BATH — A Portland developer is ready to renovate the former John E.L. Huse Memorial School after receiving affordable-housing tax credits from the state.
The Szanton Co. plans to develop nearly 60 mixed-income residential apartments in the 73-year-old building on Andrews Road, with almost half in a new northeast wing.
Szanton has a contract with the city to purchase the building and surrounding land. The property would be subdivided into a municipal band building and ball fields, which the city would retain, and the 2.49-acre Huse School lot, which Szanton would own.
The project’s financial feasibility hinged on a successful application for affordable housing tax credits from MaineHousing. The credits would offset $5.8 million of the project’s total $10.3 million budget, developer Nathan Szanton said Tuesday.
“We felt as though we were certainly competitive for the credits, and that we had done everything we possibly could do to maximize our chance of being successful,” he said. “But that’s not always enough.”
Szanton called the news about the credits “a huge relief,” adding that “it feels wonderful to know that we can finally move forward and actually do the project.”
Out of 16 projects that applied for the credits, Szanton noted, only five received them.
He said he plans to close on the property acquisition and begin construction in June 2016, and open the new apartments around April 2017.
Had Szanton not received tax credits, the company’s agreement with the city would have been extended a year to allow a second application in October 2016, with a closing in spring 2017.
The City Council in August unanimously approved an affordable housing tax increment financing district for the project. While the TIF did not make Szanton eligible for the state tax credits, the three points MaineHousing awards for having a TIF was expected to “significantly strengthen” the company’s application, Szanton Project Manager Andy Jackson had said.
Just three points separated the top-scoring project from the lowest-scoring project to receive funds in last year’s funding round, Jackson pointed out.
The terms of the credit enhancement in the TIF agreement stipulate that Szanton will be refunded half of the property taxes paid for 15 years.
MaineHousing only awards points for TIFs running a minimum of 15 years and keeping 50 percent of incremental taxes, according to Szanton.
But putting the property on the tax rolls for the first time is a benefit to Bath, City Manager Bill Giroux previously said, adding if Szanton did not receive the financing he needs for the project, the building “doesn’t go back on the tax rolls, and we get no tax money.”
An expansion of the former John E.L. Huse Memorial School in Bath by Szanton Co. would include an additional wing, shown here.