created a new economic incentive tool. And it's something that happens to work quite well for real estate development, where it's encouraging people to invest new capital. And so the governors of each state were allowed to designate areas within their state that would qualify as these opportunity zones. And Portland, uniquely enough, is really the engine for the state of Maine was fortunate enough to get a zone that includes the majority of the working waterfront area all the way up to the spine or top of the hill, all the way to Cumberland Avenue. And so our site turns out to be in an opportunity zone, which was quite helpful for us. In essence, what the opportunity zone can do is generate a slightly greater additional return for the equity. Investors are going in by both a tax deferral, a reduction in the taxes that they ultimately do pay after the deferral period is over and a skip on the capital gains tax on the new investment you've made. So it's kind of a three legged stool and that generally can add something like 5 percent to the internal rate of return. So it's probably not going to get you to do a deal that you wouldn't have done already, but it definitely can create some icing on the cake.
[00:24:16] And I think because our project was fairly mature, it wasn't really what I guess you would call shovel ready, meaning all permits in place and literally ready to break ground. But our project was pretty mature. We were far down the path on the permitting. We had a solid brand already behind us. We had a number of things going for us and that allowed us to to attract equity investors into the project who were very keen to play some money in an opportunity zone to get that tax deferral that they were looking for and something that anything that they would have triggered a capital gain in the last hundred and eighty days.
[00:24:52] You know, we had a lot of interest in it and probably could have had even more investors if we we were we were oversubscribed and not able to take all the money.
[00:24:59] And that's a good place to be on.
[00:25:01] When you're out raising capital in Biddeford, Biddeford, Maine, you've got plans for a hotel and other things. Can you tell us a little bit about that project?
[00:25:11] Yeah. You know, betterfor it is interesting, though, Biddeford Socko area down there. And I've I've just in the last couple of years started to get to know that area better. But as Portland is becoming very popular and be also on the residential side as well as the commercial on the hotel front, you know, Biddeford and Biddeford socko area starts to become a bit of a value play. And one of the reasons that I really like that area is that it's 20 minutes closer to Boston, which is really our, you know, our New York City, if you will, where a bedroom community, if you will, to those larger markets. You've got a train stop, you've got University New England, and you've got all this middle space downtown that can easily be converted. So I I'm seeing some really exciting things happening in downtown of those communities as the values of Portland real stator are escalating. I think places like Biddeford start to become a real value play. And so I recently put a deal together with another local gentleman, Brian Eng., to do a joint development with the city of Biddeford on the old Merc site. So it's called Three lincoln., where the old main energy recovery center was located.
[00:26:19] The city years ago finally decided that the the energy, you know, trash incinerator that was operating the city had been driving opportunities out of the city. And values had been really dropping. And most people that know what that facility was just nobody wanted to go to Bedford because it smelled and had this awful thing there. So the city wised up and acquired the Merckx facility, tore it all down. Did the environmental remediation and now has this 8 acres of land that they're looking to try to create a new parking garage, which the city is going to do, a new waterfront park and a continuation of the Riverwalk. And then it creates then two additional paid sites, roughly three ish acres of land. And so we've done a development joint development agreement with the city to be the master developer for those two sites. And so I think there's some great opportunity there, particularly as the city moves forward with this new park. Structure is the city, the city of Biddeford has gotten tapped out with not being able to fill all the middle space until they can create more parking.
[00:27:21] It's got to have the parky. You know, I got to ask you, what do you think the Biddeford City Council was thinking of 20 years ago when they put the trash incinerator in downtown Biddeford? I just. I shake my head.
[00:27:33] Yeah. And I guess it was probably more than 20 years ago, but I think it was one of those moments of desperation is all I can guess is that you've got these millions of square feet of male space. The mills go out of or out of business. The economy's just gotten killed and there's, you know, all those empty vacant space and no more tax revenue coming in. And so they saw an opportunity and went for it. And it's clear in hindsight, I think it was the wrong call. But interestingly, the city manager there, Jim Bennett, had a stat and I won't now know what it was. But since they've turned down the old main energy recovery center, I think the value of properties in downtown better food has gone up by over $200 million.
[00:28:16] I believe it. I believe it. And I think that is was the catalyst really for Biddeford making a comeback. I agreed. Getting rid of that.
[00:28:24] Yeah. And, of course, you know, Doug Sanford took a big risk years ago when he bought the million square feet of the old pepper all mill and has been successful converting a lot of those spaces. And I think he's got six hundred or so hundred thousand square feet of at least now. So, you know, 60 percent of his million is filled in. I think he's continuing to convert more and more all the time. So I think there's some great opportunity down there in the Biddeford soccer area.
