Staff Writer 

Since 1999, the 120,000-square-foot office building on Running Hill Road in South Portland – purchased by the Dead River Real Estate Company for $15 million in October 2006 – has housed the East Coast Headquarters for the international company Fairchild Semiconductor.

And it’s going to stay that way.

Six months after New England Expedition spokesman Gene Beaudoin announced the company’s intent to build a 90,000 square foot, $25 million Leadership in Energy and Environmental Design (LEED) silver certified office building across from the new Cabela’s store – as was reported in the Sentry and Leader in June and July – they are negotiating a new lease agreement with the Dead River Real Estate Company to stay on Running Hill Road.

“There has not been any finalization but we could be here potentially for the next five years,” Fairchild Semiconductor spokesman Patti Olsen said. “It’s all up to negotiation at this point.”

Now, Beaudoin is negotiating with several “medium-sized” tenants to develop the site where construction of the Fairchild building should have begun in October. 

“[Fairchild] signed a lease before the banking crisis,” he said. “We didn’t plan for the amount of time it takes to get lenders to act. Fairchild had a window of [Dec. 31] to back out and they did. We’re very disappointed, but these are very difficult times.” 

Canceling the move certainly wasn’t due to disapproval by town officials, many of whom overwhelmingly supported the project. Last summer, Planning Board Chairman Paul Allen said he would have voted to exempt the Fairchild building from traditional town design standards and the town council unanimously approved amendments to a credit enhancement agreement with New England Expedition allowing them to collect $8 million through a Tax Increment Finance district (TIF) during the next 10 years although they were more than $20 million below a $55 million threshold investment in the Haigis Parkway to receive the funds. 

“It has been a tough economic year,” former Town Council Chairman Jeff Messer previously said. “Clearly the intent to develop beyond Cabela’s is there.”

A special town council meeting concerning the same New England Expedition credit enhancement agreement was canceled last week. Beaudoin failed to return calls prior to the Sentry and Leader deadline.

Scarborough Economic Development Corporation (SEDCO) President Harvey Rosenfeld said Fairchild isn’t the only company passing on Scarborough’s Haigis Parkway.

“We had another big project scheduled and they opted to stay where they are,” he said. “We’re not seeing a lot of cancellations of projects but a lot of postponing. Hopefully we’ll see them come back.”

While Rosenfeld said he “would have loved to have” the 90,000 square foot LEED building included in the development of the Haigis Parkway, several smaller tenants on the site may be closer to what the town had initially envisioned. Beaudoin said all future structures surrounding the 8,600 square foot KinderCare building will still be LEED certified.

“The original plan was to have a whole assortment of buildings,” he said. “The turnaround of [the national economic decline] will be interesting to see. We may discover there is a pent up need to develop new space and we’re ready to go.”

South Portland Assessor Elizabeth Sawyer said the city will continue to collect roughly $241,000 in real estate taxes from the 12-acre Running Hill property regardless of Fairchild’s move to Scarborough. Had they moved to Scarborough, the city would have been able collect any business equipment or personal property tax – an $80,000 revenue for the city in 2007 – for as long as it remained vacant, she said.