Redevelopment of former Konica Minolta building in Scarborough could be in jeopardy
SCARBOROUGH — A redevelopment project that would breathe new life into a vacant building on Route 1 could be in jeopardy.
Hardypond Construction owner Robert Gaudreau, who transformed the nearby former Humpty Dumpty Potato Chip building into Nonesuch River Plaza, said Wednesday he will back out of the project to redevelop the former Konica Minolta building at 71 U.S. Route 1 if he cannot get financial assistance from the town to lengthen a left turn lane on Route 1 and move the entrance of Science Park Drive.
Gaudreau said he was not aware of those requirements when he agreed to purchase the 60,000-square-foot building on 6.6 acres for an undisclosed amount.
As part of the rework, Gaudreau must eliminate an entrance from Route 1 and create access from Science Park Drive. The road changes are required to accommodate northbound traffic on Route 1 as it slows down before turning left onto Science Park.
Estimating the road improvement costs to be "well over $400,000," Gaudreau said he could not absorb that expense in addition to the money he must put into the building. He contends that the town is responsible for bearing the cost because it should not have allowed a 10-year-old addition to the building without requiring the road improvements at that time.
"Basically, what it comes down to is in 1998, when the last 20,000-square-foot addition was put on the building, the town engineers and designers looked the other way and let them keep going," Gaudreau said. "This was never in compliance with national standards; the town ignored it as a safety factor for years."
Gaudreau, who recently learned at least one other interested buyer had backed out of a deal for the property when the road issues came to light, said he's been talking to Town Manager Tom Hall and Scarborough Economic Development Corp. President Harvey Rosenfeld about the town's responsibility to rectify the problem.
"I'm in a very difficult situation," he said. "I'm trying on one hand to foster a good relationship with the town, but the project's not viable with that type of cost."
Though Gaudreau is continuing the Planning Board approval process to turn the building into business and medical offices, he said it "may be all for nothing."
"It hasn't been easy to deal with people who don't understand that this is not my problem; the town should never have allowed Konica to be approved," he said.
While he agreed the Konica Minolta redevelopment project is important, Hall said "it's in a different category from past tax increment financing arrangements" and would not generate enough tax value and job creation to make it worthwhile to offer financial incentives.
"(Gaudreau) and I have talked at least twice and I appreciate it does present a unique challenge to him," Hall said.
According to Scarborough tax records, the value of the land is nearly $854,000 and the building is valued at nearly $1.46 million, for a taxable value of more than $2.3 million. The property was last sold Dec. 12, 2005, for $4 million and is currently owned by GRI Scarborough, of Portland.
Rosenfeld said he, Gaudreau and the seller of the property will be meeting next week to "look at the numbers." Since the seller bought the property for considerably more than Gaudreau is paying for it, Rosenfeld said it might be difficult to come to any agreement to adjust the price or bear some of the road work cost.
Complicating the process, Rosenfeld said, is an economic climate which has banks tightening restrictions on borrowing.
Though he's not ruling out obtaining some sort of financial arrangement or "partnership with the town," Rosenfeld said it must be worthwhile for Scarborough and the developer.
"I'm hoping we can work something out to make this project work – it's a great project; one of the gateways to Scarborough," Rosenfeld said. "At the same time, we have to protect the town's interest and the taxpayers' interest, too."
Meanwhile, Gaudreau said he has a possible tenant interested in leasing space.
"Why I'm continuing (the Planning Board process) is I'm hopeful the town will come forward; otherwise they are going to be looking at a derelict building," Gaudreau said.
Peggy Roberts can be reached at 781-3661 ext. 125 or email@example.com.