[00:28:48] You also mentioned hotel and I had been working on a project on Factory Island or some people call it Socko Island, which is just adjacent to the Amtrak train and transportation center there with another developer who acquired the land. I guess about two years ago and was really keen to have a hotel there. I met with them, said we'd be very interested in doing one. I don't know if that project will get legs or not. I hope that it will. The developers had a tough time getting his approvals and his financing in place, but we're we believe that there's an opportunity in that market for a smaller hotel.
[00:29:28] It's certainly not the Portland market, but we think there's some demand that's down in that marketplace. And we think a smaller 40 to 50 room type place could work there on the waterfront. On the Socko River. So I'm hopeful that we'll something we'll come together on that front. And would you manage it? Yes, we would. So fathom, you know, in essence, we think of ourselves as an equity investment group, a hotel management group and a real estate development group. So we're really kind of filling out the the full spectrum of services. We don't do property management like bolus might do for office buildings, because my sense is you've got to have just way too much scale. We don't have the scale to do that effectively, but we do have some expertise on the hotel management side. So we would develop it, put the capital stack together from a financing perspective and also then manage it.
[00:30:17] I'm going back to Portland for a moment. Everybody notices a parking crunch in downtown Portland. How do you think that's going to affect development going forward? What's the solution?
[00:30:29] Well, that's a that's an interesting one, because my wife is very forward thinking and progressive and is telling you why. Why would anybody build a parking garage? You know, we're all going to be taking driverless cars and there won't be cars eventually in the future.
[00:30:40] So, you know, the one of the things that we have to be thinking about with parking garages is, you know, how do you make them so that they are convertible? And I don't know what the date is. Is it 20 years and now is it 40 or 50 years from now? But I do think that eventually there will be an oversupply of parking. But we've got to get through this next quarter or half a century until that time comes. And you're right, there is definitely a parking crunch that is happening in Portland right now. I'm getting ready to develop a hotel on a surface parking lot, and that's great development. We were just in front of the planning board last night. And, you know, the planning board says this is the great kind of project we love to see. You're taking a surface parking lot that does no trees, no island, no nothing, and you're putting a development on it. We love that. But we've got to deal with the parking. Yes. Did they ask about the park? They did. And, you know, it's interesting that they are trying to minimize the number of spaces that are generally provided.
[00:31:35] So it's in the old days, I would have said planning boards and planning staff. We're looking to have all this, you know, huge capacity parking. And I think they're trying to be a lot more cognizant now about trying to limit the parking so we don't overbuild parking. And. But you know that the my project is going to be leasing parking from North River who are buying the site from and they have a huge swath of surface parking lots with the intention to develop what will end up being approximate. Thirteen hundred spaces between their whole development there. So they'll put up a parking garages. So they are planning to put up a parking garage. It was shown in their master development plan that was presented to the city. It's an eleven hundred space parking garage on the lots right behind one and two Portland Square. Yeah. And of course, you know, there's Jonathan Kelly has been. Sorry. Jonathan Cohen has been doing a new parking garage that's broken ground down off Fourth Street in the area near Wecks to help service a lot of the new development that's happened there in the East End.
[00:32:34] He's going to have, I think, two floors of parking and 70000 square feet of office space up above.
[00:32:39] Yeah. And then Ed Gardner just add a new parking garage up on Congress Street between Cumberland in Congress. So there's there's definitely need for parking. And I just hope that, you know, at the end of the day, these these garages can be converted to things that that make more sense. Maybe they can you know, garages can easily be converted to residential in 50 years, but that's pretty hard with the existing ones because of the ceiling heights just on height. Right. Right. Exactly.
[00:33:07] So what do you see as some of the headwinds to growth of real estate in Portland and in the state of Maine in general?
[00:33:17] Well, you know, I think that for the city to be successful and for the state to be successful, we've got to grow. And so we need to bring more people into the state. And sometimes that can be looked at as, you know, tax policy. It can be looked at as, you know, friendly business environment. And, you know, I think the state of Maine has had a pretty low growth rate. New England as as a sector, has been lower than many other parts of the country. We've been fortunate that Boston has done really well. And I think, you know, the southern Maine community kind of Portland and South tends to do well when Boston does well. Yeah, I worry a little bit about the city of Portland, which has had some success deciding that they think that they can become an island to themselves. And that's what really worries me the most, is that that the council, from a policy perspective, maybe doesn't think about how they need to benchmark themselves against other communities in other cities, particularly in our in our nearby region, not just within the state, but also all the way down to Massachusetts, Rhode Island. And so I worry sometimes when I start seeing policies that can be considered kind of anti-business, that might force companies or push companies, you know, out of the city and move to South Portland where they might have better, better treatment. And then I think we have to look at that at the next gale from the city side and to look at at the state side. We don't want companies moving wonderful companies like Wecks and Vets First Choice or CO veterans now that are growing their companies and bringing in exciting young new life and people and creating some great jobs coming to the city. We want to make sure we keep them here, keeping growing here.
