The Continental Mill along the Androscoggin River in Lewiston is seen on May 1, 2019. Sun Journal file photo
LEWISTON — The City Council signed off on a tax increment financing district Tuesday for a 72-unit mixed-income housing project in part of the Continental Mill along the Androscoggin River.
The creation of the district, as well as an agreement with developer Szanton, is the first major step for the redevelopment of the mill, considered by city officials as a “linchpin” in the redevelopment of Lewiston’s riverfront island area.
According to officials from Szanton, which operates two rental housing properties in the city, the project will kick off redevelopment activity at the mill, after mill owner Chinburg Properties agreed to sell a part of the building to Szanton.
The project, dubbed Picker House Lofts, will consist of 46 units of workforce housing and 26 units of market-rate housing with of a mix of one-, two- and three-bedroom units.
The TIF will create a 23-year district, with the city retaining all tax revenue during the first three years, and Szanton receiving 75% of captured tax revenue between years four through 13. In each year following, the amount returned to the developer will decrease by 3% each year until year 23.
According to a city memo, development costs for the project are estimated at a minimum of $16.8 million. To be financially viable, Szanton is also applying for federal Low Income Housing Tax Credits through MaineHousing.
The memo estimates that the developer will receive a total of $1.5 million over the TIF term, with the city receiving roughly $870,000.
On Tuesday, developer Nathan Szanton said that with current construction prices, the project has a financing gap of about $1 million, and that with the TIF, the development could take on additional debt.
He said TIF funds do not simply end up in the pockets of developers, and are used to fill “the gap between the costs to build a project and the resources we have to build it.”
“We would love to be part of bringing alive the Continental Mill,” he said, adding that his company has tried for years to purchase part of the building. He said when Chinburg Properties bought it, they began talks.
Chinburg has its own development plans for the mill, including market-rate housing and commercial uses. City officials have high hopes that the Szanton project can “get the ball rolling.”
According to a memo from Lincoln Jeffers, director of economic and community development, staff level discussions have begun with Chinburg to establish an easement along the river side of the Continental Mill for construction of a riverfront trail, and the company is working with Szanton on parking and other site needs. According to the memo, Chinburg plans to do market-rate housing in the north and east buildings, and commercial development in the waterfront and southern buildings.
The Szanton project would be in the center of the complex, and if approved by the Planning Board, is slated to be completed by fall of 2023.
While the TIF district received support from the majority of councilors, Councilor Luke Jensen said he didn’t agree that workforce housing — rents limited to between 50% and 60% of area median income — is the best fit for an area that he believes can be home to more high-end development.
Jensen said “niche restaurants” wouldn’t be supported by people at those income levels.
“I really see an opportunity with the riverfront,” he said. “As far as the future of Lewiston, I don’t see this as fitting in well with the city’s best interests.”
According to a Szanton document, 60% of the area median income is about $42,000.
Mayor Mark Cayer disagreed, stating that people at that income level can afford to dine in restaurants, and that the city has “other opportunities for market-rate housing in that area.”
Szanton said if someone earning $40,000k a year is paying $300 less on average than they would in other market-rate housing, “that’s $300 more a month into the local economy.”
Councilor Alicia Rea said, “It takes a couple of projects to get the ball rolling. We don’t want to price out the folks who are already here.”
Votes on both the TIF district and agreement were 6-1, with Jensen opposed.
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