AUGUSTA – Gov. John Baldacci on Friday transferred ownership of the Kennebec Arsenal to a private developer from North Carolina who will revitalize the historic property with condominiums, a hotel, restaurant, retail space and a new boat dock.

In a ceremony at the 30-acre site along the Kennebec River, Baldacci and developer Tom Niemann signed documents closing the transaction. Baldacci also presented Niemann with a commemorative key to the arsenal, a National Historic Landmark.

“The historic Kennebec Arsenal already is one of those places that helps make Maine a special place,” Baldacci said. “Today begins a new chapter in the arsenal’s storied place in Maine.”

Niemann’s company, Niemann Capital, specializes in revitalizing historic properties. He has agreed to pay $750,000 for the property. The project will also receive federal, state and local tax breaks.

The granite arsenal was first authorized in 1827 and was active during the Civil War.

The first phase of the project – rehabilitation of the arsenal buildings – is expected to cost nearly $10 million. The next phase, construction of housing, could cost $15 million, Niemann said.

Niemann said his company has been talking to possible tenants who could run a hotel in the arsenal’s largest building, which has been used by the state for storage. Restaurant owners have also expressed interest in the project.

Baldacci said public access to the arsenal’s wharf, trails and waterfront area will be preserved, and historic preservation covenants will ensure that the site will keep its character for future generations.

The arsenal was built during a border dispute with Canada and completed in 1831. It was active during the Mexican and Civil wars, but grew silent in later years, and by the time of the Spanish-American War was manned by only a skeleton crew.

After the Army turned the site over to the state in 1905, it was used for a time to house patients from the state mental hospital. For three decades it has been vacant and neglected.