The owner of the crumbling Bangor Mall used court testimony last week to tease big changes that could come in the next few years, including a brand-name hotel or $500 studio apartments.
It was the latter idea that grabbed the attention of housing advocates in the city. While housing has become a growing part of mall redevelopments across the country, experts say that low rental rate is unrealistic and not likely to come from a mall owner in a legal fight with Bangor.
“Somebody has not run their numbers,” Kurtis Marsh, a Bangor real estate agent and property manager, said. “There hasn’t been $500 studio apartments for more than a decade.”
Marsh, who manages around 1,000 rental units in the city, said the going rate for one of his efficiency or studio apartments in Bangor is $900 at minimum. The mounting costs of construction, utilities, insurance and taxes make anything less unworkable, he said.
That is slightly lower than the roughly $1,000 that MaineHousing, the state’s housing authority, deems the market rate for a studio apartment with utilities in the Bangor area. The equivalent figure for renting a single room was $775. Maine’s lowest market rate in that category was $528 in Washington County, which was still more than the price teased at the mall.
“I’d love to see how it would work, because we’d replicate it,” Mike Myatt, the executive director of Bangor’s housing authority, said.
The proposed rental rate is especially fanciful because the mall would have to be retrofitted to allow for residential development, Marsh said. That could be costlier than building new. The mall is also in poor condition. The city of Bangor has sued its owner for code violations, including failing to fix a broken sewer pipe, a leaking roof, large potholes and a dilapidated sign.
Representatives of Namdar Realty Group, the mall’s New York-based owner that calls itself one of the biggest retail property owners in the country, did not respond to a request for comment seeking more information on the plans that a legal advisor outlined in court last week.
Namdar’s website says it manages 138 multifamily or mixed-use developments nationally totaling 9.8 million square feet of space. But it is mostly in the retail business. It sold one of its properties in Connecticut to a Nebraska developer who promises to do something similar to what’s being floated in Bangor, but the apartments built will be luxury and multifamily.
Bangor has rezoned the area around the mall to allow for residential uses in the future, but officials have said in the past that Namdar has been unresponsive to their calls. While the company’s plans are unclear, there is national precedent for this kind of redevelopment.
The country’s first enclosed shopping mall, built in 1828 in Providence, Rhode Island, is now a mixed-use development featuring small apartments and retail. Kittery, Augusta and Brunswick all have completed or pending housing projects in decaying shopping centers.
“A lot of malls are being redeveloped across the country and have been redeveloped. Most of them are converting to mixed use,” Randy Shearin, the editor of the national trade publication Shopping Center Business, said.
It makes sense to bring uses other than retail to a mall because they often sit on good real estate, he said. That’s why Myatt’s agency has been keen to develop housing in the Bangor Mall area for years. Its proximity to the interstate, businesses and employers, medical offices, and Eastern Maine Community College makes it an ideal place for residents, he said.
“If those folks can pull off that development, I think that would be so great for our city.” Myatt said.
