Building materials are transported Dec. 12 in front of the Lockwood Mill building at 6 Water St. in Waterville. The building is being converted to apartments. Rich Abrahamson/Morning Sentinel
WATERVILLE -- A highly anticipated $40 million housing project in the former Lockwood Mill on Water Street is expected to deliver 15 new units to tenants shortly after Jan. 1.
The North River Co. project is expected to include 65 apartments, joining other projects that are either in progress or expected to launch in 2025, bringing more than 100 housing units to alleviate the city's housing crunch and adding more retail and office space.
They include Head of Falls Village at the corner of Temple and Front streets, scheduled to bring 63 housing units, and Manor Gardens on College Avenue that developed 20 units, most now occupied. The developer of that complex is working to complete units now. Kennebec Valley Community Action Program plans to start working on a 37-unit apartment complex in February or March at the corner of King and Gold streets in the city's South End with an opening slated for spring 2026.
"It's such a relief to see projects like the Lockwood Mill finally preparing to open their doors to tenants," City Council Chairwoman Green, D-Ward 4 and former chairwoman of the Waterville House Committee, said. "It's been a long time coming, and we still have a long way to go. But this is great news for Waterville."
City Manager Bryan Kaenrath said the exciting thing about the projects coming online over the next several years is that most are within walking distance of downtown, which will increase foot traffic and be of great economic benefit to that area and to revitalization efforts. The Lockwood project is especially big and the work moved quickly.
"It's exciting to have that building brought back to life," he said.
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Garvan Donegan, director of planning, innovation and economic development at the Central Maine Growth Council, said conservative estimates indicate that 300 to 330 housing units are in planning or development stages and, based on trends and the last few decades of housing development statewide, evidence suggests the city could absorb 500 to 1,000 units annually over the next five years.
Workers confer will facade work is taking place Dec. 12 in front of the Lockwood Mill building at 6 Water St. in Waterville. North River is adding residential units to the building. Rich Abrahamson/Morning Sentinel
LOCKWOOD MILL
Adam K. Myers, managing director of North River Co., said the majority of the facade, window, roof work, building systems, and the first 15 residential units at the former Lockwood Mill at 6 Water St. are essentially completed. North River is working on the next phases of residential units and some facade work on the building's west side, he said.
Officials expect to complete the project, which is on schedule, in early 2026, he said.
Last year, North River and partners secured financing. While it had worked for months on abatement and cleanup issues in the building, major construction was delayed because of several factors related to the COVID-19 pandemic, including construction costs, officials have said.
Cianbro Corp., which is also working to replace the Ticonic Bridge adjacent to 6 Water St. and spans the Kennebec River between Waterville and Winslow, is the contractor.
About three-fourths of the building is to be redeveloped into 29 one-bedroom, 22 two-bedroom and 14 three-bedroom units on five upper floors of the southernmost wing of the six-story building parallel to the bridge. About a third of the 65 units are expected to be completed in 2024, with more units completed in 2025 and 2026.
Rents will be tied to the local median income, and all the units will be marketed, leased and managed by the Waterville Housing Authority. North River worked on the project with the Maine State Housing Authority, an independent organization created by the Legislature to address problems with unsafe, unsuitable, overcrowded and unaffordable housing.
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A commercial space is planned in less than 4,000 square feet of the building.
North River is using three types of tax credits: low-income housing, federal historic and state historic. In 2022, the mill project was also awarded $1 million in federal American Rescue Plan Act financing.
Related Waterville mill redevelopment plan on hold as developer grapples with construction costs, financing
North River also owns 8 and 10 Water St., the latter of which is the Hathaway Creative Center, the southernmost building of the three Lockwood mills. The building has 67 occupied housing units on upper floors and several other entities throughout the building, including MaineGeneral Health, Cianbro Corp., Hathaway Mill Antiques and Dirigo Labs.
The wing of the 6 Water St. building that runs parallel to Water Street is scheduled to be redeveloped as part of a second phase. A further phase also will include redeveloping 8 Water St., the building between the two others.
