WATERVILLE — An $11 million plan to turn the former Seton Hospital on Chase Avenue into a complex with 50 one and two-bedroom apartments has moved a step closer after city officials agreed to rezone the property.

Developer Tom Siegel of RME Property Consultants, of Topsham, plans to include 23,000 square feet of office space on the ground level of the building and 35,000 square feet of warehousing and storage on the lower level.

The City Council voted 6-0 Tuesday to change the zone on the property from Institutional to a new zone, Suburban Mixed Use District, to allow for those various uses. 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 developed into offices after the hospital closed. He bought the Seton property for $500,000 in 2013.

Councilors on May 16 voted unanimously to approve a tax increment financing district and related development plan for the Seton project. The 20-year TIF will enable Mattson to pay taxes on the property and receive some of that money back as reimbursement. The TIF will include a 50 percent reimbursement over 20 years.

Siegel must go before the Planning Board to have the project considered under the city’s site plan review ordinance. He hopes to start working on the project this fall. It is expected to take about a year to complete. As part of the project, he plans to maintain the historical integrity of the building as much as possible. The project is eligible for historic tax credits.

In other matters Tuesday, the council took a final vote to accept a Federal Aviation Administration grant that allows for easements giving the city authority to remove trees around the city-owned Robert LaFleur Municipal Airport.

Councilors took a first vote to :

• Adopt an ordinance regulating medical marijuana facilities that says no marijuana dispensaries or primary caregiver operations are allowed in the downtown area bordered by Union Street on the north, Spring Street on the south, the Kennebec River to the east and Elm Street to the west and including properties with frontage on Water Street between Spring and Sherwin streets.

• Repeal the city’s former ordinance regulating medical marijuana businesses.

• Accept a new street that connects upper Western Avenue to Chase Avenue. That street, Mount Merici Avenue, was built as part of a project to discontinue part of Western Avenue nearest to First Rangeway to make the intersection safer.

• Rename part of Western Avenue that is west of First Rangeway to Lee Way. It will be a dead end street, created by the extension of Mount Merici Avenue to Chase Avenue. As part of the vote, the upper part of Western Avenue would be renamed Mount Merici Avenue, which will run from Chase Avenue to Mayflower Hill Drive.

• Rezone five acres at 172 Western Ave. from Institutional to Residential-A to allow 28 affordable apartments for seniors to be built in the former Mount Merici convent.

• Approve a natural gas easement to allow Summit Natural Gas to serve Educare Central Maine off Drummond Avenue.

• Accept a gift from Lester and Nancy Lawrence of a residential property at 232 Water St. with the understanding that it will be sold and the proceeds deposited in the South End Neighborhood account. The money must be used for purposes that include trails, paths, open space, parks, improvement of roads or sidewalks connecting to downtown and other neighborhoods or purchase of materials that would help improve the quality of life. The South End Neighborhood Association will decide the use of the money.

Amy Calder — 861-9247

[email protected]

Twitter: @AmyCalder17

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