A Developer Helping Maine Restore Downtowns Starts with Augusta’s Arsenal

by Ramona du Houx

Maine is a visual delight, not only with our forest wilderness, mountains and seascapes, but also because of our historic buildings. Vast landscapes and towns across America have been bulldozed in the belief that modern development and big-box stores were what people wanted. Some of these developers put profits before intrinsic community values. There is another type of developer, one that looks to see the historic value in a building and how that can revitalize and rejuvenate communities.

Tom Niemann of Niemann Capital, LLC of Durham NC is a successful developer who transformed tobacco mills in North Carolina into residential buildings, which spurred development into the downtowns surrounding the mills. After coming to Maine, he became enthusiastic and dedicated to help the state chart a course for its future historic buildings, so other developers could also begin renovating Maine’s historic downtowns.

"As soon as I got here I realized that there are some limitations in Maine’s state historic tax credit program. So I decided to share my experience in North Carolina and my experiences that I’d had with other states that have state preservation programs that don’t have the limitations that the Maine program does," said Niemann. "Elaine Clark introduced me to everyone and Sen. Libby Mitchell took me to see the governor. I actually told him that the state has to become more competitive by changing the historic tax credit program."

During that meeting the governor made a commitment to work with Niemann, so that more historic buildings could be preserved in the state.

Because other states don’t levy a high tax on developers who restore historic buildings, they have seen a boom in renovation. Amending Maine’s historic tax credit program will level the playing field. In Rhode Island it is near impossible to find a mill that hasn’t been renovated, because they don’t have to pay a tax on historic properties.

"I have a passion to restore historic buildings," said Niemann. "Any historic building is an asset that is irreplaceable. The Arsenal is a great find and its history fascinating."

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The Arsenal as it appears today on the banks of the Kennebec river in Augusta

In 1820 a third war nearly broke out between Maine and Britain. Some farmers from Aroostook County complained that the British were taking their land, and the British requested troops be sent to Canada. The John Jay Treaty of 1794 between Britain and America set out border parameters, but Britain later disagreed with the Jay commission’s official border designations. This northeast boundary controversy lasted 22 years, during which time the Kennebec Arsenal was built. The complex is now the most intact early nineteenth-century munitions depot in the U.S. In late March the Kennebec Arsenal had a new owner — Niemann Capital. From the beginning Niemann only saw potential in the Arsenal complex, despite the limitations the historic tax credit posed.

"Over time, we were able to get more people to help support the project and pretty much created a pilot program for the governor and the existing leadership in the Legislature that would work for the Arsenal. That basically has set the stage for the bigger dialogue which should strengthen the entire historic tax credit program for the state of Maine. As a result of the credit, the Legislature earmarked for the Arsenal project, we were able to recruit an equity investor. Having an investor gave the city of Augusta more confidence in us, and then they stepped up with the tax increment financing district," said Niemann. "All this has made it more attractive to the banks, and now we can start to recruit tenants and then begin construction."

"As long as Tom keeps finding gems like the Arsenal to renovate, I’ll be there backing him," said Gary Heinz, Niemann’s partner. "Renovating historic properties, with communities, really is our goal. We did it in North Carolina, and we are thrilled to have the opportunity to be a part of revitalizing downtowns in Maine."

"City and state leaders, both in my administration and in the Legislature — along with the private sector — have all worked together to forge a partnership that has helped make this project happen," said Governor Baldacci during the transfer deed ceremony. "The historic Kennebec Arsenal already is one of those places that helps make Maine a special place. Its renovation will help revitalize Augusta’s downtown."

The Arsenal’s eight granite block riverfront buildings will be transformed into a vibrant retail and residential complex with a boutique hotel at the center. Restaurants and cafés will be a part of the complex. And most of the grounds will be open to the public, like a park, so residents of Augusta can enjoy the riverfront.

The second phase of the project will see the construction of new buildings on a hill behind the arsenal that will be residential.

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Baldacci greets Niemann on the day the ownership of the Arsenal property transferred to Niemann Capital, thanking him for his dedication to renovating downtowns.

"I want to recognize this company for the work they have done," said Baldacci, as he presented Niemann with a golden key to the Arsenal. "Our rivers are the lifeblood of downtowns across the state. This will have a ripple effect across Maine. It represents an exciting future for our downtowns."

Niemann is also renovating the Hathaway factory in Waterville and the Brewer mill, both riverfront properties.

When the Brookings Institute Report came out, advising the state about what it needs to become successful in the global economy and how important revitalizing downtowns are to the quality of life in Maine, Niemann and others saw that many of the issues in the report reflected his experiences. "Tom could have written the Brookings Report," said Sen. Mitchell. "He’s an inspiration for the state. Once the governor met with Tom, he made sure the Arsenal project happened."

Niemann has spent the past 41 months working to ensure the state understands how important it is to renovate historic downtowns by changing Maine’s historic tax credit program. He regularly testifies at the Capitol. Of course his company is destined to benefit financially from his work, but that’s not the only reason he’s dedicated himself to this mission.

"We have a thriving historic downtown community in NC. We started out with $40 million in investment. Now there is over $200 million invested in the tobacco mill downtown renovation project," said Niemann. "That’s from other investors who saw the potential because we set the ball in motion. I believe the changes we help make in Maine will spur other likeminded developers to get on board."

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"What we are doing is investing in the future of Maine in the downtown areas. There’s no better investment," said Tom Niemann ,holding his golden key , standing on the Arsenal property with partner Gary Hienz.

Niemann is dedicated to restoring the glory of old buildings, so that downtowns can become enlivened with people enjoying the community. He goes out of his way to ensure that his buildings have affordable rents.

"It makes no sense to renovate a building, forcing local people out of the area because they can no longer afford the rents," said Niemann. To invigorate downtowns with his redevelopment projects is all part of how Niemann approaches any project. "It really is about community."

Pine tree zone tax credits have helped him move forward in Maine.

"In Maine every one of your downtowns is special; they still have a lot of historic buildings just waiting to be renovated," said Niemann.

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Baldacci presented Niemann with a golden key to the Arsenal which surprised the developer and Sen. Mitchell.