The three 19th-century buildings, called the Lockwood-Duchess Mill complex, were designed by mill complex architect Amos Lockwood. North River bought the buildings at 6 and 8 Water St. in 2019 for $1.5 million from Paul Boghossian, who developed the Hathaway Creative Center and bought the center from him in 2017 for $20 million.
North River, a privately held real estate investment and management firm based in New York City, also owns the Fort Andross Mill in Brunswick and mills in Portland, Boston and New York.
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A vehicle on Front Street, right, passes a property Dec. 12 where housing units are planned in Waterville. The vehicle at left is shown on Temple Street where it intersects with Front Street. Rich Abrahamson/Morning Sentinel
HEAD OF FALLS VILLAGE
Work is expected to start within the next 30 days to demolish buildings at the corner of Front and Temple streets to make way for developing 63 housing units in two buildings, developer Todd Alexander of Renewal Housing Associates LLC/Leon N. Weiner & Associates Inc. of Portland, said.
The estimated $35 million-$40 million Head of Falls Village project will be completed in phases, with the first to include building demolition and completing environmental remediation work, Alexander said. The phases are tied to specific components of the work and how the overall development will be funded, he said.
Changes in the project's funding terms delayed demolition and environmental work, Alexander said. Demolition work will likely be completed by early spring, depending on weather. He is developing the project with Northland Enterprises Inc., a real estate development and management company also based in Portland.
The Waterville Planning Board approved a site plan for the project in late July of 2023, and the developers bought the properties, totaling about 1.7 acres, four months later.
The vacant buildings on the site formerly housed Universal Bread, Damon's Beverage & Redemption, the former Bob-In restaurant and lounge, Creative Sounds & Video Systems and a former office building known as the Heath House at 60 Front St. that abuts Appleton Street.
Plans call for a new 33,800-square-foot building facing Temple Street with about 15,000 square feet of office space on the first and second floors and 18 rental apartments on upper floors, funded partially by MaineHousing. They would be regulated under a program that limits occupancy to residents with household incomes at or less than 80% of the Kennebec County median income level.
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The 45 units off Front Street would be offered at the market rate.
The cost to rent workforce housing depends on income. A one-bedroom unit would rent for about $1,285 a month and a two-bedroom unit about $1,445, Alexander said.
The 49,400-square-foot building facing Front Street would have about 6,600 square feet of retail space on the ground floor and 45 apartments on upper floors, with about 90 on-site parking spaces. A two-way drive between the buildings would connect Temple and Appleton streets and double as a space for cultural events, farm markets, pop-up cafes and the like, and a place to socialize. Both private and public money is needed for the project and developers applied for funding under the Renewal Affordable Housing Program through Maine Housing Authority, a program intended to provide funding for workforce and affordable housing.
The project received a grant of almost $200,000 from the Maine Department of Economic and Community Development's Community Development Block Grant program to help with demolition and remediation.
Josh Benthien, CEO of Northland Enterprises, is working on the commercial, office and retail aspect of the project, while Alexander focuses on housing.
The second phase, after demolition and soil remediation, includes infrastructure improvements, Alexander said. Existing utilities will be removed replaced with new water, sewer, stormwater, gas, electric and sata-phone systems to service the new buildings, he said.
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Site improvements include new sidewalks, parking areas, access drives and a pedestrian plaza.
Last spring, the developers applied to the Economic Development Administration for a grant under the Recompete Phase II program to help offset the cost of the public improvements Alexander said, but the project was not awarded funding in the 2024 application round. But he said it remains on a short list of eligible projects for funding in future rounds.
"We are currently considering other potential funding sources," Alexander said in an email. "We would like to begin this phase after the demolition work is completed next spring, but it is dependent on available funds."
The third phase would be constructing the building facing Temple Street and the fourth phase, construction of the building facing Front Street, he said. Depending on financing, the buildings could be built simultaneously, he said.
"Construction on the two buildings proposed for the site are slated to begin at the tail end of the infrastructure improvements," he said. "We've made good progress on the financing for these development projects."
Alexander said construction cost inflation and a higher interest rate environment have affected this project as they have many others, and he and his partners don't think that will change materially in the near future.
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"The challenge is more acute in markets like Waterville where there is a significant and growing gap between development costs and the financing that rents can support," he said. Such conditions are typical for mission-drive revitalization projects like Head of Falls Village.
