SOUTH PORTLAND — Knightville businesses are getting aggressive and creative in the face of an economic slump that’s leaving empty storefronts and vacant apartments in the downtown business district.
How about a chance to win a new car for buying a residential condo? Near basement prices for first-class office space with a long view of the Fore River?
Too expensive? How about blue-plate specials at a local organic restaurant?
Those are just some of the strategies being pursued to encourage people to stop pinching pennies and ignore the gloom and doom.
Developers and commercial brokers say they are more willing than ever to negotiate with prospective buyers. Couple that will exceptionally low interest rates and they say now is the time to buy.
Paul Leddy, of Leddy Houser Associates, said construction is continuing at Mill Cove Landing, a mixed-use development on Ocean Street with retail and office space on the ground floor and 27 residential condominiums on the second and third floors.
“Despite the rumors, this project is still strong and viable,” Leddy said. “And we’re in good spirits.”
Leddy said his company will be offering a free Mini Cooper as an incentive for people to buy condos. Although details haven’t been finalized, Leddy said the first 10 or 15 people to purchase a condo would be eligible for the drawing.
“We will get as creative and aggressive as we have to with anyone who wants to get involved with a purchase or a lease, whether it’s residential or retail,” Leddy said.
Leddy said Mill Cove Landing recently sold its first condo for $675,000. He said the company will offer to fully furnish the next three condo sales with pieces from Cabot House Furniture. Additionally, the company will be offering furnished executive suites, which would be offered to those summering in the area.
Meanwhile, Andrew Ingalls, of Ingalls Commercial Brokerage, said people are beginning to show interest in 100 Waterman Drive, a four-story business condominium that will be owner-occupied. He said there have been six showings in recent weeks, which is more than he had in the final months of 2008.
“One hundred Waterman Drive came online in September; I don’t think the timing could have been worse,” Ingalls said. “Fortunately we can be a little more aggressive.”
Both Ingalls and Leddy said they hope the optimism that swelled on Tuesday when President Barack Obama was sworn in will be the catalyst needed to shake sleepy shoppers from their slumber.
“The problem is always consumer confidence,” Ingalls said. “The optimism coming out of that (inauguration) can’t do a bit of harm.”
Until then, however, Ingalls said he must aggressively negotiate with prospective tenants, many of whom are dissuaded not by the building itself, but by the incidental costs moving, which can further strain the bottom line.
While small businesses around the country are still having trouble getting credit from large national banks, both Leddy and Ingalls said smaller banks in Maine have given them the flexibility they need to make it through this tough time.
They said they are benefiting from low construction interest rates that have essentially been cut in half since last fall. Ingalls said the low cost of borrowing should allow him to carry 100 Waterman Drive through 2009, if absolutely necessary.
“That’s the only silver lining,” he said.
The question is whether other businesses in the waterfront community can wait that long.
Sue Ellen Whitmore, general manager of Fresh on Ocean Street, said the restaurant had a very strong summer, but many people, including regular customers, simply stopped coming out to eat in the fall when gas and home heating oil prices were at all-time highs.
Then, companies began cancelling holiday parties.
While business has picked up in January, Whitmore said the restaurant is looking forward to having tenants move into both 100 Waterman Drive and Mill Cove Landing.
“We’re hoping there’s a chain reaction” in economic activity, she said.
Until then, the restaurant is planning on using a combination of blue-plate specials for college students, special events like Sunday jazz brunches and other community-building events to make it through what she hopes will be a short economic slowdown.
For Thanksgiving, the restaurant hosted a potluck dinner for struggling families. While the company didn’t make a monetary profit, per se, Whitmore said the restaurant is benefiting from the community’s good will and word-of-mouth advertising.
“We’re hoping word of mouth carries us through,” she said.
A little further down Ocean Street, meanwhile, Emma D’s restaurant was not so lucky. The breakfast and lunch spot near the Legion Square rotary is dark and a for-sale sign hangs in the window – one of about a dozen commercial buildings for sale in Knightville.
Bob O’Brien, president of the Waterfront Market Association, said he believes the area has been near a tipping point for some time. He said the area’s success hinges on whether the now-vacant stores, offices and apartments will infuse the neighborhood with the foot traffic needed to support its small businesses, which range from hair studios to consignment shops to restaurants.
“We’re getting close to that tipping point,” O’Brien said. “What that area needs is a little more density. When those condos are occupied, it will bring people to the area.”
O’Brien said that in the past, the association has tried to put Knightville on the map with large seasonal events. The group recently help organize the Holiday Festival and, last fall, helped sponsor a Harvest Fest, which was previously an event held by local Realtor Brian Linscott. Then in summer, of course, there’s Art in the Park.
South Portland-Cape Elizabeth Community Chamber President Tom Noyce said that more and more small businesses are turning to the chamber’s networking events, both for business opportunities and ideas on how to make it through.
“People are realizing they need to get out, meet new people and make new connections,” he said.
Randy Billings can be reached at 781-3661 ext. 100 or email@example.com.
A lack of demand for residential condos has stalled sales at Mill Cove Landing in South Portland, left, but developers say the Ocean Street project remains viable.
The former Emma D’s at Ocean and E streets is one of the properties up for sale in Knightville.