WATERVILLE — City councilors voted unanimously Tuesday to approve a tax break and plan for an $11 million project to turn the former Seton Hospital on Chase Avenue into 50 one- and two-bedroom apartments in what officials say makes the project financially feasible for the developer and brings needed housing to the city.

The 7-0 vote was the first of two needed to approve the 20-year tax increment financing plan, or TIF, in which the average rate of reimbursement over that period is about 50 percent. Councilors are scheduled to take a final vote on the TIF at their May 17 meeting.

As part of a TIF, the property owner pays taxes and receives some taxes back as reimbursement.

Developer Tom Siegel, of RME Property Consultants, of Topsham, said 50 apartments would be constructed in the tower of the building, which is six stories, with most of the units two-bedroom and the rest, one-bedroom. The ground level will be 23,000 square feet of office space, and the lower level will be 35,000 square feet of warehouse and storage, according to Siegel.

He said the historic integrity of the building will be retained as much as possible as part of the project.

“We’d like to begin in August, and right now, we’re really trying for 12 months of construction,” Siegel said. “That could get extended for various reasons.”

He was answering a question from City Council Chairman John O’Donnell, D-Ward 5, about the timeline for the project. O’Donnell is a member of the city’s TIF Advisory Committee which recommended the council approve the TIF.

Councilor Sydney Mayhew, D-Ward 4, who also is a committee member, said the project will offer high-quality rental options, create employee housing for businesses such as Collaborative Consulting, a technology company that plans to have 200 people working downtown within three to five years, and would repurpose a vacant facility.

Earlier Tuesday, Siegel said the building is eligible for historic tax credits and he will be applying for those credits. The building’s historical integrity is largely intact and has not been changed, as many buildings of its age have. For instance, little green and mustard-colored mosaic tiles in bathrooms and shower rooms are as they were in the 1960s; and as one walks through the building, the 1960s architecture is apparent.

The property is owned by Kevin Mattson, the managing partner of Waterville Redevelopment Corp., a subsidiary of Dirigo Capital Advisors, of Topsham. Mattson also owns the former MaineGeneral Medical Center on East Chestnut Street in Augusta, which he bought for $25 million and transformed into offices.

Mattson bought the former Seton property for $500,000 in 2013. The building represents Miesian architecture, developed by Ludwig Mies van der Rohe. He founded the International Style of architecture, which features steel-framed and glass buildings. The building, originally Seton Hospital, became part of MaineGeneral in 1997.

At Tuesday’s meeting, City Manager Michael Roy explained that TIFs allow a community to shelter value that is added as a result of such a redevelopment project. When buildings are constructed and properties developed and the community value goes up, three negative things happen — the community loses revenue sharing money from the state, it loses money for education and county taxes increase, Roy said.

With a TIF, the state doesn’t recognize that added value; for instance, if the added value is $3 million, that does not exist, as far as the state is concerned, Roy said.

The state requires a community to spell out in a TIF agreement where the city will spend the money, which is restricted to certain uses, usually associated with the project, according to Roy. It could be used for roads leading to the project, additional city services needed, sidewalks, and so forth, he said.

Councilor Dana Bushee, D-Ward 6, said that part of a TIF is important.

“It’s good to know we could designate the money to make sure we take care of that property,” she said.

Mayor Nick Isgro said developers do not have to come to Waterville, and being able to have a TIF makes a difference.

“This is a way to make projects that aren’t necessarily viable viable,” he said.

The TIF committee met several times and required the developer to submit detailed information about the project cost and revenue, and members looked hard at those numbers, which had not been done with past projects, Roy said. Councilor Nathaniel White, D-Ward 2, also is a committee member, agreed.

“The committee feels this is in the best interest for the developer and the city,” he said.

Councilor Jackie Dupont, D-Ward 7, reminded those present that the council voted to amend the TIF policy to include residential developments.

After the vote, Siegel said he met several times with the TIF committee and he and members tossed terms back and forth, and it was important to the committee that TIF revenue was equitable to both the developer and the city.

“We ended up with an arrangement of the TIF revenue split between the developer and the city that is 50-50,” he said. “I’m glad that they’re pleased with it and it’s something that the city can be happy with.”

Amy Calder — 861-9247

[email protected]

Twitter: @AmyCalder17

 

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