AUGUSTA — A committee of city councilors voted Friday to recommend the city give a tax deal to a controversial Augusta Housing Authority proposal to build 34 units of affordable rental housing on the city-owned former Statler mill site.

Several neighbors of the proposed development site, which would be accessible through a residential neighborhood on dead-end Maple Street, have spoken against it, citing their fear it would bring additional traffic and disruption.

The developer and the housing authority director both said the project on the former mill site, which the city has renamed Kennebec Lockes, probably would not happen without a tax increment financing, or TIF, agreement with the city to help finance it.

The property is not taxed now because it is owned by the city, nor would the housing authority, a nonprofit corporation, normally be charged property taxes if it owned the property. However, a TIF is necessary, developer Kevin Bunker said Friday, both to help bring funding for the project and to help an application for tax credits score well enough to be selected in a highly competitive process for affordable housing projects.

The housing authority would form a for-profit entity for the project, to be eligible for tax credits, then seek to sell those tax credits to provide around $4.7 million of the estimated $6 million project cost.

But to get those tax credits, the project must outscore what are expected to be numerous competitors for affordable housing tax credits. And Bunker said having a TIF in place with the local municipality is a key piece needed for the project to score well enough to be awarded tax credits.

“Winners and losers are typically determined by one point,” and a TIF can be three to six points, Bunker said. “The TIF is, really, one of the essential building blocks we need.”

To move forward, the project also would need a favorable vote by the full City Council, both on the proposed TIF deal and on whether to give, or lease for little or no money, the land to the housing authority, which is independent of the city. Councilors plan to discuss those two related proposals at their meeting next Thursday, and they could vote at their business meeting in two weeks.

Councilors on the city’s TIF review committee voted 2-0 Friday afternoon to recommend the project be granted a TIF, with Mayor David Rollins and At-large Councilor Corey Wilson in favor, and Ward 1 Councilor Linda Conti, who attended Friday’s meeting, abstaining from the vote.

“I appreciate this project, and would welcome working with you in Ward 1,” Conti told Bunker and Amanda Bartlett, executive director of the housing authority. “But in the ward this is being located in, there is a lot of resistance to it. That’s why I’m hesitant to support it.”

Rollins said he still has questions about the project that need to be answered and he acknowledged that neighbors of the site, in a meeting Wednesday, made some good points and expressed their fear about the project.

He expressed doubt that fear would come to fruition. He said neighbors of the Augusta Crossing shopping center, where Target and Lowe’s are located now, expressed concern that development would “stop the rotation of the Earth,” but those concerns proved to be unfounded.

Joyce Grondin, a Maple Street resident who has spoken against the project, took offense to that statement from Rollins. She said the Augusta Crossing development turned out better than it would have been as first proposed because citizens spoke up and made their voices heard.

“If it wasn’t for the people who lived in that neighborhood, that project would have turned out a lot worse,” Grondin said.

Grondin and a few other Maple Street residents attended Friday’s meeting. Grondin said she was disappointed that the committee voted to recommend a TIF for the project.

The proposed TIF would return the property taxes that would be paid on the new taxable value of the project for 30 years.

Keith Luke, the city’s deputy development director, said the taxable value of the project, when completed, would be about $2.2 million. Over the 30 years of the TIF, it is projected to return about $1 million to the housing authority, most of which Bunker said would help cover the operating costs of the housing development, which would have 34 units in six townhouse-style buildings on an upper, back portion of the site.

Luke noted the city did similar TIF deals to assist in the redevelopment of the former Hodgkins Middle School and Cony flatiron buildings into senior housing.

The development, Bartlett said, is meant to provide affordable housing for working people. She said a recent MaineHousing report indicated Augusta needs 434 more units of workforce housing than it has now. She said the proposed project would allow the authority “to put a dent in the overall need.”

“It’s important for us to understand, if we don’t meet that (434-unit) deficit, it means our workforce can’t find a place to live in this area,” Wilson said. “And that means our businesses can’t thrive.”

City officials have been unsuccessful so far in their efforts to get redevelopment proposals for the Kennebec Lockes site, which is roughly 20 acres with frontage on the Kennebec River. The city seized the property, where mills under various names and ownership were located for more than 125 years, in 2009 because of nonpayment of taxes.

Bunker said it is understandable that neighbors would have questions and concerns about a project just down the street from their homes.

“We always have to remember, these are these people’s homes, which are usually their biggest investment,” he said. “So their level of interest is, appropriately, high. The fear of the unknown is the biggest fear there is. Amanda and I can have a good track record, but when it’s your home, I think it’s fair to ask tough questions. In a lot of projects, the fears have been unrealized.”

Keith Edwards — 621-5647

kedwards@centralmaine.com

Twitter: @kedwardskj

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