PORTLAND — The sole bidder for the redevelopment of the former Marada Adams Elementary School on Munjoy Hill last week sought to alleviate concerns about funding for the project.
The City Council’s Community Development Committee was updated Wednesday on a revised proposal intended to address funding concerns and projected maintenance costs for a half-acre park that would be turned over to the city.
Avesta Housing, the state’s leading provider of and advocate for affordable housing, originally proposed a development called Beckett Green, a 40-unit, owner-occupied condominium complex with a half-acre park.
Each of the 10 buildings would include two, three-bedroom units over two, single-bedroom units for the one-acre site defined by Moody, Munjoy, Vesper and Wilson streets. Three- and single-bedroom units would be marketed as a pair to people meeting federal guidelines for affordable housing – those making less than 120 percent of median income.
When the project was first presented to the CDC in October, there were concerns about the project’s financing as well as the potential maintenance costs for the half-acre park, proposed to be turned over to the city.
Avesta Housing originally asked for a tax increment financing district, which would reduce tax dollars paid to the city, for redevelopment. Avesta would have taken the estimated $1.6 million taxes saved over the 30-year TIF and invested it into the development and infrastructure improvements in the surrounding neighborhood.
At the time, city planners were also concerned that the $10.6 million project would face a $500,000 to $1.34 million shortfall, even with a 100-percent TIF.
T.J. Martzial, the city’s director of Housing and Neighborhood Services, said the city may be able to provide some other form of financial assistance besides a TIF. That assistance could from $1.3 million in Home Stabilization Funds, part of the economic stimulus package, and the city’s HOME program, which subsidizes new construction of affordable housing.
“They’re still looking for a considerable subsidy,” Martzial said. “But this is a great project.”
Dana Totman, president of Avesta Housing, said if Avesta received $600,000 of the stabilization fund, then Avesta could cut in half its TIF request. Also, Totman said more funding could become available when and if the U.S. Congress approves another economic stimulus package, which is rumored to include more housing help than the first package.
“Our whole project remains somewhat fluid,” Totman said, noting the instability in the economy, home prices, interest rates and demand for new housing. “We’re optimistic we can complete this project as proposed.”
The CDC also heard two other, less desirable plans to reduce Avesta’s reliance on the TIF. One proposal would add an additional, four-unit building and the other would add two additional, four-unit buildings.
Totman said in October that more units would have to be added if the city balked at the TIF request. Upon further review, however, adding one or two more buildings would not increase the profitability to the extent previously hoped.
“We really don’t like either of those options,” Totman said. “It didn’t really help us financially. We thought it would, but practically it didn’t. And it probably created more of a parking problem than we already have.”
Totman said he’s had preliminary discussions with the Parks Department about possibly reducing maintenance costs for the half-acre park, originally projected to cost the city between $50,000 to $100,000 in annual upkeep.
Totman said their initial discussion centered around reducing the size of the park to be given to the city by giving the planned grassy and shrubby portion near the development to its ownership association, which would be responsible for the upkeep.
Committee members were also concerned that the $600,000 offering price for the one-acre site was too low, given its location and potential ocean view. But Totman said there have been no further negotiations about the asking price.
The CDC is expected in March to vote on a recommendation to the full City Council, which will decide whether to move forward with Avesta’s proposal or put the property back out to bid.
City Councilor and CDC Chairwoman Cheryl Leeman, however, said she believes the city and Avesta can hammer out a revised redevelopment plan that is mutually beneficial for the developer, community and city.
“It is important to be sure any proposal is not a stand alone project, (but) an integrated development that fits into the neighborhood,” Leeman said, adding “and that the final design and financial deal satisfy community and fiscal concerns.”