AUGUSTA — A project aimed at turning the former Hodgkins Middle School building into senior housing by 2016 advanced last week, when city councilors authorized a property tax break for the developer.

The Augusta Housing Authority, developing the project with consultant Kevin Bunker, is planning 47 units of affordable housing for low-income senior housing at the complex to be funded largely by federal and state tax credits.

Additional Images

In this April file photo, Tyler Lessard, 15, walked around the former Hodgkins Middle School in Augusta to the nature trails behind it. Staff file photo by Andy Molloy

In this April file photo, textbooks were stacked up in the office of the former Hodgkins Middle School in Augusta. Staff file photo by Andy Molloy

That has been identified as a growing need in Augusta, where more than 63 percent of households couldn’t afford rent at an average two-bedroom apartment in 2013, according to Maine State Housing Authority data.

On Thursday evening, the city council voted unanimously to establish an affordable housing district on six acres of property around the school building in a residential neighborhood on Malta Street. The district requires approval from the Maine State Housing Authority.

If approved, it will allow Augusta to cut the developers a break on property taxes under a tax increment financing agreement. On Thursday, Bunker said that’s necessary to keep rent low. The agreement estimates the development’s cost at nearly $8.8 million to be financed primarily by state and federal tax credits.

Under a 30-year agreement approved by the council, the developers will retain $538,000, 73 percent of the money that would be paid in property taxes over that time period.

The rest, $194,000, would go to the city, which is beneficial because tax value sheltered during the agreement’s life wouldn’t count against Augusta’s total valuation, which affects state revenue sharing and county taxes.

Keith Luke, Augusta’s deputy development director, said an agreement to allow for the tax break and a lease for the building will be finalized by city staff in the next few weeks. The developers will apply for state housing authority approval within days, he said.

The complex will feature 37 one-bedroom units and 10 efficiencies targeted at seniors who make 60 percent of Augusta’s median income, which was $35,000 for households in 2012, according to the U.S. Census Bureau.

Luke said the project came together quickly over the last few months, especially when contrasted with a housing project at the Cony High School flatiron building, which took years to realize before a lease was finalized this year.

Cynthia Taylor, president of Housing Initiatives of New England, plans to offer 48 apartments to seniors there by next year. A market study conducted last year for that project said the city will need additional rental units to accommodate an estimated additional 192 renters over age 65 in Augusta between 2013 and 2018.

“With that now largely behind us, it was only recently that we had begun to think of the Hodgkins school as a possibility,” Luke said.

The school building, built in 1958, has been shuttered and left unheated since it closed as a school in 2009. It has asbestos and the roof leaks, but the developers would be responsible for remediating those issues. Since it’s a public building, it is now tax-exempt.

Councilors were enthusiastic about the prospects of the project to revitalize it on Thursday.

“This building doesn’t pay taxes now and it’s never paid taxes,” said Councilor-at-large Jeffrey Bilodeau. “And in the end, it actually will pay a little bit of taxes, but it would also provide a home for a number of people in the community in a building that will fit correctly in that residential area.”

Michael Shepherd — 370-7652

mshepherd@centralmaine.com

Twitter: @mikeshepherdme

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