LISBON – A proposed Tax Increment Finance district for a new Food City grocery store, Sam’s Italian Sandwich Shop and Dunkin’ Donuts is good news, selectmen said Tuesday night.

The new $2.5 million shopping mall proposed by Gendron Realty of Lewiston will replace a small strip mall on Route 196 in Lisbon Falls. The strip mall originally contained Walter Huston’s Building Materials Supply Store and now houses Mike’s Flooring, Unisim, Mad Cat Crafters, Mike’s Pub and Sandy’s Lunch.

The new mall will consist of two buildings with a total of 33,000 square feet. It would sit on 6.1 acres, and the plan has Planning Board approval. Developers are waiting for permits from the state Department of Environmental Protection and the Maine Department of Transportation, Town Manager Curtis Lunt said.

Selectmen were told the new Food City would occupy 21,000 square feet, triple its current size, and provide approximately 40 jobs. Sam’s Italian Sandwich Shop and Dunkin’ Donuts would have 15 jobs each.

Unisim is expected to move to Capital Avenue, and the town is working with other affected business owners to relocate them in town, Lisbon Development Director Dan Feeney said.

He said he expects all will be out by September, after which the building will be demolished.

The new mall will be set farther back from the road, probably at the rear of the current building’s location, a Gendron spokesman said.

Gendron Realty attorney Shawn Bell said the firm, owned by Dave and Del Gendron, has letters of intent for three of the four spaces and is currently negotiating leases. Plans call for construction to begin in October, with completion by February 2005.

There will be public hearings on the project, Lunt said, and a special town meeting probably in September to ask voters to approve the TIF proposal. Details of the proposed TIF agreement will be made available for public inspection when completed.