1/6/2006 - By KELLEY BOUCHARD, Portland Press Herald Writer

Copyright © 2006 Blethen Maine Newspapers Inc.

The transformation of a busy Bayside intersection is set to continue this month when developer Theodore West starts construction of a $5 million office building at Marginal Way and Hanover Street in Portland.

The four-story building will be across Marginal Way from the AAA Building that West built a few years ago. It will be just down the street from Gorham Savings Bank and Wild Oats Market, both built within the last few years by other developers.

AAA Northern New England, which plans to expand, will move some of its operations to the new office building. Its insurance sales and service center will occupy the top two floors.

Another insurance agency is negotiating a lease for the entire second floor and half of the first floor. A credit union with a drive-up window is expected to lease the other half of the first floor, said Francis O'Connor, West's real estate broker with NAI The Dunham Group.

West also plans to build a third, larger office building and parking garage diagonally across the intersection at Marginal Way and Preble Street Extension.

That project, which includes student housing proposed by another developer, would be built on three acres of city-owned land that West is buying for $1 million. The proposal is expected to go before the Planning Board in the spring, O'Connor said.

City officials applaud West's continued focus on the gateway intersection in Bayside, a neighborhood targeted for redevelopment six years ago. Councilor James Cloutier, chairman of the community development committee, sees West's plans as a harbinger for other city-owned land in the area.

"There's strong demand for office and retail space in that part of Bayside and it seems to be happening a lot faster than we thought," Cloutier said.

The Marginal Way-Hanover Street site includes land formerly occupied by the Miss Portland Diner and the city's public works sand-storage facility. West completed the purchase of the sand-storage parcel last Friday, paying $57,500 for the 6,000-square-foot lot, said Jack Lufkin, Portland's economic development director.

West, who lives in Cape Elizabeth, received Planning Board approval for the 28,000-square-foot office building last fall. Hebert Construction of Lewiston is set to start the project in mid-January and complete it by September, O'Connor said.

Thomas Kinley, president and CEO of AAA Northern New England, said his company is expanding its insurance business because membership in Maine, New Hampshire and Vermont has grown 3.5 percent to 4.5 percent each year for the last five years, from 650,000 members in 2000 to 800,000 members in 2005.

AAA offers automobile, boat, home and so-called umbrella policies. The company has 340 employees in the three states, including about 240 in the Portland area. Kinley said he expects to hire 20 to 25 additional employees for the insurance center on Marginal Way over the next two years.

Lufkin and other city officials see AAA's expansion as a good sign for Portland as well as Bayside.

"That's corporate headquarters," Lufkin said. "That's a good business to have."

Staff Writer Kelley Bouchard can be contacted at 791-6328 or at:

kbouchard@pressherald.com