PNC Bank divests more from receivership

Camden businessman Orne acquires Knox Mill buildings

By Lynda Clancy | Mar 01, 2011

Camden — The Knox Mill has officially been released from bank receivership with the purchase of several buildings by a Camden citizen.

The real estate closing took place Feb. 28 in Portland with the signature of Matt Orne, representing AHP Camden LLC, on the deed.

The property, referred to officially as buildings 3, 4 and 5 and sitting on approximately 4.5 acres of prime downtown Camden land, had sat on the market for more than two years with a price tag of $1.2 million. The final closing price was $595,000.

Once a woolen mill, then bank call center and regional corporate offices, the three buildings underwent a transformation from 19th century industrial use to commercial space equipped during the mid-1990s for telecommunications. They were part of the larger Knox Mill complex that extended up Mechanic and Washington streets.

Last fall, Building 6 of the Knox Mill, the 80,000 square-foot section of the mill that extends up Washington Street, was acquired by Kelm Acquisition LLC, real estate investors who are spearheaded by real estate developer Cathleen Moore of Massachusetts' North Shore region. Michael Nash, who heads Waterfall Investments LLC, is directing the renovation and sale of 26 condo units in that building.

The other smaller buildings of the Knox Mill Complex have been sold to several other buyers over the last few years, with the exception of the Knowlton Street Building at 51 Mechanic St., which was also a former mill that was renovated in the early 1990s for a Kodak Corporation digital image workshops, and subsequently scooped up by MBNA for corporate offices. It is under contract with a listing price of $800,000 and is expected to be sold next week to an undisclosed buyer. The last building remaining on the market is 48 Washington St., 5,325 square feet of office space, which was once a home. It is listed at $500,000.

Buildings 3, 4 and 5, as well as two auxiliary buildings, including the smokestack, represent the core of the old woolen mill. Today, it is 65 to 70 percent filled with small businesses and stores.

The space, said Orne, "has a lot going for it."

The Knox Mill

For more than 100 years, the Knox Woolen Mill was alive with the manufacturing of wool blankets, as well as uniforms for soldiers through various wars. In 1987, the last of the looms went quiet, followed by several years of vacancy before the credit bank MBNA arrived, reinvigorating the space with telephone lines and employees operating 24-hour call center.

MBNA also purchased homes in the neighborhood, ultimately creating for one decade a vibrant office complex, anchored by the call center and conference rooms. MBNA succeeded in securing a large piece of downtown Camden in industry, employing hundreds of workers, just as the Knox Woolen Mill had done for the previous 100 years.

After Bank of America, which acquired MBNA in 2004, began divesting of its Camden and Lincolnville real estate, much of it was acquired in 2005 by three Baltimore businessmen, Walter Skayhan, Stephen Geppi and Richard Pineau, who collected the real estate under Maine Investment Properties, and then spun off limited liability companies for the buildings.

Most of the MIP properties were in downtown Camden, though one, the Ducktrap Retreat, was in Lincolnville.

Building 6 was included Knox Mill Properties LLC, and Maine Investment Properties began a $2.5 million retrofit to turn the office space into 26 condominiums. That followed much public discussion by the community about the future of the Knox Mill, and its hesitancy to watch downtown industrial and commercial space converted to residential units.

The town eventually approved the condominium plan, with ground floor commercial space. The condominiums were to be luxurious, according to their marketers, with rooftop gardens and balconies.

But by the end of 2008, the properties were placed under receivership. PNC Bank, based in Pittsburgh, asked the court to appoint Gray and Associates, also of Baltimore, Md., to act as receiver and sell the properties after Maine Investment Properties failed to make mortgage payments.

On Dec. 31, 2008, PNC said, the Camden LLCs "were in default under the Note and Mortgage, and pursuant to the provisions of the Note, Defendants confessed judgment in favor of plaintiff in the amount of $14,696,986.24 for unpaid principal, $264,605 for accrued interest, $34,790.46 for late charges, and $1,469,698.62 for attorneys fees, together with costs of the court."

By 2008, three units in Building 6 had been converted to condominiums and sold to individual owners; other spaces were leased out to small businesses

That is despite five years of minimal maintenance and two years of sitting under bank ownership following default of its former owner, Knox Mill Properties LLC, whose principals were Walter Skayhan, Stephen Geppi and Richard Pineau, of Baltimore.

"It is handicap accessible, and it has a restaurant," he said. "It is in decent shape, with some heating and ventilation issues." The HVAC system was installed by MBNA, when it renovated the mill approximately 12 years ago.

The three buildings are connected, and extend from the corner of Washington Street up Mechanic Street. Its corner space there is occupied by the Owl and Turtle Bookshop. The total building space amounts to 45,000 square feet; after subtracting hallways, common areas and attic, available space is approximately 28,000, said Orne.

His immediate goal is to tend to deferred maintenance, and, he said: "run it as a nice, affordable office and retail complex. There is no grand plan other than to get it stabilized. This is my business."

Orne's business includes acquiring real estate complexes up and down the East Coast. AHP Holdings, established in Portland in the mid-1990s, renovated the State Street Theater there, as well as several historic buildings downtown. He sold that portfolio of Portland buildings in 2003 and has segued into other residential and commercial developments.

Orne lives in Camden, and is realistic about the mill's potential, which he views as inexpensive office and retail space for those who do not depend on a lot of tourist foot traffic -- "It's going to be a cheaper alternative for businesses that don't feel they need to be on Route 1." He regards the mill space as solid real estate investment.

"I live here and I have other buildings in town," he said. "I don't have any plans to flip it."

Nor does he have plans to remove the mill's former smokestack.

"The bank spent $90,000 scraping all the paint off of it and structurally, it's fine," he said.

Orne is also negotiating with a restaurateur for reopening the former Brevetto's space.

"It will be nice to have a good Italian restaurant in Camden," he said.

Knox Mill Complex real estate

Last April, Gray and Associates contracted with CBRE/The Boulos Company to divest of the Knox Mill complex, including the Ducktrap Retreat in Lincolnville. Altogether, the parcels and buildings held then a collective price tag of almost $20 million.

Some buildings sold earlier this winter including 1 Free St., which was on the market for $500,000, and 100 Mount Battie St., a 10,000-square-foot industrial warehouse that was available for $400,000. That buyer was Ron Smith, according to Tony McDonald, real estate broker for The Boulos Company.

Other buildings once owned by MBNA/Bracebridge that changed hands include:

49 Mechanic St. was purchased in January 2010 for $350,000 by John D. Morris, and is now listed under ownership by the Woolen Barn LLC. Knox Mill LLC had originally purchased it from Bracebridge in 2005 for $450,000.

On May 4, 23 Whitney Road in Lincolnville, the Ducktrap Retreat, was purchased by Ducktrap Hospitality LLC of Exchange Street in Portland for $700,000. The property is assessed by Lincolnville at $850,700.

Comments (0)
If you wish to comment, please login.