A rendering shows the Continental Mill apartments planned at 2 Cedar St. in Lewiston, as seen from Oxford Street. Plans call for 377 market-rate apartments, including studio and one- and two-bedrooms, in two phases. The estimated cost is $80 million. Submitted photo

LEWISTON — The City Council unanimously approved a tax-increment financing deal with developer Chinburg Properties this week for the 377-unit Continental Mill redevelopment.

City officials said the agreement was necessary to make the market-rate project viable, especially because it will renovate one of the state’s largest historic former mills at Lewiston’s riverfront gateway.

The terms of the agreement state that in each phase of development, Chinburg will be reimbursed 80% of new taxes paid for the first 10 years and then 50% for the next 10 years. Over the life of the TIF, roughly $9 million in new tax revenue would be returned to Chinburg, with the city retaining nearly $6 million.

The Picker House Lofts apartments in the center of the former Continental Mill, middle, is seen June 3 between Cedar Street and the Androscoggin River in Lewiston. Of the 72 new apartments expected to be ready next year, 46 will be  workforce and 26 will be market rate. The remainder of the mill will be developed by Chinburg Properties into 377 market-rate apartments, along with commercial space. That phase is expected to be ready by early 2027. Russ Dillingham/Sun Journal

According to city staff, phase 1 would be 200 units, with 177 in phase 2. The agreement doesn’t recognize the new value until 2028, which is when the first phase is expected to be complete.

The 427,000-square-foot building at 2 Cedar St. was purchased by Chinburg in 2019, raising optimism at City Hall that yet another aging mill could be repurposed. The Planning Board approved the site plan in June.

As with several other housing projects or mixed-use developments recently approved, economic development staff have said market-rate rents in Lewiston do not support the full cost of development, and TIFs can provide much-needed tax revenue, housing and economic activity.

Some have argued against the city’s recent use of TIF’s for most projects, including resident Matt Agren, who said Tuesday that Lewiston is “slowing our own development” by using them. However, city staff pointed out Tuesday that without the development, the property would yield $274,000 in taxes over the next 27 years.

Chinburg was also lauded as a developer that has proven it can successfully redevelop former mills.

Prior to the council’s vote Tuesday, Councilor Josh Nagine said the Continental Mill is “a historic structure within our community and a huge undertaking for anyone to develop.”

“Chinburg is possibly the only organization that works within our region that has a proven track record of showing they are capable of taking these giant historic structures and turning them into centers for commerce and public life,” he said. “Some people look at it as hard to swallow, but they are huge, difficult to finance, and this project in particular only a few folks are capable of doing it.”

Mayor Carl Sheline said it’s hard to comprehend the size of the mill. He said prior to construction starting on the Picker House Lofts — a 72-unit, mixed-income apartment complex at the center of the property — it was “likely the largest empty building in Maine.”

“It’s really exciting to see this project come together. It’ll be an amazing improvement for our city,” he said.

The Picker House, developed by the Szanton Co., is expected to start welcoming its first tenants in February 2025.

On top of market-rate housing, the development plan also includes 45,000 square feet of commercial space. As part of the agreement, Chinburg will provide an easement to allow an extension of the riverfront trail, and the city will invest roughly $1 million in public infrastructure.

Those projects include removing a dilapidated bridge over the lower canal, creating a paved walkway from Oxford Street to Lincoln Street along cross canal no. 3, building a canal overlook at the southern end of the lower canal, and clearing overgrowth and installing new fencing along the canal.

The city has also agreed to lease 280 parking spaces in municipally-owned garages, including the Chestnut Street Parking Garage, or lots near the project.

According to the TIF details, the new assessed value after phase 1 is complete is estimated at $19.5 million, and $40.1 million following phase 2. The total cost of the redevelopment is estimated at $80 million.

Officials said creating the TIF also shelters a portion of the new assessed value from county tax and the state aid to education model that is based partially on a community’s total valuation.

The city is estimated to receive $5.88 million in new tax revenue from the district, of which nearly $1.28 million will be used for municipal debt associated with the project, and $4.60 million will be new General Fund tax revenues over the term of the TIF.