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March 7, 2019

$14M financing for Rock Row project will upgrade transportation links

Courtesy / Wakely Beasley & Associates
Courtesy / Wakely Beasley & Associates
A beer and food hall, right corner, will be one of the anchors of the planned Rock Row development in Westbrook. The Market Basket supermarket, approved in September, can be seen in the background.

Developers of the Rock Row project in Westbrook have secured $14 million in bond financing for the two million-square-foot mixed-use development in an agreement that will pay for public infrastructure work that includes upgrades to Maine Turnpike exits 47 and 48, local intersections and other public infrastructure.

The financing involves a tax financing district approved by the city of Westbrook last year, as well as a lease agreement with Greater Portland Metro, approved by the transit district's board of directors in December. The state Department of Economic and Community Development also played a role.

The Finance Authority of Maine in December approved the bond issue for the Dirigo Center Developers LLC, which is the company formed to develop the project by Waterstone Development of Needham, Mass. In the Revenue Obligations Security Program under with the bonds are issued, FAME acts as a conduit for borrowers to get access to favorable interest rates in projects that help stimulate the economy.

The bonds issue depended on public involvement, which is where the public infrastructure and the GP Metro partnerships come in.

The city of Westbrook last year agreed to a tax increment financing district that allows 50% of the tax generated at Rock Row to go back to the city for 25 years.

In December, Greater Portland Metro's board of directors agreed to lease the streets and sidewalks of the shopping center portion of the project for 60 years. The transit system would get a one-time $175,000 payment for the agreement. The development would be responsible for the roads and other related infrastructure according to the agreement. The agreement will allow expansion of public transport within the complex, officials said in December.

The Metro's Husky Line, which runs on Route 25, goes by the development planned for the former Pike Industries quarry.

"This is an excellent example of collaboration among the different public and private sectors to execute a complex transaction which will ultimately benefit the region and the state of Maine." Greg Day, director at Waterstone, said in a Wednesday news release about the bond issue.

Developers said in the release that tax increment finance districts have been used "as an economic development tool to bring critical development projects to fruition."

"This transaction marks a precedent for the issuance of bonds solely backed by the tax increment to be created by Waterstone's Rock Row development," the news release said.

"This transaction represents a partnership that enables the developer to commence significant public infrastructure improvements immediately without burdening the local municipality with upfront financial risk."

The first phase of the project has started and is expected to open early next year. The phase includes an 80,000-square-foot Market Basket shopping center at the northeast corner of Rock Row, at the intersection of Main Street and Larrabee Road across from the Westbrook Crossing shopping center.

The first phase is expected to create up to 250 construction jobs, developers and FAME officials said. It's expected to create an additional 250 permanent jobs related to the tenants of the development.

Bruce Wagner, FAME's chief executive officer, said in the news release, "FAME is pleased to help this important economic development project by providing access to favorable financing."

He said the public infrastructure improvements will support Rock Row's vision of being a destination accessible by various forms of transportation, public transit upgrades and improved connectivity with surrounding communities.

"Metro is pleased to partner with Waterstone to help achieve a truly transit-oriented development in southern Maine which can serve as a model for sustainable growth in this region," said Greg Jordan, general manager of Greater Portland Metro, said in the release.

Waterstone Properties Group, the developer of Rock Row, and Westbrook city leaders anticipate that the development will drive significant economic growth to the city and region, in addition to potentially generating up to $6 million annually in property tax revenue once completed.

"I am excited to see this significant economic development project move forward and recognize that through collaboration and partnerships we get things done," said Westbrook Mayor Mike Sanphy in the release. "The Rock Row development project is an exemplary example of this."

The developers also announced last month that a temporary stage on the site this year will be the venue for the Waterfront Concert Series.

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