Why plan for growth and change, when it seems so much easier to simply react? When there is a distinct and shared vision for your community - when residents, businesses and local government anticipate a sustainable town with cohesive and thriving neighborhoods - you have the power to conserve your beautiful natural spaces, enhance your existing downtown or Main Street, enable rural areas to be productive and prosperous, and save money through efficient use of existing infrastructure. This is the dollars and sense of smart growth. Success is clearly visible in Maine, from the creation of a community-built senior housing complex and health center in Fort Fairfield to conservation easements creating Forever Farms to Rockland's revitalized downtown. Communities have options. We have the power to manage our own responses to growth and change. After all, “Planning is a process of choosing among those many options. If we do not choose to plan, then we choose to have others plan for us.” - Richard I. Winwood And in the end, this means that our children and their children will choose to make Maine home and our economy will provide the opportunities to do so. The Summit offers you a wonderful opportunity to be a part of the transformative change in Maine that we’ve seen these gatherings produce. We encourage you to consider the value of being actively involved in growing Maine’s economy and protecting the reasons we choose to live here.

1. GrowSmart Maine:
Leveraging Private Sector Investments and Public Funds to
Support Smart Growth
2007 – Sanford Mill 2nd floor 2013 – Sanford Mill 2nd floor

2. Presentation Goals:
1. Sanford Mill case study
2. Discuss how public funds can attract private investment to
otherwise unfeasible Smart Growth projects.

3. Private Investment: Key Question:
Ratio of Risk Vs. Quantifiable Return

4. Credit Tenant Retail Development:
Risks:
Tenant credit
Lease negotiations
Interest rate fluctuations
Sources:
Debt:
Local bank/CMBS
Predictable & Competitive
Equity:
Ample investors, low return
requirements due to low risk

5. Large Scale Historic Redevelopment:
Risks:
Municipal and financings approvals
Market demand
Construction costs
Remediation costs
Contingency
High up front investment prior to close
Tenants: Pre-leasing very difficult
Interest rate fluctuations: impossible to lock
Ability to close funding gaps
Sources:
Debt: Bank with vision & appetite for risk = Small pool
Equity: High risk, & long wait for ROI = Small pool
Other: Brownfields Loans/Grants
Housing Funds (LIHTC/Grants)
Historic Tax Credits (Federal & State)
Other State and federal grant and loan funds
TIF financing

6. Sanford Mill Quick History
 Goodall textile mills constructed between 1882 and 1925.
 Our mill, known as Mill #1, was built in 1915.
 Woolen mills closed in 1955 leading to a period of makeshift users and
renovations. Environmental issues, functional obsolescence and high operating
costs and a soft rental market served as barriers to redevelopment.

7. Sanford Mill Development Timeline:
 2007/2008: City of Sanford and Northland Enterprises signed a development agreement;
 2008: City declared a slum and blight district and took the 66,000SF Mill #1 by eminent domain;
 2009: City utilized SMPDC and EPA funds to complete environmental clean up of the Mill;
 2010: Northland continued to work on development scenarios/courting tenants and trying to close funding gap;
 2011: December: Northland purchased the building from the City via seller financing. Riverfront Community
Bond money was utilized to complete roof replacement;
 2012: November: $11.5 MM renovation began with one 4,400 SF commercial lease signed;
 2013: August: Construction complete on 36 Mixed-income units and 22,000sf of commercial space. There was a
200 person waitlist for the apartments and a second commercial lease was signed during construction;
 2014: As of November, all commercial space is projected to be leased, and the apartments have no on-going
vacancy.

8. Sources and Uses imbalance:
 As complete appraised value: $2.3milion
 Total development cost: $11.5million
 How does a private developer afford to pay $11.5 mm to develop
something that will be “worth” 2.3mm?

9. The Solution to the Sanford Sources & Uses imbalance:
After the $400,000 in EPA Brownfield money used for clean-up under City ownership:
Source Amount Private/ Public
Bangor 1st position debt $980,000 Private
SMPDC 2nd position debt $1,005,000 Public (Brownfield’s RLF)
Bangor TIF Loan $514,000 Public & Private
Riverfront Grant (DECD) $505,000 Public
Developer Contribution $892,000 Private
State Historic Equity $2,050,000 Public & Private
Federal Historic Equity $1,654,000 Public & Private
NSP III grant
$3,900,000 Public
(DECD/HUD)
$11,500,000

10. Keys to Sanford Mill project’s success:
 Teamwork
• City of Sanford
• EPA Brownfield funding
• SMPDC – Revolving Loan fund
• State of Maine DECD
• Visionary lender in Bangor Savings
 Patience
• 6 years from concept to construction completion. A long predevelopment phase presents
challenges to the Developer, the City, and the Construction team
 Creativity
• Creation of Slum & Blight district providing the option to use Eminent Domain
• Creation of Historic District to allow for Historic Tax Credits
• Brownfield’s grants during City’s ownership, and SMPDC loan during the Private ownership
• NSP III funding from DECD for housing units (mixed income requirements)
• Creation of the TIF district
• Zoning change

11. Other Obstacles to consider:
1. Market – Is there demand for this type of space?
2. Timing – Packaging multiple sources of funds (Private and Public) takes a lot of
time. How long will they “hold” the fund reservation?
3. Certainty of the path forward - Are the steps to gain municipal approvals clear
and unambiguous? Is the approval for public investment clear and defined?
4. Community support/education – These deals are magnets for critics and people
who like to second guess progress. Could they disrupt the approval process/
funding sources?

12. Lessons Learned: Keys to Success
1. Team mentality between the developer, municipality, lenders, investors,
public financing sources, construction professionals and tenants.
2. Open problem solving and understanding of each other’s perspective and
goals.
3. A local “quarterback”.

13. Josh Benthien – Partner
Josh@northlandus.com
207-780-0223