Developers seek maximum extension of permits for proposed East End condo project in Portland

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PORTLAND — A Massachusetts development company is asking the city to extend its special zoning and site plan approvals for a mixed-used condominium complex on the former Village Cafe property.

The company, Village at Oceangate, is seeking extensions that would allow it to build a five-story, 176-unit condominium complex at Newbury and Hancock streets with space for a 150- to 200-seat restaurant and sidewalk-level commercial space.

Village at Oceangate principal Demetri Dasco said only the first phase of the Bay House development, consisting of 82 units, has received site plan approval from the city. Two, four-story buildings would be built on top of a single-story parking garage, he said.

The site plans are set to expire in June, but the company has asked the city to extend the plans and the contract zone to Sept. 22, 2012, the maximum allowed.

The requests will be considered by the Planning Board on May 24. Although the board will rule on the site plan extension, it will only made a recommendation about the contract zone to the City Council.

Village at Oceangate said in a letter to the city that the project has been delayed because the collapse of financial markets in 2008.

“During this period the banks had no appetite for ground up residential construction projects of this nature,” the company said.

“We will continue to invest in Portland,” the company added. “However, the potential for significant additional investment … relies on the extension of our permits and approvals.”

But neighborhood residents are wary, even if it means killing the project.

Allison Brown is president of the India Street Neighborhood Association, which formed last year partly in response to neglected commercial and residential properties between Munjoy Hill and the Old Port.

Brown lives across the street from the project property, which is bordered by Hancock, Middle and Newbury streets. She said many residents, including herself, are planning to oppose the extensions.

“The consensus on the (neighborhood association) board, though it is not 100 percent, is that we are going to be extremely critical of them getting an extension,” she said.

Brown said the now-vacant lot has been used as a virtual dump – for everything from snow, to trash to furniture – and the chain-link fence around it has fallen into disrepair.

Hugh Nazor, the association’s treasurer, said he filed a complaint with the city’s code enforcement office three weeks ago about the condition of the lot.

Although the property has since been cleared, Nazor said he is not convinced it was in response to his  complaint or others, but rather reflects the timing of the company’s request that the city extend its approvals.

“Of course, (spring is) a good time of the year to do it,” he said. “So, perhaps I’m being too cynical.”

Dasco said he understands the neighbors concerns about the condition of the property.

“We have heard those concerns,” he said. “We are 100 percent determined to make a positive impact on the neighborhood by doing a better job to keep this site clean.”

Dasco said his company is committed to the project, noting it has maintained an office on Market Street with a model unit on display. 

Dasco noted that the project, with a first phase estimated to cost $30 million, also includes public infrastructure improvements, including a traffic study, India-Middle street traffic improvements and a $200,000 payment to the city to extend Hancock Street between Middle and Commercial streets.

“We’re still excited,” he said. “A lot of projects have come and gone, but we have maintained our commitment to the project.”

Dasco said the Bay House project continues to generate interest from five to 10 prospective buyers a week. And the company said in a letter it’s “starting to generate traction with regard to financing.”

According to the Bay House website, the company plans to break ground this summer on the “new metropolitan-style condominiums in a historic waterside neighborhood.”

Prices range from $170,000 for a studio to $550,000 for a three-bedroom condo.

Dasco said he feels as though the financial markets are beginning to thaw.

“It is frustrating to have a project that has a lot of market demand and the financial markets have collapsed,” he said. “(But) we remain very bullish about Portland.”

But Nazor and Brown are not as optimistic.

They said they feel the project will never get under way. Both expressed concerns about the size of the project and said they would prefer a smaller development that better fits the fabric of the neighborhood.

Brown said the neighborhood association will meet on Thursday at 5:30 p.m. on the second floor of Micucci’s on Market Street. She hopes to energize residents to speak at the May 24 Planning Board meeting.

“Personally, I feel they have been a bad neighbor,” Brown said. “They haven’t really done anything other than treat it like a dump.”

Randy Billings can be reached at 781-3661 ext. 100 or rbillings@theforecaster.net. Follow him on Twitter: @randybillings.

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