Clare Marron and her husband made their dreams of living and working in a historic building a reality in 2009, when they moved to Gardiner and bought a long-vacant one downtown.
The couple was able to move in and get their business, the gift store Monkitree, open by 2010. Fifteen years later, they are living on the second floor and still in the process of redeveloping the third and fourth floors of the historic building on Water Street.
“It’s an ongoing process,” Marron said with a laugh. “You do things a bit at a time.”
Their story exemplifies a main challenge facing Maine cities and towns that have had some success revitalizing downtowns that were neglected a generation ago in the era of suburban development. Upper floors are still unused in many buildings. Filling them with residents is seen as the recipe to more vibrant city centers and an answer to the housing crisis.
“I’ve got companies that are growing and expanding and I need workers for them,” Tracey Desjardins, Saco’s economic development director, said. “I need a place to put them.”
Saco is taking an inventory of how many vacant spaces there are in the upper floors of its downtown buildings. Though many owners are absentee and can’t be contacted, some that Desjardins have talked to tell her they just “can’t make the numbers work” to develop their upper floors into housing.
It’s tough enough to build new housing, given the recent leap in construction costs that was measured at 35 percent between 2020 and 2022 alone, according to The Boulos Company. But the historic mixed-use buildings that make up downtowns are often even more challenging to finance and insure than new builds.
Buildings listed on the National Register of Historic Places present extra challenges for developers and communities, noted Melissa Lindley, Gardiner’s economic development director. Developers can be put off by the rules that include honoring original uses, said John Egan, a senior program officer with the Genesis Fund.
“It’s not the handcuff a lot of people perceive it as,” Egan said Wednesday at Build Maine, a housing conference in Skowhegan. “The biggest hurdle to getting involved with historic tax credits, even on a smaller scale, is how much money you have to spend up front.”
There are other limiting factors like a shortage of historic consultants in Maine, whom developers need on a project in order to receive a tax credit, Egan said. Getting projects insured is also a barrier, especially in regions affected by climate change-driven coastal flooding.
As construction costs climb, it is likely that most of the housing created in upper floors of downtown buildings will be market rate to justify the developers’ expenses. That is prohibitive for middle-income families. In Saco, the police department is down eight officers in part because of a lack of affordable housing in the region, Desjardins said.
“Most people are doing market rate housing [downtown],” she said. “They can’t get those numbers to work for affordable housing, and unfortunately, that’s where we need it.”
When a developer does have the cash upfront to use a historic tax credit or make use of tax increment financing, Egan said the results are transformative. Construction costs or rental rates can be lowered by the tax incentives, a city’s vacant space comes back into productive use and, by adding housing, local commerce gets a boost and competes with area big-box stores.
“It’s a built-in support system for our downtown,” said Lindley of Gardiner.
For Marron, getting exterior work done on the building when they took it over was clear-cut. She and her husband, Peter Malyon, had to meet city and state requirements for a facade grant that was matched 50/50.
The interior work has been a real struggle because of the skyrocketing costs and workforce shortages that have defined the pandemic. The Gardiner couple now plan to operate their shop on the first floor, eventually live on the third and fourth floors and operate a short-term rental on the second.
But Marron would not change much. For her, living and working right in the heart of downtown is worth it. It strengthens her sense of community. She enjoys the beautiful architecture of the historic buildings around her and the eclectic mix of characters and businesses.
“We wouldn’t have even considered building new,” she said.
