Right on the main road of Great Diamond Island, on a small hill above the remains of the old Fort McKinley, there is an abandoned military hospital.

The once busy building has been empty since the army withdrew in 1947. Many windows are boarded up, others are open and no longer have any glass panes.

The canopy has partially collapsed and the brick building is mostly obscured by trees and overgrown bushes that have taken root over the past 77 years.

But a comprehensive transformation could soon take place.

Portland is selling the 55,000-square-foot building – the last one it owns in Fort McKinley – to Jonathan Miller of Hemlock House Development in North Yarmouth.

Miller said he wants to repurpose it as a residential building. Many of the other old fort buildings – barracks along a parade ground – are already residential. The island in Casco Bay is home to about 100 people year-round, and in the summer that number can rise to 300.

Miller declined to disclose specific details about the project until he signed a purchase agreement, which he said will hopefully happen in the next few months.

However, he said the goal is to use historic tax credits to convert the property into nine condominiums. The hospital, built in 1903, is part of the 111-acre Fort McKinley Historic District, which is listed on the National Register of Historic Places.

This would be Miller’s fifth historic building renovation in the state. His other projects include the Vickery, Williams Block and Edmund Bridge buildings, all in Augusta, and he was on the development team for the Grant building in Bath.

He was drawn to historic restoration, he said, because creative solutions are needed to meet the National Park Service program’s requirements to preserve and maintain the historic character of a property. The building’s exterior, for example, must be restored to the condition it was in when it was in use.

“Ultimately, you have a beautiful building that would not have been restored if it had been rebuilt,” he said.

Portland issued a request for proposals in March, saying the city expected to receive the market value of the building and land (about $375,000 according to the land registry), plus $150,000 in back taxes and $30,000 in maintenance fees, bringing the total to $555,000.

Miller’s offer of $201,500 was the only bid.

Greg Watson, the city’s director of housing and economic development, said the property’s advanced condition makes the situation unique.

“I believe the actual market value could be significantly less than what the city is currently assessing for tax purposes (since we own the property, no taxes are currently paid),” he said in an email. “The city has attempted to find a buyer for the property on multiple occasions and this is the best opportunity to achieve an outcome that preserves the historic integrity of the property and provides value to the Diamond Cove community.”

Miller said working in a former hospital has advantages.

“Some of the historic buildings you come across are really cramped to work in,” he said. “The fact that it’s a hospital architecturally gives you higher ceilings, bigger windows and a grander building to work in. That immediately makes it more interesting.”

“A raccoon hotel”

Fort McKinley was built in 1890 by the U.S. Army’s Coast Artillery Corps as part of the national coastal defense system.

It was active in the Spanish-American War and World Wars I and II, housing up to 1,400 soldiers before the Army abandoned it in 1947.

At its peak, the hospital had patient rooms, an operating room, a dentist’s office, and a kitchen, and was staffed by a medical department and the Army Nursing Corps.

Charles Goldberg, a summer host and tour guide at the Fort McKinley Museum, said the hospital not only serves all Army personnel on Great Diamond Island, but also their dependents around Casco Bay.

“It was closed when the base closed and has been there ever since,” he said.

According to the museum, the fort was handed over to the Navy in 1954 and sold to private owners in 1961.

In 2003, the hospital was foreclosed on due to unpaid property taxes.

Four years later, the hospital and the former Double Barracks were purchased by David Bateman, a Portland-based developer who had begun buying up and renovating other parts of the old fort in the 1990s.

Many of the fort’s former buildings are now homes or condominiums owned by the Diamond Cove Home Owners Association.

During tours, Goldberg said, he points to the hospital as an example of what the entire fort looked like before its renovation.

The Double Barracks became the Inn at Diamond Cove, a 42-room luxury hotel that opened in 2015.

But the window for redesigning the hospital expired in 2019 and the city had to take responsibility for the building again.

It will not be an easy project.

The building is falling apart. The brickwork and slate roof appear to be in good condition, Goldberg said, but it’s hard to judge the condition of the interior because the windows are boarded up.

“I don’t know how you would describe the inside other than a big mess,” he said.

In the nearly 80 years the building stood empty, the city didn’t do much except board up the windows. The army packed up its things and everything that wasn’t nailed down disappeared over time.

“It’s pretty much a raccoon hotel now,” Goldberg said.

“A huge undertaking”

It’s so early in the process that there isn’t much discussion going on on the island, but by and large, people would welcome development on the property, says MaryEllen FitzGerald, the homeowners association’s liaison to the city and former board chair.

The building is architecturally beautiful and since it is located on a small hill, it offers views of the water from both sides.

“People want the right developer to develop it, one who is committed to the history,” she said. “It would be nice to see what is now an abandoned shell of a building brought back to productive use.”

However, FitzGerald said the restoration will require more than just some drywall and a fresh coat of paint.

The Diamond Cove Homeowners Association holds one of the few remaining overboard discharge licenses in Maine, FitzGerald said, and that presents enormous regulatory and financial challenges.

An overboard discharge gives households or businesses permission to discharge treated wastewater directly into the ocean if their location makes it so that their waste cannot be taken to municipal wastewater treatment plants. The Department of Environmental Protection banned most direct discharges of untreated waste in the 1970s and has regulated overboard discharges since then.

Each building in the homeowners association has a sewer portion and the additional building could pose a challenge, FitzGerald said.

And while the city owns the building, the land belongs to the association, which must therefore establish easements.

In addition, there are all the requirements of the National Parks Service.

She is not surprised that Miller was the only bidder.

“It’s a huge undertaking,” she said.

FitzGerald lives in one of the old officers’ quarters and said there are still hints of his historical roots there.

There are plenty of bricks designed to withstand “munitions, rockets and the like,” and their house still has the original tin ceilings and much of the original woodwork.

“It’s a charming kind of walk back in time.”

It would be nice if the hospital could undergo a similar transformation, she said.

“It’s like going back in time,” FitzGerald said. “It’s 20 minutes from Portland, but in some ways it’s 100 miles.”

Watson, the city’s housing director, expressed hope that the committee could recommend a final decision to sell at its Sept. 3 meeting.

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