"The good news is that we own the property, the first phase will begin soon, and our partners are committed to carrying out the long-term redevelopment plan," he said. "So, we will keep moving forward patiently to ensure that we can implement the vision laid out in our plan and complete each phase in a financially responsible way."
Housing are planned at 52 King St. in Waterville, shown Dec. 12. Rich Abrahamson/Morning Sentinel
KING STREET COMPLEX
The estimated $12 million, 37-unit King Street complex will be workforce housing, with rental costs based on median income in the community. KVCAP initially filed plans for the complex through the Waterville Planning Board last year before approving the project in January.
The 49,500-square-foot building will be located across King Street from the KVCAP parking lot, on land that was the site of the South End Arena ice skating rink. The rectangular building will have access from King and Gold streets. The project encompasses 52 and 54 King St. and 24 and 26 Gold St.
KVCAP has renovated several single-family homes in Waterville in recent years to resell at affordable prices. Other recent KVCAP housing projects include the construction of 40 workforce apartments in Skowhegan and six condominiums in Augusta.
Recently completed housing is shown Dec. 12 at Manor Gardens Townhouse Apartments at 54 College Ave. in Waterville. Rich Abrahamson/Morning Sentinel
MANOR GARDENS
Joie Curran of Arcon Realty, which developed Manor Gardens on College Avenue, said the townhouse-style complex with 20 units is nearly complete after a lot of hard work over the last few years. The project includes nine buildings -- seven completed duplexes and two triplexes that are expected to be completed in February or March.
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Curran, her father Arthur Turmelle and their family own Arcon. For 40 years they have owned, redeveloped and operated dozens of rental properties in the city's North End. Curran said the family's mission is to provide high-quality, safe and modern housing.
The complex on the site of the former John Martin's Manor has a mix of one-and-two bedroom units.
"It's been a labor of love for sure but we are pretty proud of the final product," Curran said in an email. "We have a wonderful group of residents at Manor Gardens right now, truly excellent folks who are hard-working, friendly, and respectful."
OTHER PROPOSED PROJECTS
The DePre family plans to build up to 21 apartments in their buildings at 155 and 165 Main St. downtown; the Nale family plans to develop six apartments on the second floors of 103-109 Main St; and John Jabar Jr. has presented a proposal to the Planning Board for housing units on Washington Street.
Another major housing project planned for the former Seton Hospital at 30 Chase Ave. was turned down for funding earlier this year by MaineHousing, developer Kevin Mattson said. The 67-unit affordable project was determined by that agency not to be suitable for housing, he said.
"While we strongly disagree with that decision, it is the agency's exclusive decision to make and we accepted the results," Mattson, a partner in Dirigo Capital Advisors of Topsham, said Tuesday.
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The Planning Board approved the plans for the project in 2022. Mattson said it is unfortunate it took years from the time he applied to Maine Housing for the application to be rejected. The slow movement imperiled the project and limited other potential avenues for creating additional housing, he said. But MaineHousing is a singular force in helping deliver affordable housing, he said, and he can't imagine the landscape without MaineHousing's hard work and tireless innovation.
Developing new and rehabilitated housing is difficult as prices for building materials and labor remain high and interest rates are more than double what they were just a few years ago, according to Mattson. Supply is not keeping up with demand, prices for single-family houses continue to remain high and out of reach for many people and apartments and rentals are expensive, he said.
"In order to facilitate the delivery of new units of housing, something has to give, and given our inability to control macroeconomic forces like interest rates and supply costs, we are left with limited tools in the tool box," Mattson said. "The math is very straightforward: to produce more housing inventory at an affordable price and offset costs, new subsidies must be created at the state and federal level."
Nevertheless, he is hopeful he can still develop housing at the former Seton Hospital. In Kennebec County, he said, there are a lot of effective and engaged elected officials and staff who are key players in helping move projects forward.
"We continue to work with our partners in Waterville, such as the Mid-Maine Chamber (of Commerce) who are tireless in their efforts to move development forward to the region. We remain hopeful that where there a will there is a way, but without additional economic incentives, the math doesn't work for many projects."
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