Jonathan Culley plans new townhouses while avoiding conflicts with neighbors as the east continues its transformation.

Standing in Portland’s East Bayside neighborhood, Jonathan Culley concedes he is taking a risk by seeking to develop 10, three-bedroom townhouses at 70 Anderson St. at the corner of Lancaster Street.

The real estate developer already has two market-rate apartment complexes under construction, including a $6.5 million project only a block away from his latest proposal. Over the last two weeks, about a dozen of the 53 units have been leased in the four-story building at 89 Anderson St., which is scheduled to open in October, he said.

While real estate development in Portland is hot, both projects are being built in an area that is largely defined by public housing and warehouses, but in recent years has been discovered by artists and entrepreneurs.

“It’s a little risky,” said the 43-year-old Culley, who also is overseeing a roughly $20 million project that will add 132 luxury apartments at 667 Congress St. “We see great positive energy in East Bayside.”

The Planning Board will hold a workshop on the townhouse proposal Tuesday.

In some ways, the story of East Bayside is the story of Portland, only on steroids. It took decades for Portland to fill empty storefronts on Congress Street and the Old Port. That resurgence was led mostly by artists, who happily took over dilapidated storefronts for studios and galleries. As the art scene grew, so did the interest of developers, and the artists were subsequently pushed out by rising rents.

In the past five years, East Bayside has been on a similar arc, quickly becoming one of the city’s more eclectic neighborhoods with artist studios, breweries, distilleries, coffee roasters and a growing number of restaurants.

“There’s something to be said for: Where the creative types go first, investment typically follows,” Culley said.

Although no one is being displaced unwillingly by Culley’s projects, the rapid change – or gentrification – is something that both excites and concerns some East Bayside residents, said Abby King, president of the East Bayside Neighborhood Organization.

Redfern Properties envisions a 10-unit townhouse development at the corner of Lancaster and Anderson streets, above. Although no one is being displaced unwillingly by Redfern's projects, the rapid change – or gentrification – is something that both excites and concerns some East Bayside residents, said Abby King of the East Bayside Neighborhood Organization.

Redfern Properties envisions a 10-unit townhouse development at the corner of Lancaster and Anderson streets, above. Although no one is being displaced unwillingly by Redfern’s projects, the rapid change – or gentrification – is something that both excites and concerns some East Bayside residents, said Abby King of the East Bayside Neighborhood Organization. Gregory Rec/Staff Photographer

King, who rents an apartment on Smith Street, is a self-identified gentrifier, because she said she is a well-educated, middle-class white woman. But she is sensitive to the fact that she is different than most other people who live in East Bayside, the city’s poorest and most diverse neighborhood.

“Overall, I think the progress is good,” the 32-year-old said. “We just want to make sure it’s inclusive.”

That sentiment is shared by many in Portland. After decades of only low-income housing development, the city has seen an influx of market-rate and luxury apartments. Those pricey new units, as well as the upward pressure on rents, has some longtime residents concerned that they will no longer be able to remain in the city.

That dynamic led Mayor Ethan Strimling to appoint a special Housing Committee, consisting of five members of the City Council, to find ways to ease the housing crunch in the city.

“Right now, all eyes are on East Bayside,” King said. “We want it to continue to feel diverse and (be an) eclectic neighborhood that is mostly residential. But I think there is also excitement. People are welcoming these new businesses, especially artistic and creative endeavors.”

While many developers have run into stiff opposition from local residents and organized groups, Culley has largely avoided the types of conflicts that can lead to court challenges. That is largely because he has a reputation of working with abutters and neighborhood groups. King said Culley is easily reachable and responsive to neighborhood concerns.

Culley also is difficult to classify as a greedy out-of-state developer. He grew up in the Portland area and his company, Redfern Properties, is a two-person operation, consisting of himself and his wife, Catherine.

With a masters in business, Culley and his wife took on their first development project in Seattle, where he worked for the venture capital arm of Boeing. They gutted and renovated a home in a seedy part of town, before selling it.

After moving back to Maine to raise their family, their first real estate project was renovating a home on Neal Street in 2006.

As the Great Recession waned, Redfern emerged as one of Portland’s most ambitious local developers.

It built the seven-unit Harborview Townhomes on York Street in 2013. Two years later, it built the 39-unit West End Place – the first luxury apartment building in the city in decades. Redfern then turned its sights to Munjoy Hill, were that same year it developed and quickly sold 29 luxury townhouse condos..

Redfern currently has two projects underway, but that isn’t stopping Culley from taking on another. His proposal for 70 Anderson St. would cost about $2 million. The 10 rental townhouses would be in two three-story buildings separated by a courtyard.

One of the units is guaranteed to be affordable for a middle-class family, thanks to the city’s new inclusionary zoning ordinance. It requires that at least 10 percent of the units in projects with 10 or more units be priced for people making between 100 percent and 120 percent of the area’s median income. For a family of four, that is roughly $77,500 to $96,875.

Culley said it’s too soon to estimate the rents for the other units. However, he expects they will be within the range of existing three-bedroom units, which he said is $1,700 to $2,500 on the peninsula.

By contrast, rents at 89 Anderson St. are being advertised at $1,300 a month for a 430-square-foot studio, $1,650 for a 681-square-foot single bedroom and $2,200 for a 959-square-foot two bedroom. Each unit comes with parking, a storage locker and a washer, dryer and dishwasher. There are also smaller units available at lower cost.

Culley said 70 Anderson St. essentially fell into his lap. The woman who owns the single-family home on the 9,000-square-foot lot offered to sell it to him. He decided to build rental units for families, because that’s what neighborhood residents told him was needed, he said.

“This is no luxury housing,” he said. “We’re not going for crazy rents.”