LEWISTON — Councilors moved a Lisbon Street housing project forward Tuesday night, adopting a 20-year tax-increment financing benefit for developer Nate Szanton’s Hartley Block development.

The TIF benefit, a joint development agreement and a parking agreement with the city, means that Szanton is clear to apply for Maine State Housing Authority tax credits for the project.

Szanton and his company want to develop the seven empty lots on the west side of Lisbon Street between Pine and Ash streets, constructing a five-story apartment building on the property with 63 apartment units, a mix of publicly supported affordable units and apartments with market-rate rents.

He also plans to leave space on the Lisbon Street level for retail or restaurant space.

It would replace a row of buildings destroyed by fire in 2006. The lots, between the Professional Building at 145 Lisbon St. and Centreville Plaza at 179 Lisbon St., have been vacant since then.

Councilors initially approved his plan in April and several said they were happy to see the Lisbon Street lots developed.

“We are doing a reconstruction on Lisbon Street right now and creating sidewalks in front of the new space,” Councilor Jim Lysen said. “So the infrastructure is in place. It’s one of those areas where it’s prime for development. There is not much more the city will have to contribute there.”

But Councilor Mike Lachance argued that too much public money was tied up in the project.

“At this point, we have a TIF for 20 years, federal money, state money assistance and credits,” Lachance said. “Without all that money, this is not feasible. It cannot happen. It’s not practical and the taxpayers are bearing the burden on this.”

Lachance said the proper kind of housing development in that part of the downtown would be fully private units with all market-rate rents and high-quality developments that would last.

“This project TIF is going to run for 20 years,” Lachance said. “The building will be very old in 20 years, and I can’t see it holding up. What’s going to happen downtown during that time? Because if Lewiston takes off in that time, we’re stuck with this.”

The project does include free-market rents, but the project financing relies on winning affordable housing tax credits from MaineHousing in a competitive process.

MaineHousing released new guidelines in May for housing projects that forced several changes to the project. Where it originally called for 71 single-bedroom units, the new plan is a mix of one-, two- and three-bedroom apartments. The project would have 63 units in total, 33 single-bedroom units, 20 two-bedroom units and 10 three-bedroom units.

The original plan called for 15 units with unrestricted market-rate rents. The current plan calls for 22 market-rate units and 41 units with affordable rents for lower-income workers.

The property is assessed at $129,000 by the city and Szanton had agreed to pay $152,140 for the five lots. MaineHousing’s new guidelines forced him to ask councilors to reduce the sales price to $135,000, and they agreed.

The original plan called for a 15-year Tax-Increment Financing District on the properties that would return half of the new property taxes from the development back to his company. The new plan would increase the TIF to 20 years.

Economic Development Director Lincoln Jeffers said the project would generate about $86,598 per year in property taxes when it is fully built. Lewiston and Szanton will each keep half — about $43,479 — under the TIF agreement. Szanton will also pay another $30,000 in parking fees to use the Centreville Garage for the building’s tenants.

The city would allocate $325,000 of federal HOME funds for the project, according to the development agreement.

Szanton and his group will find out if they are successful in December and would plan to begin work in June 2017 if they get funding.

The building would be finished by the summer of 2018, he said.

staylor@sunjournal.com

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