BATH — The City Council is scheduled Aug. 5 to vote on an affordable housing tax increment financing district for a proposed rental housing complex at the former John E.L. Huse Memorial School.
The Szanton Co., based in Portland, wants to develop nearly 60 mixed-income residential apartments in the 73-year-old Andrews Road building, with almost half in a new northeast wing.
Szanton has a contract to buy the building and surrounding land. The property would be subdivided into a municipal band building and ball fields, to be retained by the city, and the 2.49-acre Huse School lot, which Szanton would own.
The company expects to know by December if its MaineHousing affordable housing tax credit funding application is successful. If so, it could close on the property in late spring 2016, and open the new apartments a year later.
If Szanton does not receive the credits, its agreement with the city would be extended a year to allow a second application in October 2016, with a closing in spring 2017.
The TIF – which drew little, but all positive comment at the council’s July 15 meeting – does not make Szanton eligible for the tax credits. But the three points MaineHousing awards for having a TIF would “significantly strengthen” the company’s application, Szanton project manager Andy Jackson has said.
Just three points separated the top-scoring project from the lowest-scoring project to receive funds in last year’s funding round, Jackson said, emphasizing the importance of the three points a TIF can net.
The terms of the credit enhancement TIF agreement call for Szanton to be refunded half its property taxes for 15 years. Still, the fact that the now city-owned property would be on the tax rolls for the first time is a benefit to Bath, City Manager Bill Giroux has said, pointing out that should Szanton not receive the financing it needs for the project, the building “doesn’t go back on the tax rolls, and we get no tax money.”
Because Szanton would pay less in property taxes during the 15-year TIF, “MaineHousing does not need to provide as much low-interest financing … to the project,” company principal Nathan Szanton noted earlier this month.
The project would be able to “afford more regular debt from MaineHousing,” like a greater conventional mortgage, “so MaineHousing does not need to provide as much subsidy,” according to Szanton.
The building’s estimated new tax valuation after the project is completed is $3.15 million, which would draw nearly $64,000 in taxes in today’s dollars, Szanton said. The city and developer would split that for 15 years, each receiving about $32,000.
MaineHousing only awards points for TIFs running a minimum of 15 years and keeping 50 percent of incremental taxes, Szanton explained.
The Planning Board on June 2 granted the project a land-use amendment to allow for contract zoning on the property, as well as subdivision, contract zoning, site plan and developmental subdivision approvals. The council on July 15 unanimously approved allowing contract zoning in the city’s Mixed Commercial and Residential District, where the building is located.
The panel also unanimously supported the contract zone agreement, which in return requires a public benefit from the developer. Proposed benefits in this case include moving the school’s playground closer to a nearby ball field, upgrading the playground equipment, and improving a basketball court south of the ball field. Public bicycle racks and walkability and connectivity enhancements are also proposed.
The Aug. 5 meeting will be held in City Hall at 6 p.m.
The Portland-based Szanton Co. has a contract to purchase the 73-year-old Huse School building in Bath.
The Bath City Council will discuss an affordable housing tax increment financing district for the former Huse School on Wednesday, Aug. 5. This rendition shows how the renovated building would look with an additional wing.