Motorists heading east on I-395 in Brewer can see it up on Whiting Hill: a prominent, five-story office building overlooking the landscape of eastern Maine. What they canÕt see behind the $20 million Cianchette Building, the new corporate home of Eastern Maine Healthcare Systems, is a 72-acre business park that represents some of the latest economic aspirations for the Bangor-Brewer area.

Earlier this winter, Eastern Maine Healthcare announced plans for a $42 million building in the Brewer Professional Center, the name of the business park. The new structure, expected to open in 2009, will house a cancer care center and the Maine Institute for Human Genetics and Health.

The institute is a collaboration among Eastern Maine Healthcare, the University of Maine at Orono and the Jackson Laboratory in Bar Harbor. Research there will focus on aging and chronic illness.

The growth of biomedical research in a city once defined by the now-closed Eastern Fine Paper Mill is emblematic of the changes under way in MaineÕs third largest metropolitan area.

ÒThatÕs the kind of growth this region is looking for and hoping to develop,Ó said Craig Holland, an economic analyst at the Maine Department of Labor.

Research and technology have the potential to help replace traditional factory jobs, Holland said, and to diversify a service-center economy where retail growth is the most visible sign of transformation. They can contribute to the well-being of a region thatÕs seeing slow but steady growth and benefiting from an unemployment rate that has been hanging just over 4 percent, in line with the state average.

But this encouraging picture has some cloudy edges.

High energy costs. Transportation concerns. An unrealized potential for more trade with eastern Canada. Long-standing concerns, they represent challenges for the future.

The Bangor area has long been the commercial center for the stateÕs northeast and central regions, for shopping, banking, entertainment and health care. Recent trends have underscored that relationship.

Some notable developments: After operating in a temporary location, the Hollywood Slots racino is building a $70 million slots facility in downtown Bangor, which will include a parking garage and hotel. A LoweÕs home improvement store is coming to Brewer, and another may locate on Stillwater Avenue in Bangor. Nearby, Wal-Mart is building a new supercenter. A $12 million regional shopping center called Bangor Parkade has opened near the Bangor Mall, with a KohlÕs department store as an anchor. More than 300 jobs are tied to the complex. L.L. Bean is operating a 30,000-square-foot call center in Bangor that employs more than 600 workers during peak times.

NEW USES FOR OLD SPACES

Shopping and entertainment growth seems to happen without much coaxing, officials say. A more pressing challenge is to attract higher-paying research and technology jobs, and redevelop dormant manufacturing space.

ÒItÕs about connecting the dots,Ó said Jack Cashman, economic adviser to Gov. John Baldacci.

A good example: the Georgia-Pacific paper mill in Old Town had 400 employees when it closed last year, leaving 350,000 square feet of vacant manufacturing space. Now itÕs being occupied by Red Shield Environmental LLC, which plans to convert part of the old pulp mill into a cellulose-based biofuel facility, in a partnership with nearby University of Maine researchers who specialize in wood composites.

ÒWe want to work with the university to commercialize that facility,Ó Cashman said.

Cashman and other officials hope up to 1,000 new workers will occupy the old paper mill over the next five years.

Some of them will work for Hallowell International LLC. The Bangor-based company makes an innovative, air-source heat pump thatÕs efficient in cold climates. It recently started selling a residential-sized unit in 18 states and Canada. The company is developing a commercial unit and hopes to start producing it later this year in Old Town.

ÒThe Bangor areaÕs a great hub,Ó said Duane Hallowell, the companyÕs president and chief executive officer.

The cityÕs proximity to Canada makes it easier to enter a promising market for heat pumps in Quebec, Hallowell said. And the resources available at the University of Maine also helped Hallowell when he started his company, in the form of engineering support from the schoolÕs Advanced Manufacturing Center.

The university connection has helped Hallowell recruit workers. The company has 14 employees, mostly engineers and technicians. Several were Maine graduates who were living out of state. But skilled labor remains an issue.

ÒGetting white-collar workers is difficult,Ó Hallowell said. ÒSometimes the talent we need is hard to find here.Ó

SOME COSTS ARE HIGHER

Energy costs also are a concern, as they are statewide. But Bangor Hydro-ElectricÕs power rates are among the highest in the state; homes and small businesses pay combined rates of roughly 17 cents per kilowatt hour.

Air fares are higher, too; Delta Air Lines and US Airways account for 60 percent of the passengers at Bangor International Airport, and there is no discount carrier there.

Despite years of talk and meetings aimed at promoting better transportation and trade links between the area and Atlantic Canada, there hasnÕt been enough real progress, in the view of some officials.

ÒIt hasnÕt produced the exchange weÕd like to see,Ó Cashman said. ÒBangor should be getting more out of its location.Ó

Canadian aspirations aside, the area is looking for other ways to make itself attractive to outside investment. The Brewer Professional Center is a good example, according to DÕarcy Main-Boyington, the cityÕs economic development director. The focus on health care and research can create the critical mass to attract more biotechnology firms.

Brewer also is trying to reinvent itself in a highly visible way at the former Eastern Fine Paper Mill. A North Carolina development firm with experience redeveloping defunct mills is trying to turn the property into a mixed-use project, with homes and businesses on the Penobscot River.

Living or working in a riverfront mill complex, Main-Boyington said, creates a environment that can help draw young people to the area. ThatÕs critical to maintaining the labor force needed to support the businesses of tomorrow.

Staff Writer Tux Turkel can be contacted at 791-6462 or tturkel@pressherald.com