enlarge Gregory Rec/Staff Photographer

Mark Patterson, co-owner of Patco Construction, walks through the Stenton Trust Mill complex in Sanford, which is being auctioned on Monday. Patterson said that without tax breaks, it would be tough to develop the mill into residences.

enlarge Gregory Rec/Staff Photographer

The fifth floor of the Stenton Trust Mill offers a view of Number One Pond and western York County. But the view may be outweighed by renovation costs and outstanding bills.

enlarge Gregory Rec/Staff Photographer

The Stenton Trust Mill complex in Sanford.

enlarge Gregory Rec/Staff Photographer

The Stenton Trust building was erected in 1922, when Sanford was a bustling textile town. Its workers produced Palm Beach cloth, a lightweight fabric used in suits.

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FOR MORE information on the auction: http://www.tranzon.com/

SANFORD — From the fifth floor of the old Stenton Trust Mill, with Number One Pond below and the hills of western York County beyond, Mark Patterson could see the appeal. He could imagine urban-style loft condos in the vast, vacant textile mill, the kind that have been created or are under way elsewhere in Maine.

But then Patterson, co-owner of Patco Construction here, thought about the leaky roof. He pondered the crumbling masonry, environmental problems and grim market for the 294,000-square-foot mill complex, and it gave him pause.

"You'd be buying a liability," he said.  "What do you do with this building?"

Patterson was touring one of Sanford's old mill buildings early last week, ahead of a foreclosure auction set for Monday. Officials hope the downtown landmark that played a key role in Sanford's industrial past can become a place to work and live in the 21st century. But despite its potential, the Stenton Trust Mill will be a tough project, and it's unclear whether an investor will come forward to take it on.

The anticipation in Sanford has been experienced over the past 30 years in almost every Maine downtown that has a river running through it.

The brick factories that began sprouting up along the water's edge during the 19th and early 20th centuries – first for textiles, then for shoes – were at the heart of their communities. As those industries faded away, business and community leaders searched for ways to keep these work places vital.

Today, millions of square feet have been refilled, with new enterprises, and sometimes housing. The Sparhawk Mill in Yarmouth. The Dana Warp Mill in Westbrook. The Farwell Mill in Lisbon. The Bates Mill complex in Lewiston.

Some major spaces are being transformed, including the Hathaway Mill in Waterville. But millions of vacant or underused square feet remain, and officials say finding new purposes for them is a process that will take decades.

"You have to be creative," said Michael Baran, who heads the state's Office of Community Development.

"You have this huge space. Not all of it can be housing and retail. So you need a good strategy for mixed-use development."

Existing federal tax credits, and a recent state law that offers a 25 percent credit for fixing historic buildings, are creating incentives, according to Kristen Cady, program director of the Maine Downtown Center, a development advocacy group.

Also helpful: The trends toward green-building and a renewed desire to live closer to work, as the population ages.

"A thriving downtown has mixed uses," Cady said. "And that's what a mill redevelopment generally brings to a downtown."

The Stenton Trust Mill complex, at first named for the Goodall Worsted Co., was built in 1922, when Sanford was a textile giant. Its workers produced the popular Palm Beach cloth, a lightweight fabric used in suits and sold worldwide.

It later became known as the Stenton Trust building, following the collapse of New England's textile industry. A succession of tenants have come and gone under its current ownership, a New Hampshire development company. The building now stands abandoned, without heat, power or water.

Savings Bank of Maine, which holds the mortgage, is trying to sell it at an absolute auction. That means there's no minimum price.

The complex is assessed by the town at $828,100, but developers say that's a questionable value. Any buyer also will immediately owe back taxes, sewer and water bills totaling $68,000.

Monday's auction will be another try for the bank. Past auctions were called off, including one set for a year ago.

Potential buyers had concerns about the status of environmental cleanup work for waste materials left by former tenants. Those concerns remain.

The town estimates it will cost at least $500,000 to finish the job. In the interim, developers who have...