LEWISTON — The City Council approved key financing pieces for the first phase of the Choice Neighborhoods development Tuesday, as the developers look to finalize construction details.

Officials approved a tax-increment financing district and $450,000 in federal HOME funds for the 82-unit development that spans an entire block of the downtown Tree Streets neighborhood.

The financing was requested by developers and city staff in order to close a funding gap caused by high construction costs, which have grown 39% since 2020.

Councilors voted unanimously in support of the financing, with several stating that they recognize the importance of the overall project. The Choice Neighborhoods effort, buoyed by a $30 million grant, is meant to replace distressed housing while investing in child care, health care and workforce development programs to address high rates of poverty and childhood lead poisoning.

Misty Parker, economic development manager, said the first phase of construction, which includes eight buildings on Pine, Bartlett, Walnut and Pierce streets, is more costly due to its layout and design as a more family-focused lower density development.

It includes six three-story buildings and two four-story buildings. The first phase of work will consist of 42 units that are considered a “replacement” of distressed public housing, as well as 18 workforce units and 22 market rate units. The development also includes a historic renovation of the Wedgewood house.

While councilors were in favor of the proposal, some have questioned the price tag.

Councilor Larry Pease said the “dollar amount is a little ridiculous,” and that he’s concerned that a year or two from now the council will be asked for more funding.

Parker said some of the cost increases are related to code requirements while others are part of the higher standards of housing that the Choice Neighborhoods program is designed for. The entire project is an investment of some $40 million, she said.

“There really is a focus on what the end product is,” she said, adding that the units will have amenities you don’t typically see in other similar projects.

The TIF will return 50% of the increased tax revenue from the properties to the developer over the first 16 years, resulting in roughly $1.3 million.

Mayor Carl Sheline said the project will be “a game changer for our city.”

Parker said Lewiston Housing, the lead developer on the project, is securing financing now and plans to secure contracts for construction this winter.

Lincoln Jeffers, director of economic and community development, said the federal HOME funds were always anticipated to be used toward the project, but not all at once. He said the vote Tuesday was a “preliminary award” that gives the developer and its lending partners “assurance that this funding is there.”

Councilor Linda Scott said she’s “happy” to support the project and see it move forward, but that she’s hoping the city can also use HOME funds toward other new projects.

The council on Tuesday also approved a new mural related to the Choice Neighborhoods program that will go on the Public Theatre building on Maple Street.

The mural, by Tennessee artist Nathan Brown, was recommended by the city’s public art committee, and will highlight the city’s arts and culture. The artist has worked with the Public Theatre on the design, which gives nods to music, acting and dance in the city.

Councilors were supportive, stating that its location, on the backside of the theater facing Lisbon Street, will provide a colorful gateway to the city.

Parker said funding comes from the city’s initial Choice Neighborhoods planning grant, which provided $1 million in funding that has since led to neighborhood improvements like McGraw Park and other public art.

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