SCARBOROUGH — The Town Council on Wednesday approved a zoning amendment to allow 288 luxury apartments at the corner of Payne Road and Haigis Parkway.

The Residences at Gateway Commons will be built by Devine Capital on approximately 33 acres of undeveloped land.

The town will receive $700,000 from the developer in lieu of affordable housing, and Scarborough will also reap at least $2.2 million in fees.

Town councilors said they liked the project, but were divided on whether to set aside 10 percent as affordable housing.

The council voted 5-2 to approve the project without the affordable housing requirement, instead agreeing to the payment that would be set aside. Councilors Katy Foley and Peter Hayes voted against the zoning amendment to create the project.

The project will be a mix of studio, one-, two-, and three-bedroom units in 12 buildings. Each would contain 24 units, with rents ranging from $1,400 to $2,200 a month.

The project is expected to take about two years to complete, and is expected to generate between $475,000 and $630,000 in annual revenue for the town, developers told councilors.

“We pushed hard and we’ve gotten a really good deal,” Councilor William Donovan said. “This is a significant contribution to the town of Scarborough.”

Council Chairman Shawn Babine said, “I really believe it is a great project. It is what we really need.”

But some councilors said the town isn’t doing enough to include affordable housing.

Foley proposed an amendment that would also require Devine Capital to build 10 percent of the units as “affordable units” or workforce housing. Only Foley and Hayes voted for the amendment, which lost 5-2.

“I’m concerned this project will not go forth with this amendment,” Councilor Chris Caiazzo said. “What is better for the town – this project or no project?”

Hayes said he supports the project, and believes it will be good for business.

But he was concerned about the affordable housing funds, and whether the money could be used to build more affordable housing in a timely manner.

“I’m not sure this is the best we can do for the taxpayers of Scarborough. The way it is constructed now, I’m not sure it is the best for the citizens of Scarborough,” Hayes said. “I think there is some room in the numbers.”

Hayes said other cities – including Portland, South Portland and Cape Elizabeth – are using different numbers for funds in lieu of affordable housing.

Hayes also had concern because councilors waived a recreation fee. Some councilors felt it was unnecessary because the developer will provide recreational amenities, such as a pool and fitness center.

He also noted every business that comes to Scarborough also pays impact fees.

Councilor Will Rowan said he supported the proposal.

“I like this project. I like the way it has been designed. I think it is a good use of the land. I feel like it is going to spur development, and really crack the egg on development,” Rowan said.

The action was generally supported by affordable housing advocates.

Cynthia Taylor, president of Housing Initiative of New England Corp. in Portland, called the project well-planned, well thought-out, sited in an appropriate location, and a great opportunity to provide a different level of housing.

Taylor, a lifelong Scarborough resident who has served on the Planning Board, said, “I would encourage you to note in favor of the payment in lieu.”

Marj DeSanctis, chairwoman of the Scarborough Housing Alliance, said she would prefer to see affordable housing, but her organization would be more than willing to take the fee so it can work with another developer to create more affordable homes.

But Suzanne Foley-Ferguson, also a member of Scarborough Housing Alliance, said the $700,000 payment is too low; she said Portland gets $100,000 per unit.

Foley also said inclusionary housing to increase affordable housing should be a matter of principle.

Melanie Sochan can be reached at 781-3661 ext.106 or msochan@theforecaster.net. Follow her on Twitter@melaniesochan.

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