PORTLAND — As city councilors prepare to vote on selling land to South Portland-based WEX, a South Portland official said the company’s move will benefit the entire region.
“They are planting a firm flagpole in the Portland area,” Josh Reny, South Portland assistant city manager and economic development director, said Aug. 4.
WEX, which provides payment processing services and technical support for businesses, and developer Jonathan Cohen are poised to buy a portion of the Thames Street parking lot across from the Ocean Gateway Terminal for $3.3 million. The land will be used for a new headquarters building.
The sale price is $800,000 more than WEX and Cohen bid in a May in response to a city request for proposals. It was one of two bids received by the for the 1.1-acre property.
Approval of the sale does not require first and second readings, but will be open to public comment. Construction will also require site plan approval from the Planning Board.
WEX plans to shift 450 employees from the company’s present headquarters at 22 Gorham Road in South Portland, near the Maine Mall.
The Portland City Council Economic Development Committee unanimously recommended the full council approve the sale when it met Aug. 1. The agreement requires the deal to be closed by Oct. 1 if councilors approve the sale.
Cohen, of Hancock Street LLC, is working with WEX to develop what is anticipated to be a 100,000-square-foot complex in four stories at the corner of Thames and Hancock streets. The building would also include 10,000 square feet for retail businesses.
Cohen estimated the building could be occupied by April 2019. A letter from WEX Chief Executive Melissa Smith said the company is ready to sign a 15-year lease on 80,000 square feet of office space in the new building.
WEX was founded in 1983 as Wright Express. It is a publicly traded company that has a global presence.
On Tuesday, Economic Development Director Greg Mitchell said he expects WEX will actually occupy 90,000 square feet of the building, which will be across the street from a Marriott hotel now under construction.
City officials and Cohen estimated the development could add more than $300,000 in tax revenue to the city, based on last year’s rate of $21.11 per $1,000 of assessed value. The development could also lead to 400 construction jobs.
As part of the deal, developers must provide 180 parking spaces to replace the ones in the Thames Street lot, including 53 used for city vehicles. Mitchell said most of the city spots are used for police vehicles.
Cohen’s proposal said the nearby Ocean Gateway garage and a lot at 100 Fore St. will be used for parking, and will also accommodate at least 320 spaces for WEX staff. Cohen also owns the 100 Fore St. lot in front of Hamilton Marine, and his proposal noted it could be used for a parking garage with as many as 1,750 spaces.
The proposed agreement also calls for providing between 450 and 550 surface and garage parking spaces within a 750-foot radius of the new building for employee and public use.
Mitchell said the remainder of the Thames Street lot could also be graded and accommodate some parking lost to redevelopment.
With those plans, Reny said he is not convinced WEX will completely move from South Portland, and added the current market for commercial space could mean the offices on Gorham Road would be quickly filled.
“I’m not really worried, there is some prime professional office space down there. The region is in good shape right now,” he said.
An aerial rendering shows how WEX would fit into Portland’s waterfront at Thames and Hancock streets. The City Council will vote Aug. 21 on selling land for the South Portland company’s new headquarters.