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Building sale falls through

Crisis & Counseling says it can't afford upgrades

By Matthew Stone mstone@centralmaine.com
Staff Writer

AUGUSTA -- The sale of the Kennebec Journal's building on Western Avenue to a mental health agency has fallen through, according to newspaper and agency officials.

Crisis & Counseling and the Kennebec Journal had signed a purchase-and-sale agreement in November and expected to close the deal by the end of January.

But Crisis & Counseling determined it couldn't afford to make the upgrades and modifications it needed at the newspaper's building at 274 Western Ave., said Lynn Duby, the agency's chief executive officer. "What we did is a lot of work in our due diligence process to see if the building was going to meet our needs and fit within our budget," Duby said. "When we finally got all of that work done, it was clear it wasn't going to be a good fit for us financially."

Crisis & Counseling has been searching for a new location for a more than a year in order to leave its offices at 32 Winthrop St., and make way for an expansion of Kennebec County courts.

"We're currently looking to see if there's a possibility if we could make a fit with a somewhat smaller sized building," Duby said.

Crisis & Counseling's real estate broker, Chris Paszyc, said in November the agency toured 10 properties that fit its size requirement of 25,000 to 30,000 square feet. The Kennebec Journal's Western Avenue building is 53,000 square feet and was last assessed at $3.3 million.

Kennebec Journal and Morning Sentinel CEO Dale Duncan said the newspaper will put its building back on the market and proceed with its move to new offices it plans to lease at 36 Anthony Ave., in north Augusta. Duncan said the company is "sad" the sale didn't go through, but isn't discouraged about finding another buyer for the site.

"It's obviously surrounded by some of the most prime retail property in central Maine with easy access both to the city and to the Interstate," he said.

The Kennebec Journal is selling the property it's occupied since 1961 and moving to smaller offices because the newspaper is no longer printed on site and has a smaller staff.

MaineToday Media, the newspaper's owner, consolidated all press operations at its printing plant in South Portland in late 2009. MaineToday also owns the Portland Press Herald and Morning Sentinel in Waterville.

All the papers are printed in South Portland.

For now, Duncan said, MaineToday Media can sustain the expense of leasing its Anthony Avenue offices and maintaining the Western Avenue property.

"It's obviously an expense we'd rather not have," he said. "That just sometimes happens when you're trying to sell a piece of property."

A number of variables would have had to fall into place for the sale to Crisis & Counseling to work, Duby and Duncan said.

The sale of the agency's property can only go through once Crisis & Counseling staff members have vacated their building, Duby said.

At that point, the Maine Governmental Facilities Authority -- which would ultimately lease the property to the state judicial branch -- would issue bonds to finance the purchase, leaving Crisis & Counseling without interim financing to buy its new offices.

"There were a lot of moving pieces to this," Duby said. "There was a bridge loan. There were two bonds."

Crisis & Counseling began pursuing interim financing but called off the deal before it received the loan.

"We tried to be sensitive to their needs and made clear that we were amenable to alternate kinds of financing," Duncan said, adding that Crisis & Counseling requested two extensions to the deal. "In the end, I just don't think they were able to see their way clear to pull it all together."

Duby said Crisis & Counseling is still negotiating the purchase-and-sale agreement on its building with the state court system. That's the sale that would allow the court's expansion to take place.

Mary Ann Lynch, director of court information for the Maine Judicial Branch, said the court's expansion "is very much on track."

The court system will continue negotiations with Crisis & Counseling once the agency has found another location, she said.

Matthew Stone -- 623-3811, ext. 435

mstone@centralmaine.com