Biddeford Reconsiders Position on Condo Conversion Moratorium

 A proposal to convert existing apartments at the historic Pepperell Mill building in downtown Biddeford into condominium units – seemingly stopped in its tracks for the next six months by the City Council – is once again moving ahead thanks to an agreement between the city and a single mill ownership group, Pepperell Mill Progression, LLC.  

The City Council meeting of October 15 resulted in a city-wide six month moratorium on the conversion of apartment units to condominiums. However, in a special meeting of the Council on November 1, an exception was made for the ownership group that had initiated concerns on the part of the city over the proposed conversion.

Chris Rhoades of Pepperell Mill Progression, LLC stated during the October 15 Council meeting -- during which a moratorium on condominium conversions was approved on a 6-2 vote -- that the Pepperell Mill conversion has been the subject of talks with the city for the past six months.

Specifically, Buildings 15, 17, 18 and 35 are currently apartment buildings. The process for approval of condo unit conversions in Building 15 is under way with the city, and was excluded from the moratorium as part of the October 15 action. Buildings 17, 18 and 35 would be subject to the moratorium as approved.

In the wake of the October meeting, the Council’s action was challenged by Rhoades and his group. The city responded by authorizing City Manager James Bennett “…to enter into an agreement with Pepperell Mill Progression, LLC that permits the conversion of all four buildings to proceed and provides additional tenant protection and benefits that exceed the City’s minimum legal requirements for condominium conversions,” according to a November 6 statement released by the city.

The agreement includes a number of measures designed to provide additional protections to existing apartment residents:

• Tenants must receive at least 180 days of notice to vacate for the purposes of a condominium conversion.

• Any residential tenant who leaves at the end of their current residential lease will receive $1,000 in relocation assistance at the time of their move.

 - Residential tenants who have been given a notice to vacate for the purposes of a condominium conversion will receive a $2,000 relocation assistance payment in addition to the $1,000 payment described above.

 - Tenants with a base rent at a rate less than $1,750 per month will receive an additional $1,000 in relocation assistance.

• Future annual rent increases for tenants may not exceed 5% per year for the next three years.

• Tenants who do not elect to purchase a unit will be entitled to assistance by on-site staff at the Pepperell Mill in finding nearby rental accommodations.

Several points intended to make the conversion to condominium units more attractive to current apartment tenants who may also be prospective buyers were part of Pepperell Mill Progression, LLC’s presentation to the Council at the October 15 meeting. They remain part of the agreement with the city:

•  The opportunity to purchase a unit before the general public at an off-market price without competition,

•  The participant’s last month’s rent would be free,

•  A buyer’s credit of 3.5% of the purchase price would be added to the settlement statement at closing, available for closing costs or use as a down payment,

• The chance to qualify for a 90% mortgage with Androscoggin Bank, which the LLC has partnered with to provide such a possibility.

The LLC plans to continue building out many more apartments, even as the condominium conversion goes forward. The city has permitted 76 additional units in Building 11 which are scheduled to become available in 2025. Plans call for sixty more apartment units to be constructed within Buildings 19 and 20.

Rhoades outlined asking prices for the converted condominium units during the October meeting: twenty units would be offered in prices ranging up to $299,999. Thirty-seven units would be offered at prices up to $399,999, and forty-two units would be offered for up to $499,999. “Some” luxury units would be offered in the $800,000 range, he added.

Following the November 1 meeting and decision to except Pepperell Mill Progression from the moratorium, May Martin Grohman, offered a statement, which reads, in part:

“This agreement represents a significant step forward in ensuring that residents are supported and secure during this transition.

“We recognize that housing stability is a cornerstone of our community’s well-being. This collaborative effort underscores our commitment to protecting tenants while enabling responsible development. The protections agreed upon will provide residents with clear communication, reasonable timelines, and assistance to minimize disruption as these buildings undergo conversion. For those that want to buy a home, the new agreement strengthens that opportunity. For those that will plan to relocate, significantly enhanced support & flexibility has been negotiated.”

 

Bob Hamblen can be reached at rhh0918@gmail.com