Deal 95% done for film studio at South Portland armory

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SOUTH PORTLAND — The city could soon be the landlord for a film- and video-production studio.

Officials have been negotiating a lease with a small group of film-industry investors led by Cape Elizabeth resident Eric Matheson who want to establish a sound stage in the former National Guard Armory on Broadway, at the foot of the Casco Bay Bridge.

While declining to discuss details of the on-going negotiations, City Manager Jim Gailey said the talks appear to be near completion.

“We’re at mile 95,” Gailey said, when asked to compare the process to a 100-mile race.

Matheson, a film industry technician, said there seems to be broad support on the City Council, but the “nuts and bolts” of the contract need tightening.

The council has discussed the fate of the armory property several times in the last year. The building has largely been dormant, used only for cold storage, since the city bought it in U.S. Bankruptcy Court for $650,000 in 2006.

Since then, residents have periodically criticized councilors for buying the nearly three-acre property without public input and without an intended use. The city has invested little money in the building, which is crumbling from years of neglect.

Councilors have already met behind closed doors four times to discuss specific proposals for converting the armory into a film studio and established a conditional zone to allow that use.

Parties involved in the talks indicated that the current proposal would lease the building to Matheson’s group, which would have an option or ability to purchase the property outright from the city. 

Although an armory reuse committee has recommended converting the building into a new City Hall, council interest in the sound stage was piqued last summer when proposed by Matheson, a film-industry technician with 40 years of experience.

Matheson has 84 film technical credits, including “Empire Falls,” “Ironweed,” “Crocodile Dundee II” and “Cider House Rules.”

Mayor Tom Coward said he has removed himself from the negotiations, since discovering one of the potential investors is one of his real estate clients.

“I didn’t want to muddy the waters,” he said.

Councilor Jim Hughes said councilors are in agreement about establishing a sound stage in the Armory, but still need to iron out a few contractual details.

Hughes compared the progress to a lease in which a resident accepts the major provisions, while having concerns about relatively minor issues like snow removal.

“I think we’re getting close,” Hughes said. “I wouldn’t say any (remaining issue) is a deal-breaker, but no one has agreed to a deal yet.”

The council met in a closed session Monday night to discuss the latest lease offer drafted by city staff.

Although nothing has been finalized, Matheson has said publicly that he would allow the police and fire departments to continue to use one set of garage bays for storing and servicing emergency equipment.

Matheson has said the Armory is ideal for a sound stage because the exposed iron beams in the drill hall could support automated light trusses and its wooden floor would allow workers to move stage props easily and quietly. A kitchen area would be ideal for production of cooking shows, he said.

In addition to building a sound stage in the 10,000-square-foot drill hall, Matheson has said he would like to renovate 12,000 square feet of office space and offer it to film-related professions.

Matheson said on Wednesday that he had just received a copy of the city’s most recent offer and it is being reviewed by his lawyer and potential investors.

The group is ultimately looking for a simple, streamlined process for purchasing the building that doesn’t threaten the viability of the business, he said.

“It remains to be seen whether (the current draft) is acceptable,” Matheson said. “An outright sale would be best, but we have yet to see any numbers on that other than our own.”

Councilor Tom Blake predicted the council could have some sort of agreement by July 1.

Randy Billings can be reached at 781-3661 ext. 100 or [email protected]

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The city is nearing an end to negotiations with a group of investors wanting to establish a sound stage for films, TV shows and commercials in the former National Guard Armory in South Portland, pictured here in October 2008.