Housing authority also seeks rezoning on Huntress Avenue

SOUTH PORTLAND — For nearly three years, a vacant, four-story brick office building on Waterman Drive has been one of the most visible symbols in the city of the 2008 collapse of the financial and real estate markets.

But now it appears the drought may be over, at least for this project.

Over the last month or so, Andrew Ingalls, a commercial real estate broker at CBRE-The Boulos Co., has sold the top two floors of 100 Waterman and has the first floor under contract.

Ken Bowden, chief executive officer of First Atlantic Corp., said his company has purchased the third and fourth floors. And the South Portland Housing Authority is about to close on the acquisition of the first floor, said attorney Gary Vogel, who represents the SPHA.

Erik Carson, the assistant city manager and economic development director, said he expects the businesses and their employees to help rejuvenate the Knightville district, which has suffered since the demise of the Million Dollar Bridge.

“I think it’s going to be a great addition to the neighborhood and to the downtown of the city,” Carson said. “As this gets filled out, it’s going to help create a critical mass, which will enable service and retail businesses to want to be close to them as well.”

The entire 32,000-square-foot building, owned by Reed Hart Inc., was on the market for about $5.5 million. But Ingalls said that asking price was too high when the real estate market crashed.

“Our timing was clearly poor,” said Ingalls, who guided the project through the development process. “We didn’t know there was a global recession bearing down on us.”

Bowden said First Atlantic, a medical services company, plans to use the fourth floor for its corporate offices, which are now on St. John Street in Portland. It will also occupy a portion of the third floor and lease the rest to a tenant.

Bowden said the company employs 1,700 people statewide.

“It really meets all of our needs,” he said. “We didn’t see the move into South Portland as moving away from the business district. We, in fact, see it as where the business district is potentially headed over the next few years.”

Bowden said the company was impressed as much with the amenities, including restaurants, grocery stores and auto services, in Knightville neighborhood as it was with the energy-efficient building.

SPHA Executive Director Michael Hulsey did not return calls seekin comment about his agency’s plan.

But the SPHA, which manages 650 housing units throughout the city – including Mill Cove Apartments, Ridgeland Estates and the Betsy Ross House – has been planning to move its administrative operations out of Landry Circle so it can convert those offices into more housing.

The SPHA is also going before the Planning Board May 24 to request rezoning of a 4.3-acre vacant parcel on Huntress Avenue.

The change from Residential A to a G-2 Contract Residential District would increase the number of units per acre from four to 15, but would focus those units on elderly and handicapped living.

Ingalls, meanwhile, said he hopes the activity at 100 Waterman is an indication that the icy commercial real estate market is beginning to thaw.

“It’s a good economic indicator that these properties are selling,” he said.

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

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