[00:34:56] And we're actually starting to see companies currently located downtown Portland looking to go to the suburbs primarily because of the cost.
[00:35:07] Normally the cost of new construction is high, but parking costs I that over and over and the availability or lack thereof.
[00:35:15] Right. Right. You know, I mean, I think that some of those larger companies that are paying great wages helps a lot of things. First of all, it helps the affordable housing piece in the sense that if you can raise people's wages, then that helps mitigate the gap between the cost of housing and what people can afford. So that's a really positive thing. But I also think that a lot of folks that are coming in wanting to work at companies like that, want to live in a city where they can live, work and play to use the old kind of statement. But I think it's going to drive housing demand pretty significantly on peninsula for people that want to come in working great companies like that and not have to deal with commuting to a suburb where, you know, you and I spoke about this little bit earlier.
[00:36:02] You live downtown with Julia. And I guess you share a car.
[00:36:06] We do. We became a one car family once we moved from the Yarmouth suburbs into the city. And it's rare that I have to take an Uber, but that's that becomes the second car. And that's a lot cheaper than owning a second car. And it's certainly a lot more environmentally friendly as well.
[00:36:22] And as a result, you just called me up and that's gone awry. Right. All right. You got it. I also play the overture. Do you have a nice car? We will go there. It just just summarize what you see. Some of the positives. Portland has going for it. And Biddeford.
[00:36:39] Well, I think their coastal communities and you know, if you really look broadly across the country, you know, the places that are doing well, a lot of them are on the coast, have access to the water, whether it be the lakes or the ocean. And in our case, I think we've got both. We have great access to lakes with unbelievable access to the ocean. I think we've got a downtown that is vibrant and interesting and has a lot of cultural events going on for the size of our city, some wonderful cultural institutions from the Portly Museum of Art to the symphony to, you know, all these great smaller organizations like Space Gallery.
[00:37:17] So I think that culture leads to it. We have a historic district which, you know, has a wonderful number of buildings that create this great character and texture within the city. And people are being drawn back to these urban areas. I mean, the suburban flight of the 70s and 80s is is dramatically reversed. And people want to live in places where they can walk and bike ride and and walk to shops and galleries. And, you know, Portland has this really unique aspect of feeling very localized to we're not huge on a lot of the big national brands. There's a lot of local entrepreneurs and creative types. And I think people that are growing up and living in places like Atlanta or Dallas and, you know, come to a place like Portland, Maine, and they're just wowed by, you know, the beautiful architecture that we have or, you know, red brick sidewalks in the the little coffee shops and art galleries. And, of course, the culinary scene is really driving a lot of that to Portland.
[00:38:13] Had great weather. We have.
[00:38:16] Only problem. My, my. Why would one come on, that is my my wife, who is really a big environmentalist and now working hard on a lot of climate change issues.
[00:38:26] You know, loves to tell me that, you know, and I think it's 2050. We're going to have the same weather in Portland, Maine, as Philadelphia. And that's a terrible thing, except if you live in Maine.
[00:38:37] If we wait long enough, maybe if we like Florida. With with taxes. But Biddeford, too. Let's talk a little bit. What are some of the positives on Biddeford?
[00:38:47] You know, I think Biddeford has a lot of space that's still available through the mills. A lot of development opportunity. It's a it's a value play. So you can still get in at a reasonable cost. You know, there's a saying before I think that Biddeford has this closer to Boston. It has public transit in the sense of the train station. The bus station. That's right. Located right downtown. You know, the Riverwalk and connected to, you know, having these wonderful parks along the waterfront. I also think it's helpful in places like that, too, to have a wealthier community nearby that helps create and support a lot of the cultural activity. So having a bit for pool and Kennebunkport nearby and having some wealthy communities can can actually be quite helpful for these downtown areas to help build the cultural capital that they need to create things that for people to do. And it's becoming, you know, a bit of the culinary scene in its own. You've got the Palace Diner, which everybody knows is great. You can't get a better burger than at the Bout Palace Diner. But, you know, recently we've had a an Award-Winning chef come in open l_d_a_ because he decided the cost of restaurants space was too expensive in Portland and decided on on Biddeford.
