SOUTH PORTLAND – A group of Maine and out-of-state investors are behind the plan to lease the city-owned National Guard Armory building and transform it into a sound stage and production studio, according to Cape Elizabeth resident Eric Matheson.

Matheson, a film technician and owner of Native Sons Productions, said this week that his lawyers have the draft of a lease but that several concerns still need to be worked out with city leaders.

Matheson declined to name the issues that he feels still need to be addressed, but noted that he has some concerns with stipulations in the lease that the city is proposing. Matheson also declined to name the investors backing plans for the new production studio – which will be called Fore Rivers Soundstage.

City Manager Jim Gailey said last week that the city is in the final stages of negotiating a lease with Matheson and the unidentified investors. City leaders hope to have everything done by July 1.

The council has met several times in executive session to discuss the terms of the lease, which have yet to be disclosed. Matheson has been in talks with the city for about a year, and has presented his plans at public meetings.

City Councilor Tom Blake said the lease likely will be similar to the five-year lease that Mad Horse Theatre has with the city of South Portland on a former brick school building in Ferry Village.

Mad Horse Theatre, which is based in Portland, will have the option to buy the building at the end of its lease agreement. Matheson said he hopes to get the sound stage and production studio up and running quickly, after a lease is signed with the city.

He said he believes that the cavernous warehouse building, at 682 Broadway, is an ideal setting for building a sound stage, and that it would be easy to hang and install lights on the exposed beams.

The building is located on nearly 3 acres, next to the Portland fire station and near the Casco Bay Bridge. The city still would be allowed to store some public safety vehicles in the building, after it is leased.

The brick armory, which has a leaking roof and crumbling stone work, has been abandoned for many years. The city purchased the former armory in 2006, paying $650,000 and edging out some private investors who had expressed interest in its development.

Some city leaders had hoped to turn the armory into a new City Hall, though the idea divided the City Council and many members of the public were highly opposed to it. The city would have faced high costs to renovate and repair the building, as well as improve traffic patterns on Broadway.

A committee headed by former Councilor Kay Loring had recommended making the building a new City Hall, and the armory was opened briefly for residents to tour the inside. But no firm estimates were given on just how much it would have cost to fix up the building.

Matheson is a 45-year veteran of the film industry, and his credits include numerous big-budget films, including “Amistad” and “Empire Falls,” which was shot in Maine. Matheson builds and designs sets. His company provides film and TV production services. His business profile on LinkedIn – the career networking site – indirectly references plans for the new soundstage, noting that Matheson “soon (will) have available space for shooting exteriors and interiors … plus production facilities” for editing and sound.

Matheson, a native Mainer, is a graduate of the School of Visual Arts in New York City. He is an appointed member of the Maine Film Commission.

A deal is in the works to lease the city-owned National Guard Armory in South Portland to a group of investors that wants to turn the building into a sound stage and production studio. The building has remained empty since it was purchased by the city in 2006. (File photo)