Potential buyers plan to raise rents for 152 residential units and 150 commercial tenants
BIDDEFORD – Local leaders are concerned and speaking out against the potential rent increases that could come as a result of the sale of 10 buildings in Biddeford’s downtown that make up the Pepperell Mill Complex. Purchased in the 2000s for $1.4 million, local and state TIF financing helped cover the mills’ renovations. The news of a possible sale and intentions to raise rents for residential and commercial renters has shaken local leaders. Yesterday MaineBiz reported the rent hikes and linked to a video of the Maine-based developers using CrowdStreet to attract out-of-state funders to invest to cover the sale.
“Normally, I would be excited about new possibilities for our downtown,” said Speaker Ryan Fecteau of Biddeford, “especially knowing the great work Doug Sanford has done to bring life to formerly shuttered mill buildings. However, the prospective purchasers indicated that rents will increase on families and businesses located in the mills. For residential units, they have said the rents are 20-35% below market value and for commercial units, they have said the rents are 20-50% below market value. If they come even within earshot of double digit percentage increases, it would be no doubt devastating for families and businesses located in the mills.”
“At the heart of the work we’ve done in Biddeford, one of our missions has been to preserve affordable housing, which we view as a critical element for economic stability and thriving families and communities,” said Biddeford’s Mayor Alan Casavant of Biddeford. “This brazen rent increase would be a devastating blow to the small businesses who have revitalized our community. These buildings hold outdoor gear manufacturers, distilleries, local food producers, clothing designers and local artists, to name a few. It is imperative that any new owner of the mill be aware and considerate of the interests of the community, and not simply interested in profit margins.”
“The reality is that our community is struggling with a housing affordability crisis. Seeing out-of-state hedge fund investors try to buy up our local housing stock, with the specifically stated goal of raising rents, makes me upset, to say the least,” said Senator Susan Deschambault of Biddeford. “This news is especially upsetting after the city, the Maine State Housing Authority, DECD and I worked so hard to help municipalities fund local affordable housing projects. How can we attract a strong workforce if folks can’t even afford to live here? Biddeford is my home, and it’s home to hardworking people. Many of the businesses in these buildings are small mom-and-pop stores who contribute to the fabric of the community. A big hike in rent like this would absolutely force them to shut their doors, leaving a hole in our downtown.”
“Our small business is right across the street from the historic Pepperell Mill campus, and it’s difficult to imagine how we’d feel if we’d opened there and been faced with this possibility. Small businesses cannot absorb large, sudden rent increases of up to 50%, especially as our local economy is still struggling to recover from the pandemic. Over 150 families who rent here could be priced out of their homes and 150 commercial tenants could lose the place they’ve grown their small businesses. This could really hurt Biddeford’s business community,” said Rep. Erin Sheehan of Biddeford.
“I could not believe what I was seeing when I watched that video,” said City Councilor Amy Clearwater whose ward includes the Pepperell Mill Campus, “Affordable housing is one of the largest challenges facing our state and it is outrageous that investors could help our downtown price out over 150 renting families and 150 small businesses. The pitch to hedge funds they’re advertising is that they can raise the rents in a substantial way to get a return on investment on the backs of our neighbors. I see that as tragically short-sighted for what our community needs and deserves.”
According to CNN, in the first three months of 2021, nearly a quarter of all homes sold in the United States were sold to investors. BlackRock, JPMorgan Chase and Goldman Sachs were among the big-name buyers. In late October, former BlackRock Head of Real Estate Jack Chandler joined CrowdStreet’s Investment Committee to actively assist in selecting investments for CrowdStreet funds.
Speaker Fecteau, Mayor Casavant and the Biddeford delegation are inviting the Maine-based developers to a meeting at the Speaker’s office in Augusta to learn about their intentions and to advocate for the residents and businesses at the Pepperell Mill Campus.
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