[00:40:00] And there he's got this wonderful restaurant that the Portland Press Herald said when they raided, it was the top new restaurant in southern Maine in two years. So, you know, phenomenal. That's a great foodie city. And yet, you know, we've got this restaurant down, a Biddeford that's, you know, right there with them. So, no, I think there's great opportunity. You know, all along the coastline here, Maine, the quality of life here is great in the sense of getting easy access to the outdoors. You know, Portland Jet Port is been a lifesaver. I love the fact that they did a big addition there. And we continue to get more flights in and out of here, making it a lot easier for us to commute to places without having to go to Boston or Manchester would go to. We used to do now nonstop. Yeah. That's great. I wish that even though we call it the Portland International Jet Port, that we did more international flights in and like let's step into the 21st century, that to think that we're proud that we call it a jet port and that it should it was it a propeller support for that?
[00:40:57] Go back to airport, right? Yeah. Jim, last question. Look into your crystal ball, which I'm sure you have with you. For the next 10 to 20 years, what do you see happening to commercial real estate here in Maine?
[00:41:12] In Portland in particular, and we're gonna play this back in 20 years just to see if good you see, I was on the first of all. But yeah, I mean, where do you see the city heading?
[00:41:22] You know, I remain bullish on Portland itself. I think there's some some incredible things that are happening in Portland. I still worry a lot about the overall state of Maine, particularly north of Portland. You know, we're in a scenario that's a bit of the opposite of where I lived in Italy and all the all the finance and the engine of the economy of Italy is all driven of north of Rome. And all the social services kind of money spent is on the south side. And we're a bit upside down on that in the state of Maine. And, you know, with the timber industry at where it is a paper industry. You know, we have some wonderful natural resources, but I just don't know how we're going to capitalize on those economically to really bring back some of the northern parts of the state of Maine, which I hope they can. But I think in Portland, I remain bullish on Portland for a number reasons. I think that seeing things like Wecks growing the way they're growing and committing to new office space, that's attracting some really top talent here and in the state. Co Ventris Doing the same type of thing. Those types of things make me feel good about what's happening in Portland, not only just overall, but also you asked earlier about the hotels. A lot of these companies are driving hotel demand too, whether it's not just their employees, of course, but it's more of the kind of business, transient business that's coming to visit them. What do you call their heads in beds? Heads in beds? Exactly.
[00:42:46] You know, and I think the other thing that's important is these educational institutions. And we touched I touched on that briefly with Bedford New with you and me being there in town. But of course, we've got the University of Southern Maine here. We've got Maine College of Art located downtown. Both of those institutions are phenomenal. I think the university might be changing the name to the University of Maine, Portland. But there's some exciting new things happening there. The graduate school that they're looking to merge the law and business school together and create a new program. And there's the New Ideals Center, which is being talked about where David Rioux is looking at trying to build a new life sciences graduate program here in the city.
[00:43:26] Some of those types of things, I think, are really what's going to make Portland kind of make a hugely and be a really positive place to be long term and kind of acres. Portland in terms of. Absolutely. Absolutely. And, you know, we're gonna like any real estate market. It's going to have it's cyclical times. But I continue to be bullish that long term we're gonna be in good shape in Portland. Hopefully we'll weather whatever the next storm is that's coming.
[00:43:54] And in that, it's not that it's that it's a minor cold front and not not a hurricane like what hit in 2008 09. But I remain bullish on the fact that I think people want to be in places where they can enjoy the kind of lifestyle that we live here. And it's it's a very different lifestyle than the big primary markets of New York City or places like that. My wife and I, when we move back from Italy, had no tie to Maine. Neither of us had a job here. We thought about moving to London and all places. We ended up back in Portland, Maine. And I love it. I was it was at Bard Coffee the other day. And I saw this foreigner who was clearly a foreigner, is wearing a beautiful suit and everything. And I went to introduce myself saying, well, what are you doing here in Portland, Maine? And so I just moved here. I'm mean, I'm in the fintech industry and just got a job. And I came from Barcelona, Spain, and I'm working for Wex. And when we're attracting people like that to Portland, Maine, I love it. And my wife and I decided to move back here because we love living here. And there was a place we went to raise our kids and we're delighted that we made that decision.
[00:45:00] We're glad you moved back. Thank you. You can learn more about Jim at Facebook by looking at the Press Hotel or Union Restaurant on Instagram, go in and look at at the Press Hotel at Union Portland and at Fathom Companies, I'd like to thank you for listening today.
[00:45:24] And if you'd like to learn more about the Boulos Company, please be sure to visit us at w w w dot bolus dot com. You can find us at the Boulos Company on Facebook and LinkedIn and @theboulosco on Instagram and Twitter. And lastly, if you want to know the secret only real estate. It's pretty simple. Just be sure to outlive your debt.