2017-12-14 / Front Page

City hires commercial firm to market Unit 91

By Grant McPherson
Staff Writer

SACO – A Portland based commercial real estate company has agreed to market Unit 91, a tax-acquired property placed in city ownership because of unpaid property taxes almost two years ago.

The Dunham Group agreed to list the property just before Thanksgiving according to Katie Millett, a broker for the agency. Unit 91 is an almost 60,000-square-foot mixed-use section of Building One on the west side of Saco Island. The lower level of the property consists of a parking garage with 41 spaces plus dry storage and the upper level is about 30,000 squarefeet of commercial space. Economic Development Director Bill Mann said the property is assessed at $744,500. It is listed for $450,000.

The city acquired the property in January 2016 due to about $300,000 in unpaid property taxes from Island Terrace Owners Association. Unit 91 comprises about 25 percent of Island Terrace Owners Association property. The unit’s new owners will have to pay the condominium association approximately $6,000 per month in fees.

By the end of October, the city had spent $255,000 in maintenance, repairs, heating, electricity, condo fees and attorney time and received about $60,000 in revenue according to City Administrator Kevin Sutherland.

While Dunham Group will negotiate the unit’s sale with all future buyers, there are a few interested buyers able to purchase the property for a lower commission, but Mann would not comment who they were. He said that while the council has reviewed several prospective buyers since a request for proposals was released a year ago, city officials have been unable to agree on one yet. Mann said the city chose to hire a commercial broker to help spur renewed interest in Unit 91.

“As part of their due diligence before they submitted their bid, (Dunham Group) brought a client in that day to look at it,” he said.

Mann declined to say what Dunham Group’s commission on the property’s sale would be, only that “the more they sell it for, the more they’ll get.”

Mann hopes the sale of Unit 91 will help the city recover the money it has spent on the property. Efforts to sell the property have been hampered by several factors he said, which include easement issues and repairs. The city paid to fix an elevator and staircase in Unit 91 as well as bring the building up to code.

“Our effort is to recover the cost the city has funded and turn it back into private hands and return it to the tax rolls,” he said. “We’d like to have someone develop that space, maximize the value and add even greater taxable value for the city and citizens of the community.”

In an email, Millett wrote that there are buyers already interested in the property but that it will be several months before the property is sold. Millett does not expect Dunham Group will have difficulty finding a buyer.

“From a commercial real estate perspective it is not necessarily that large but it has its own challenges just like any other property,” she wrote. “Some buyers might not want to be part of a condominium association but given its location and associated parking garage I think we will have lots of interest.”

Ward 7 Councilor Nathan Johnston, whose district includes Unit 91, said discussions about prospective buyers of the property occurred in council’s executive sessions and he could not comment on them. However, he said several offers within the past year weren’t very serious because of the many issues associated with the property that the city has since corrected. He said he’d like to see the space be used for commercial development so that new Saco residents have more job opportunities.

“(The sale) is a pretty high priority at this point,” he said. “Every day we own it, it’s costing us money. The feedback from Dunham Group and several other commercial brokers was that they felt the value was much greater than what previous offers had been on it. There’s a value as far as man hours and city resources that went into this that’s not factored in. Between Bill Mann and Kevin Sutherland, they probably have 100 plus hours into it. We have to recoup their time as well as the monetary value.”

In response to a claim that the city did not have to take ownership of Unit 91, Sutherland said the matter was out of his control.

“If you don’t pay taxes for 30 months, you lose your property to the city or municipality in which the property resides. There’s nothing I can do about that. I could have turned around and tried to sell it immediately, but there were a lot of outstanding concerns and life safety issues and we’ve been dealing with those for a while.”

Dunham Group will advertise Unit 91 on New England Commercial Property Exchange, LoopNet and the group’s own website. Sutherland said he is ready to pass ownership of Unit 91 along to the next developer.

“I have been talking about this property for almost two years now,” Sutherland said. “That island is the heart of downtown. It needs to succeed and finding the right future owner is important to the city of Saco.”

Contact Staff Writer Grant McPherson at news@inthecourier.com

FMI

The Dunham Group has listed the 60,000-square-footproperty for $450,000. It is assessed at $744,500.

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