Aug. 26—Just off the main road on Great Diamond Island, on a small hill above the rest of the old Fort McKinley, sits an abandoned military hospital.
The once-bustling building has been vacant since the Army cleared out in 1947. Many of the windows are boarded up, while others are open, the glass entirely gone.
The porch roof has collapsed partially, and much of the brick building is obscured by trees and overgrown bushes that have taken root over the last 77 years.
But soon, it could be headed for a serious makeover.
Portland is selling the 5,300-square-foot building — the last one it owns at Fort McKinley — to Jonathan Miller of Hemlock House Development in North Yarmouth.
Miller said he wants to reimagine it as housing. Many of the other old fort buildings — barracks lining a parade ground — already are residences. About 100 people live year-round on the island in Casco Bay, and that number can swell to 300 in the summer.
Miller declined to share specific details about the project until he has signed a purchase and sale agreement, which he said will hopefully be within the next few months.
But he said the goal is to use historic tax credits to redevelop the property into nine condos. The hospital, built in 1903, is part of the greater 111-acre Fort McKinley Historic District, part of the National Register of Historic Places.
This would be Miller’s fifth historic property redevelopment in the state. His other projects include the Vickery, the Williams Block and the Edmund Bridge building, all in Augusta, and he was on the development team for the Grant building in Bath.
He’s drawn to historic redevelopment, he said, because creative solutions are required to meet the National Park Service program’s requirement that the historic character of a property be retained and preserved. The exterior of the building, for example, will need to be restored to the condition it was in when it was in service.
“When it’s all said and done, you have a beautiful building that wouldn’t have been restored … with new construction,” he said.
Portland put out a request for proposals in March, which said the city expected to receive fair market value for the building and land (about $375,000 according to property records) as well as $150,000 in back taxes and $30,000 in maintenance fees. That put the total at $555,000.
Miller’s offer of $201,500 was the only bid.
Greg Watson, the city’s housing and economic development director, said the property’s advanced state of disrepair makes the situation unique.
“I think the actual market value may be substantially lower than what the City is currently assessing the property for tax purposes (since we own it, no taxes are currently being paid),” he said in an email. “The City has tried multiple times to find a buyer for the site and this represents the best opportunity to move forward with an outcome that preserves the historic integrity of the property and adds value to the Diamond Cove community.”
Miller said working in a former hospital had advantages.
“Some of the historic buildings you come across are really tight to work in,” he said. “The fact that it’s a hospital architecturally gives you higher ceilings, bigger windows, a more grand building to work with. It immediately makes it more interesting.”
‘A RACCOON HOTEL’
Fort McKinley was built by the U.S. Army’s Coast Artillery Corps in 1890 as part of the national coastal defense system.
It was active during the Spanish-American War, World War I and World War II, hosting as many as 1,400 troops before the Army left it in 1947.
In its heyday, the hospital included patient rooms, an operating room, a dentist’s office and a kitchen and was staffed by a medical detachment unit and the Army Nursing Corps.
Charles Goldberg, a summer resident and tour guide for the Fort McKinley museum, said the hospital served all the Army personnel and dependents around Casco Bay, not just Great Diamond Island.
“It closed down when the base closed down, and it’s been sitting there ever since,” he said.
The fort was passed to the Navy in 1954 and then sold to private owners in 1961, according to the museum.
In 2003 the hospital went into foreclosure over unpaid property taxes.
Four years later, the hospital and the former Double Barracks were purchased by David Bateman, a Portland developer who had started buying and redeveloping other parts of the old fort in the 1990s.
Many of the fort’s former buildings are now houses or condos in the Diamond Cove Home Owners Association.
On tours, Goldberg said he points to the hospital as an example of how the entire fort looked before it was redeveloped.
The Double Barracks turned into the Inn at Diamond Cove, a 42-room luxury hotel, which opened in 2015.
But the window for the hospital to receive its transformation lapsed in 2019, and the city found itself once again in charge of the building.
It won’t be an easy project.
The structure is falling apart. The brickwork and the slate roof appear to be in good condition, Goldberg said, but it’s hard to know the state of the interior since the windows are boarded up.
“I don’t know how you’d characterize the inside except a big mess,” he said.
In the almost 80 years that it’s been empty, the city hasn’t done much other than board up the windows. The Army packed up its belongings and anything that wasn’t nailed down has disappeared over time.
“It’s pretty much a raccoon hotel now,” Goldberg said.
‘A HUGE UNDERTAKING’
It’s still so early in the process that the island isn’t buzzing with conversation, but in general, people would like to see the property developed, said MaryEllen FitzGerald, the homeowner’s association’s liaison to the city and a former board president.
Architecturally, the building is beautiful and because it’s on a small hill, has views of the water from both sides.
“People would like to see the right developer develop it who’s got a commitment to the history,” she said. “It would be nice to have what is now an abandoned shell of a building returned to a productive use.”
But FitzGerald said the road to restoration will involve more than just some drywall and a fresh coat of paint.
The Diamond Cove Homeowners Association has one of the few remaining overboard discharge licenses in Maine, FitzGerald said, and it poses huge regulatory and financial challenges.
An overboard discharge gives permission for households or businesses to discharge treated wastewater directly into the ocean if their location makes it so their waste cannot be taken to municipal sewage facilities. The Department of Environmental Protection banned most direct discharges of untreated waste in the 1970s and has regulated overboard discharges since.
Each building in the homeowner’s association has an allotment for wastewater and the additional building could pose a challenge, FitzGerald said.
And while the city owns the building, the association owns the land, so they’ll need to draft easements.
That’s on top of all the requirements from the National Parks Service.
She’s not surprised Miller was the only bidder.
“It’s a huge undertaking,” she said.
FitzGerald lives in one of the old officer’s quarters and said there are still nods to its historic roots.
There’s all the brick, designed to withstand “munitions and missiles and such,” and her house still has the original tin ceilings and much of the original woodwork.
“It’s a charming sort of walk back in time.”
It would be nice to see the same transformation for the hospital, she said.
“It’s like going back in time,” FitzGerald said. “It’s 20 minutes from Portland, but it’s 100 miles in some ways.”
Watson, the city’s housing director, said he hopes the committee can recommend the sale be finalized at the Sept. 3 meeting.
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