Saturday August 2, 2014
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Saturday August 2, 2014
Posted: Jan 30, 2014

This week in business news: more housing development on Munjoy Hill and the MM&A discount sale

Commercial Confidential — Business and economics news for greater Portland

Back in October I wrote about how developers are adding new housing to Portland’s Munjoy Hill neighborhood to target the high end of the market — at their listed prices, you’d need a six-figure income to be able to afford a mortgage for these places.

This Tuesday, the city’s planning board approved two more projects that will add 17 more homes to the neighborhood. The larger of the two projects, a 12-unit condo building planned for the hilltop of Congress Street, is advertising prices starting at the "upper $500,000s."

In December, another 29-unit townhouse development planned for the same neighborhood, at similar prices, won planning board approval one day after the developers revealed in a Securities and Exchange filing that they had raised $1.4 million in an equity offering to finance the project’s construction. So it’s apparently not just empty-nesters who are interested in the neighborhood —  investors are also pouring their money in, presumably with expectations of healthy returns.

The Verso-NewPage merger

Investors are feeling less bullish on Maine’s paper industry. Earlier this month, Verso Paper Corp., the owner of paper mills in Bucksport and Jay, proposed an acquisition of NewPage Holdings, owner of the Rumford mill, in a deal that would have delivered cash to the current owners of NewPage and restructured the debt of both companies.

Now, that deal is in jeopardy, because Verso can’t convince investors to buy into a key financing deal for the merger. 

In today’s newspaper, staff writer Jessical Hall quotes Lloyd Irland, a forestry and wood industry expert, who says that the stalled deal is an indication that “not many people are excited to finance the prospects of the industry. It does show you what a precarious spot they’re in.”

Montreal, Maine and Atlantic sale

Tom Bell has a story in today’s paper about some possibilities for the future of the Montreal, Maine and Atlantic (or MM&A) railroad, whose previous owners were bankrupted by the Lac-Megantic disaster last year.

The new owners bought the 480-mile railroad for $14.5 million. To put that number into context, the Amtrak Downeaster spent $35 million to rehab 26 miles of rail in order to expand passenger rail service from Portland to Brunswick a few years ago. 

By my back-of-the-envelope math, $14.5 million is in the ballpark of what the MM&A’s rails would be worth on the scrap metal market.

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