January 18, 2013

Developer closes $2.5M deal for Augusta hospital property

MaineGeneral will rent Augusta campus for $1 million until moving in to new regional hospital; new owner expects 5-7 year redevelopment process

By Betty Adams badams@centralmaine.com
Staff Writer

AUGUSTA -- The hospital is now a tenant in the building it used to own.

click image to enlarge

This Oct. 24, 2012 photo taken from Memorial Bridge shows the MaineGeneral Medical hospital in Augusta.

Staff file photo by Joe Phelan

click image to enlarge

Kevin Mattson

Staff file photo by Andy Molloy

Kevin Mattson, head of Augusta East Redevelopment Corp., closed a $2.5 million deal Friday to buy MaineGeneral Medical Center's East Chestnut Street building.

"We got it done today and it's ours," Mattson said Friday just hours after the deal was completed. "It's the hub of that whole east side redevelopment opportunity if it's done correctly."

Mattson, the developer responsible for converting a former computer manufacturing site with a 317,000-square-foot building into the office park known as the Central Maine Commerce Center, will now turn his attention to a property that spans more than 19 acres, and includes the seven-story hospital, parking lots, three houses and a building that once housed Augusta General School of Nursing.

Some of the property borders the Kennebec River and the campus of the former Augusta Mental Health Institute. The hospital has been on East Chestnut Street for more than a century.

MaineGeneral Medical Center will pay rent to Mattson until the opening of its new $312 million, 192-bed hospital near Interstate 95. The new regional hospital in north Augusta is designed to combine in-patient functions of its Augusta site as well as the hospital at the Thayer campus in Waterville.

The building construction there has moved along at a rapid pace, and a new opening date is now scheduled for November. Originally, the opening was forecast for summer 2014 and most recently had been pegged for December.

Mattson said he anticipated spending five to seven years working on redeveloping the property and intends to work closely with the city and with neighbors. Eastside redevelopment has been talked about by city officials for years.

"This is a huge property that will eventually return to the tax rolls, generating revenue for the city of Augusta," Mattson said. "We have a lot of experience with large, difficult projects like this, so we're looking forward to tackling the challenge."

The hospital will pay $1 million annually in rent to Mattson.

Augusta East Redevelopment Corp. is a subsidiary of Mattson Development, which is Mattson's commercial real estate development company. Details are to be posted www.AugustaEast.com.

City Manager William Bridgeo said Friday he was pleased to hear from Mattson that the deal had been completed.

"I had been a little nervous that it wouldn't and the city would be left contending with a uniquely challenging building in heart of downtown," he said. "Kevin Mattson, his partners and Bill Dowling, his CEO, have done an absolutely terrific job in Augusta with all the properties they've tackled. They do high quality work, they're tremendously responsible as corporate citizens, and we already have a long track record of working collaboratively with them."

He said Mattson is talking to city officials about a possible tax increment financing deal in connection with the redevelopment. Such deals involve tax breaks for a set period of time to encourage economic development.

Betty Adams -- 621-5631

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