The largest municipality in Hancock County, which has seen some of the most significant population increases in Maine over recent decades, continues to embrace development, even as some of its neighbors are guarding against it.

The growth of middle-income housing in Ellsworth has been hot in recent years, as the costs of real estate and housing in Maine have increased dramatically. But, just as new retail dominated the city’s growth in the 1990s and 2000s, the local development landscape continues to evolve. 

Charles Pearce, Ellsworth’s city manager, hopes that housing remains at the forefront of further development in the coming years. Recruiting new residents to the city, as Maine’s population grows, is a key part of the city’s strategy for growth and for spreading out the city’s property tax burden, he said.

“New growth is the lifeblood of rural communities,” Pearce said, adding that in the past five years Ellsworth’s citywide valuation has increased from $1 billion to $1.6 billion. If the city’s population continues to grow, he said, “pretty much all of our economic development and community development issues get solved.”

Ellsworth has long been considered the primary service center in Hancock County, and for much of western Washington County as well. For that reason, much of its past growth has focused on commercial and retail development aimed at serving residents of both counties, which cover a combined area larger than Connecticut.

But as Hancock County’s population has grown, and as some significant development proposals have surfaced in nearby communities, some of Ellsworth’s neighbors have been pushing back against large-scale growth. In the past year, Bar Harbor has put a temporary halt on all new transient lodging development, Lamoine has banned resorts and glampgrounds, and Blue Hill has rejected a proposal to subdivide a 38-acre blueberry barren into high-end house lots.

In Ellsworth, on the other hand, there’s been little opposition to development proposals other than occasional objection from immediate neighbors. 

A Home Depot, a Walmart Supercenter, a Hampton Inn and a 200,000-square-foot mouse production facility for The Jackson Laboratory all have been developed in the city since 2000. And work is expected to begin soon on a new 83-room hotel and a separate project to build a Dysart’s convenience store and car wash on a 2.8-acre lot.

Ellsworth officials gather Thursday morning at a property off High Street where the city plans to extend Merrill Lane to a site that the state intends to develop as a new judicial center for the state court system. Pictured from left to right are Highway Foreman Brian Moon, City Manager Charles Pearce, Deputy City Manager Sara Devlin, and Public Works Director Mike Harris. Credit: Bill Trotter / BDN

A new $55 million state courthouse, which city officials say could lead to adjacent properties being developed, also is being planned for a 17-acre parcel behind Merrill Furniture. 

The city has taken on an active role in this project. First, Ellsworth helped negotiate a land swap between the property owner and the state, after the state had met fierce local opposition when it previously proposed a different location for the courthouse on Surry Road. 

Secondly, the city agreed to build a quarter-mile access road to the site so the state would not have to bear that cost, but also to encourage nearby development. Without going into detail, Pearce said the city has heard from other developers who seem interested in building along the access road.

All of these Ellsworth projects have been or will be developed along the city’s commercial High Street corridor, where there also are two high density housing proposals that have been approved by the city but have yet to break ground. City officials say these projects could help provide upwards of 2,000 additional housing units that Hancock County will need by 2030 to accommodate population growth.

A 36-unit condominium development is proposed for the south end of Beals Avenue, where the street connects with High Street, and approximately 150 townhouse-style apartments are planned for a lot off Eastward Lane, roughly a half-mile from where Downeast Highway branches off High Street. 

The Beals Avenue proposal has run into appeals from neighbors, while the Eastward Lane development is waiting on approval by the state.

Dan Black, one of the partners in the Beals Avenue proposal, said an appeal filed by neighbors — who raised concerns about traffic and impacts on the city water and sewer lines — has been denied by Ellsworth officials because it was not filed in a timely manner. But he said he is working with the city to ensure that upgrades are made to those utilities in conjunction with his project being built.

Black said he is not sure when the project will move forward, as he is working with Maine State Housing Authority to help fund the development, which will be reserved for year-round residents. He said his company, LB Development Partners, is looking to line up buyers in advance while it tries to secure additional gap funding to help fully finance the project.

“We want to work with people who want to live and work in Ellsworth,” Black said. “We’re seeing a lot of support from the city and community groups.”

Scott Pelletier, owner of the 121-acre property off Eastward Lane, said he hopes to get approval for his housing project from the Maine Department of Environmental Protection later this year. His company, W.L. Properties, wants to build 27 apartment buildings, each with 4 to 8 units, on the undeveloped lot behind Eastward Bowling Lanes.

Given all of those projects, some players in the construction industry see Ellsworth as a place of opportunity.

Hughes Bros., a Hampden-based concrete and sitework company, opened a new concrete plant in the city just over a year ago, in February 2024.

Janet Hughes, vice president of Hughes Bros. Inc., said the company was getting increasing business in the Ellsworth area. In response to that demand, and to cut down on the time and energy it was spending on driving concrete from 30 miles away in Hampden, it built a new plant off Bucksport Road in Ellsworth at 22 McMullen Way off Bucksport Road..

“We felt growing in that direction would be good for us,” she said.

But despite all of the momentum and need for new housing, developers working in Ellsworth also noted some challenges to further growth.

Hughes said the Hancock County plant has done good business, but it’s largely seasonal because of the difficulties of pouring concrete in the winter. The company is looking to fill five positions this summer — four concrete truck drivers and one loader operator — to keep up with anticipated demand.

Hughes Bros. employs approximately 50 people, and takes on another 10 or so seasonal employees when construction projects increase in the summer, she said — noting that housing is not the only item in short supply.

“Our materials division is about half our staff, but the labor market is tight,” she said.

Pelletier, who bought the Eastward Lane property in 2022, said he is not worried about volatility in the stock market, or talk about tariffs interfering with that project. But he noted that it can be challenging to secure regulatory approval, as well as financing for larger projects such as his. 

“There’s plenty of demand” for housing in the Ellsworth area, he said. “But we don’t have many large banks in Maine.”

Jonathan Bates has built several market-rate apartment buildings in Ellsworth over the past decade but is pursuing different kinds of projects now. He said that despite continued demand for new middle-market housing in Ellsworth, the cost of construction and maintaining an apartment building is outstripping the rents that tenants will pay. It doesn’t make sense to build apartments if the rents he will collect from them aren’t enough to pay off his construction loans, he said.

“It’s really disappointing,” Bates said of turning away from apartment development. “Ten years ago it was fun, but the numbers now are so upside down.”

Bates said his company, Stone Park Properties, has focused instead on building high-end homes on waterfront properties, often in Deer Isle and Camden, and redeveloping properties into short-term rentals, which have more viable returns on investment. He said he also has non-residential projects in Ellsworth he is pursuing.

“It’s harder and harder to make the numbers work,” Bates said. “It’s frustrating because the [housing] demand is there.”