LEWISTON — Ken Tubbs was looking for a good investment, and back in 2001, real estate seemed like a pretty good idea.
Lewiston seemed like a great place to start.
"I figured, if you buy a piece of income property and you get it full, it's going to pay for itself," Tubbs said. "Then, down the road, you sell it and you make a little bit of profit."
But that's not the way it turned out. Unable to pay the mortgage and other bills for his 305 Bates St. apartment building, Tubbs walked away from the property. The city condemned it in October 2009. And on March 20, the City Council decided to take down the building.
It's a shame, Tubbs said, because it was a good building at one time.
"It was straight, too, for a building that old," he said. "It's amazing how the people who built those buildings, back in the day, built them on those hills with brick and stone foundations. And they were straight as can be."
Demolition is the city's last tool for dealing with failing buildings and a rising vacancy rate in the downtown.
And Lewiston has a lot of vacant apartment buildings in its downtown. High heating oil costs and other expenses, coupled with the burst housing bubble, have combined to leave 20 percent of the available housing units vacant.
"I think people who are well-connected with the downtown are surprised at how many vacancies we have," said Gil Arsenault, Lewiston's code and planning director.
It's not the first time Lewiston has had high vacancies and abandoned buildings downtown — and has responded the same way. It happened after the savings and loan crisis of the early 1990s left a lot of vacant buildings.
Some buildings the city purchased outright, others the city took over when the owners stopped paying their property taxes. The rest were in bad enough shape that the city condemned them.
"It tends to hold down the market, when you have that kind of a vacancy rate," Arsenault said. "That's why we condemn buildings. If we were out of the picture, you might think you can just pay so much and put Band-Aids on a building and start charging rents. But if it's condemned, you know the city is going to make you put a significant investment in, so you can't pay $75,000 for that building. You might bargain down to $40,000, make those improvements and have a chance."
Buildings that couldn't attract buyers were torn down.
"A lot of the missing teeth you see around town came from that," Arsenault said. "Potvin Park, down in Little Canada, was all buildings at that time. And those all came down."
Jeff Baril, the city's police- and code enforcement liaison officer, said he thinks things might be worse today. Many of the downtown's apartment buildings are at least 100 years old and they haven't been updated since the last economic downturn.
Owners who paid premium prices during the height of the 2000s housing bubble watched their investments' value evaporate in 2008.
Meanwhile, costs to operate the buildings have gone way up.
"Just 10 years ago, you could buy heating oil for $1 per gallon," Baril said. "Now it's up past $3.60 per gallon. The landlords that I know who gave up were buying 100 gallons every 10 days. That's 300-plus gallons a month."
Add in taxes, trash collection fees and other utilities to the expense side, then remove vacant units from the revenue side, Baril said.
"So the monthly income from the rents can't even cover the heat," he said. "You are in a deficit every month in the winter, and you might break even for a few months in the summer. That leaves very little left over for repairs, and the building just gets worse."
That was Tubbs' situation in November 2008 when he stopped paying the mortgage. He owed mortgage holder Deutsche Bank $185,652, according to a March 2010 foreclosure filed by the bank.
"The most difficult part for me was the tenants themselves," Tubbs said. "They all have a great story when they want to move in. But very few stay very long, and before they leave they stop paying and just squat for a good month or so."
Eviction laws make it tough to get rid of problem tenants, he said.
"They say, 'You can keep that security deposit I paid,'" Tubbs said. "But that's supposed to be there for all the damage they did."
The Bates Street building was one of several Tubbs bought in 2001 and 2002, but the last one he still held on to. Deutsche Bank filed a motion to foreclose in March 2010, but didn't do anything about it. It was eventually dropped, according to court records.
Code Enforcement Officer Tom Maynard told city councilors at the March 20 meeting that the building was in dreadful shape. Thieves had broken in and removed all of the copper, including the plumbing and electrical circuits. Draining water from those broken pipes had eroded the structure and turned the basement into a breeding ground for mold. Interior stairwells had fallen apart.
Exterior fixtures — including stairs, sills, siding and window trim — had fallen off. And neighbors had begun using the property as a dump, pushing old couches and mattresses in the building's broken windows and filling the yard with garbage.
"Someone used it as a dump and left swimming pool chemicals in the basement — chlorine or something," Maynard said. "That's not only dangerous but toxic and caustic, as well."
Councilors at the March 20 meeting agreed, voting unanimously to slate it and another property at 10 College St. for demolition.
The city will move quickly on both properties, Arsenault said. After a 30-day waiting period, the work will go out to bid. Crews should begin tearing down the buildings by June.
"It's certainly not the last one they'll see," Arsenault said.
Councilors are scheduled to review three more properties at their April 3 meeting and decide whether they need to be demolished. The city set aside $250,000 in the current budget to condemn and demolish buildings and is asking for another $250,000 to continue the work next year.
"It's a constantly changing situation," Arsenault said. "Sometimes we work with a building and are set to demolish it, but then someone steps in takes responsibility. But the important thing is, one way or another, we are making headway."