Portland officials have settled on a developer to buy 3.5 acres of former railroad land in Bayside and build an $18 million parking garage to revitalize the downtown neighborhood further.
Atlantic Redevelopment Co., which has built several Bayside properties, has offered $3 million for the city-owned land, which runs along Somerset Street between Pearl and Elm streets.
The pending sale is part of the city's plan to move its public works garages and two scrap-metal recycling companies from Bayside to land it bought last year on Riverside Street.
Atlantic would build a 700-space parking garage, an 80,000-square-foot office building and a 64-unit apartment or condominium building, said Lee Urban, Portland's director of planning and development.
Construction would start within two years. Each building would include street-level retail space. Atlantic may build two additional office buildings in the future.
Six companies made offers on the Somerset Street property, Urban said.
Atlantic, headed by Theodore West of Cape Elizabeth, offered the best and most complete proposal, city officials said. They said purchase offers in the other proposals are confidential.
The city already has designed and planned the garage.
CBRE/The Boulos Co. of Portland started marketing the property last year, when the firm outbid other brokers interested in the city project. The negotiations that followed were not public.
The City Council's community development committee will take a final vote at 7:30 p.m. Tuesday in Room 209 of City Hall on whether to recommend Atlantic's proposal to the full council.
The council is expected to vote June 18 on Atlantic's proposal. The council's approval would authorize city officials to negotiate a sale agreement with Atlantic and apply for a $9 million federal urban development grant to help build the parking garage.
Federal money to spur Bayside's redevelopment has been available since 2000, when Portland officials tried to attract Idexx Laboratories Inc., now in Westbrook, to the neighborhood.
The city has no recent appraisal of the Somerset Street land, said City Councilor James Cloutier, chairman of the three-member community development committee. Half of the property, located behind Wild Oats Market, is best known as a municipal snow dump.
The city acquired the former railroad land two years ago in a land swap with the Maine Department of Transportation. At the time, city officials said it was appraised at $4.5 million.
Cloutier said Atlantic's $3 million offer is a good deal for the city because West's future investment could exceed $60 million, taking into account the garage and planned office, residential and retail space. The city hoped to get at least $2.5 million.
West and his associate, James Hanley, have a good track record working with Portland officials and developing Bayside land, Urban said.
They built the AAA Building a few years ago on former city land at Marginal Way and Preble Street Extension. They built the Gorham Savings Bank/AAA office building last year at Marginal Way and Hanover Street, which included some city land. They also are building the Intermed Building on former city land at Marginal Way and Preble Street Extension.
''They're men of their word,'' Urban said. ''If Ted says he's going to do something, it's going to get done.''
Atlantic representatives could not be reached for comment.
The $3 million from Atlantic would go to The Trust for Public Land, which financed the city's $5 million purchase of the 53-acre Lucas Tree Experts property at 636 Riverside St. The wooded parcel runs along the Presumpscot River and is in an industrial area near Exit 48 of the Maine Turnpike.
In return for the trust's financial backing, the city must maintain 20 acres of the Riverside land as open space and Atlantic must create a recreational path through the Bayside land.
Thirty acres of the Riverside site are the future home of Portland's Public Works Department, which occupies four crowded acres on Hanover and Parris streets in Bayside. The city eventually plans to sell the department's current location for private development.
New England Metal Recycling, a scrap yard at Somerset and Pearl streets, has agreed to buy 13 acres of the Riverside land for $1.3 million and is expected to move there as early as this fall.
In return, the city will use federal grants and loans to pay New England Metal $645,000 for its 1-acre Bayside property and $1 million for the move to Riverside, Urban said.
The city had planned to build the parking garage on the New England Metal site, but Atlantic wants to build the garage on the section of the former railroad land closer to Elm Street, Urban said. Atlantic would own and operate the garage, which would be open 24 hours daily for commercial and residential users.
Portland officials remain hopeful that the other Bayside scrap yard, E. Perry Iron & Metal, will move to Riverside, too. The city has offered the company as much as $1.8 million for its 2-acre property and relocation costs. So far, the company has refused.
''We still have room out there if they want to come,'' Cloutier said.
A 2000 report called the scrap yards ''the single most inhibiting factor to the successful redevelopment of Bayside.''
Despite their delayed departure, the neighborhood has attracted more than $100 million in commercial and residential projects in recent year. They include a $20 million Whole Foods Market complex that opened in February between Pearl Street and Franklin Arterial and the $27 million Pearl Place, a 115-unit, mixed-income apartment complex is under construction at Pearl and Oxford streets.
The $1.3 million that New England Metal will pay for Riverside land and the $1 million that Atlantic paid for the Intermed site on Marginal Way will help repay the city's $5 million loan, including interest, from The Trust for Public Land, Urban said.
