After years of neglect and a mass exodus of tenants, downtown Portland’s iconic Time & Temperature Building has been seized by the bank.
The 14-story office tower at 477 Congress St., which opened in 1924 as the 12-story Chapman Building, can be recognized from miles around by the 30-foot-wide, 9-foot-high digital clock on its roof, a Portland landmark since it was installed in 1964.
But up close, it’s apparent that the property has fallen into disrepair in recent years, remaining Time & Temperature Building tenants said.
“The owner refused to put the upkeep in on a regular basis, (and) several tenants left,” said Leigh Slaughter, owner of The Bead Hound inside the Time & Temperature Building. “That’s why it went into default.”
Another tenant, Mary Zarate, owner of Z Fabrics, said she was notified last week about the foreclosure and assured that it would not affect her business. Typically a bank will make improvements, if necessary, to a foreclosed property and attempt to resell it.
“The building is iconic, it’s beautiful, and it’s just kind of decaying,” Zarate said. “It’s really a shame because the building itself, everybody recognizes it.”
Behind the scenes, the building’s most recent owner, a subsidiary of Brooklyn-based Kalmon Dolgin Affiliates LLC, had been negotiating with its commercial mortgage loan servicer to reduce the loan’s $12 million principal. Those negotiations broke down in late April, and the holder of the mortgage’s promissory note, San Francisco-based Wells Fargo & Co., took possession. The property seized by the bank also includes nearby Monument Square Parking Garage.
Kalmon Dolgin Vice President Joshua Dolgin, who is listed in city records as president of the building’s owner, 477 Time & Temperature LLC, did not return calls seeking comment.
LACK OF TENANTS
According to notes made by the loan’s “special servicer,” Bethesda, Maryland-based CWCapital Asset Management, the loan was referred to special servicing in February 2015. Special servicing is the equivalent of collections for commercial loans backed by investors, known as commercial mortgage-backed securities.
However, the reason wasn’t lack of payment, according to servicer records, provided to the Portland Press Herald by research analyst Sean Barrie of New York-based Trepp LLC. The problem was a lack of tenants. At a time when the average occupancy rate for office buildings in Portland was 90 percent, the Time & Temperature Building’s occupancy had fallen to just 60 percent, where it has remained.
Companies such as Trepp follow the repayment progress and prospects of loans that have been pooled together and sold in pieces, or tranches, to investors in commercial mortgage-backed securities. Information about the health of each loan is used in determining the investment grade of the securities.
Commercial mortgage loans can go into default for reasons other than lack of payment, including failure to maintain a contractually specified occupancy rate or loan-to-value ratio. The entire remaining principal of Kalmon Dolgin’s mortgage loan, totaling about $11.3 million, was scheduled to be due in a single balloon payment this coming December. With Kalmon Dolgin telling the servicer it could not make future payments or attract new tenants, the bank decided to foreclose.
“We had no word until the bank actually took possession,” Slaughter said.
ARCHITECTURE OF THE TIMES
In its early days, the Time & Temperature Building was distinguished by a large, two-story rectangle carved out inside an extension of the building that was lined on the ground floor with fancy shops. Above, a glassed-in mezzanine and balconies looked down on a sloping floor, which was illuminated by a massive skylight.
It was Maine’s first arcade. Common in Europe and prominent in large American cities, including Providence and Cleveland, the arcade revolutionized shopping. The Chapman Building became a prototype for the modern shopping mall in Maine, but the arcade’s original architecture has since been sealed away under false ceilings and drywall.
The building’s rooftop clock, which flashes the time, temperature and short messages such as “PARK BAN” on parking ban days, was installed in 1964 by then-owner Casco Bank, which also added the top two floors.
The sign became popular in the 1970s when Portland Savings Bank, the owner of the sign and the tower during that period, held summer contests in which residents were invited to guess when the sign would first register 90 degrees. Winners got $500.
But weather and time took a toll on the electronic sign by the 1990s. It was replaced with a new model in 1999 by the real estate arm of Libra Foundation, which owned the building until 2003.
The next owner, Jeffrey Cohen, a real estate developer from Washington, D.C., purchased it from Libra for $9.5 million and proposed a $1 million restoration to return the arcade and other elements of the building to their historical prominence. However, that plan never came to fruition.
Cohen ultimately sold the building to Dolgin in 2006 for $12.5 million. Its current appraisal value is $6 million, according to Trepp.
Slaughter said he hopes Wells Fargo’s seizure of the property will mark the beginning of a renaissance period for the once-thriving structure. Meanwhile, he and Zarate both said their businesses, which have access from Preble Street in addition to interior entrances in the former arcade area, are doing fine.
In a typical office-building foreclosure, the bank hires a property manager and commercial real estate broker to addresses major maintenance issues and bring in new tenants to raise the property’s value before selling it to an investor.
Slaughter said he is already seeing improvements under the building’s new management, NAI Hunneman of Boston.
“They’ve been pretty proactive,” he said, working on repairs and trying to entice new tenants. “This building has such a fascinating history. It’s crazy that it has gotten to where it is now.”
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