WATERVILLE — The $16 million project to turn the former Seton Hospital on Chase Avenue into what growth experts in the area say is a much-needed apartment complex may get underway in a few months, the developer announced at a neighborhood meeting Sunday evening.

Kevin Mattson, who bought the property for $500,000 in 2013, plans to submit an application for financing to the U.S. Department of Housing and Urban Development, or HUD, next week.

HUD should respond within 45 days, said Mattson, a managing partner of Waterville Redevelopment Corp., a subsidiary of Dirigo Capital Advisors of Topsham. Mattson also bought the former MaineGeneral Medical Center on East Chestnut Street in Augusta for $25 million in 2013, redeveloping the space into offices after the hospital closed.

Once the project receives approval for a HUD loan, which can be paid off over 40 years on a fixed rate, construction will start and last about 14 months.

In the best case scenario, the apartments, which will not be subsidized, will be ready in 2018, Mattson said, adding that HUD provides loans to developers of non-subsidized housing if there is a demonstrated need in the area.

The final plans for the project include 59 one- and two-bedroom apartments, with rents ranging from $900 to $1,100, and space for commercial units.

The project has long been in the works, mainly due to the HUD application process, which has taken nearly a year and was not in the original plan.

“The cost to rehabilitate it was significant,” Mattson said, which was “impossible to know” until the design was finished and the bids came back.

Once he received the new price tag — up from the original estimate of $8 million to $10 million — “it made sense to think about HUD.”

HUD provides financing for regions that demonstrate a need, he said, and a third-party market researcher found that Waterville is “drastically underserved,” Mattson said.

While there are apartments throughout the city, there are few that come with the amenities of a large apartment building. The Hathaway Creative Center apartments provides security, for example, he said.

“This is something that’s going to be a beacon of light for Waterville,” City Councilor Sydney Mayhew said.

The population in Waterville is actually increasing, said Garvan Donegan, senior economic development specialist at the Central Maine Growth Council.

“The need for housing is critical,” he said.

Mattson said they plan to target MaineGeneral Medical Center for the 15,000 square-feet of commercial space, which could be rented out for administrative offices, and both young professionals and people over 55 years old who are looking to downsize.

Kim Lane, a neighbor to the project and a member of the aging committee in Waterville, said universal design apartments are meant to attract both generations, which tend to be looking for the same amenities.

The building will also be retaining all of its historical details, like the chapel area and its windows, as it is now on the National Register of Historic Places and must follow National Park Service guidelines.

Madeline St. Amour — 861-9239

[email protected]

Twitter: @madelinestamour

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