WATERVILLE — City councilors on Tuesday will consider approving a $25,000 forgivable loan to the owners of the Last Unicorn restaurant to open a second restaurant and bar, The Proper Pig, at 14 Common St. downtown.

The new restaurant would be in a historic building bought by businessman Bill Mitchell as part of downtown revitalization efforts. The restaurant would be in the space occupied many years ago by The Carousel restaurant.

Fred Ouellette, who with his wife, Amy, have owned the Last Unicorn since 2012, plan to open the new restaurant this year. Ouellette on Monday kept information about his plans close to the vest.

“We’re really excited about opening another one in Waterville and not just ready to reveal too much yet,” he said.

But City Manager Michael Roy said the paperwork issued for the forgivable loan says it will be a pub-style restaurant. The purpose of the loan is to provide money for improvements to the property, as well as furniture, fixtures, equipment and working capital.

The city has in the past issued two other forgivable loans to Silver Street Tavern and Selah Tea, both of which successfully followed loan policy during their five-year loan period.

“I think it goes to show that this process can have real benefit and helped two critical Main Street investments survive during the rough years,” Roy said.

The loans are given based on the number of jobs they create and on debt service ratio, or income compared to debt, according to Roy. The loan applications go through three steps, he said. An independent underwriter for Kennebec Valley Council of Governments reviews the proposals, the city’s Forgivable Loan Committee reviews them and makes recommendations and then the City Council considers approval, he said.

The Forgivable Loan Committee recommends the loan for The Proper Pig be approved, he said. The city started out with $100,000 in the forgivable loan account. If the council approves the loan for the Ouellettes, the balance in the account will be $25,000.

Councilors Tuesday also will consider approving food and liquor licenses for The Proper Pig. Mitchell, the building owner, who also owns GHM Agency on nearby Main Street, said he looks forward to having The Proper Pig at 14 Common St.

“I’m very excited to have Fred open his new restaurant in my building,” Mitchell said. “I think he’s done a great job at the Last Unicorn, and I think he’ll bring his talents into this new venture.”

The council meeting will be at 7 p.m. and will be preceded by a public hearing at 6:45 p.m. to discuss a redevelopment tax increment financing request for the former Seton Hospital property on Chase Avenue.

Kevin Mattson, the developer, plans to turn the former hospital building into residences and offices.

Roy said that the agenda initially had an item asking councilors to consider voting to approve the TIF after the public hearing, but because details are still being worked out for the TIF, the item was removed. However, the public hearing had been advertised so it must still be held, he said. No votes will be taken afterward, he said.

“This is just going to be a warm-up because we were not able to reach agreement with the TIF Advisory Committee on a recommended reimbursement schedule,” Roy said. “The developer will be there to say, ‘Here’s what we’re proposing to do,’ but there won’t be any discussion about what kind of money the TIF reimbursements would provide for him.”

In other matters Tuesday, councilors will take a final vote to dispose of tax-acquired properties on Abbott, Gold, Kimball, Broad, Grove and Summer streets, as well as a property on Airport Road.

The council will consider renewing a contract with Somerset County Communications Center for E-911 services for July 1, 2016, to June 30, 2018; appointing election clerks; and amending the zoning ordinance so 319 Main St. can be changed from Commercial-C to Commercial-A to allow apartments to be built in a barn attached to the main building on the property.

The council also will consider taking a final vote to grant a drainage easement to the state Department of Transportation as part of the Trafton Road interchange project.

Amy Calder — 861-9247

[email protected]

Twitter: @AmyCalder17