SANFORD – A Portland real estate development firm is forging ahead with plans to convert a cornerstone of the former Goodall Textile Mill complex into housing and commercial space.

The Sanford Mill Redevelopment Project furthers the town’s efforts to bring new life to a stretch of largely vacant former mill buildings along Pioneer Avenue, in the heart of the downtown.

The Town Council agreed last week to sell mill building No. 1, which stands at 61 Washington St., to Northland Enterprises for $198,000, said Town Manager Mark Green.

The federally and state-funded project would include 36 apartments – nine of them subsidized – and 22,000 square feet of office, retail or restaurant space, said Northland partner Rex Bell.

“We’re actively looking for commercial tenants now,” Bell said. “We hope to begin mill renovations early next year and welcome apartment dwellers and commercial tenants in early 2013.”

The Northland project bookends another Goodall mill redevelopment project scheduled for mill building No. 4, which stands at 72 Emery St.

Proposed by Brady Sullivan Properties of Manchester, N.H., The Loft at No. 4 Mill would include 143 units of subsidized work force housing and 26,000 square feet of commercial space, according to town records.

“The mill buildings lie right in our downtown, so their redevelopment is critical to the redevelopment of our downtown,” Green said.

The town took mill building No. 1 by eminent domain a few years ago, when the former owner’s redevelopment efforts foundered and the property was falling into disrepair, Green said.

Northland’s $198,000 payment will cover $150,000 that the town gave the former owner when it took ownership of the mill, plus the town’s more recent cost to build a new road through the mill complex. The town is holding a contest to name the new road.

Northland is scheduled to pay the town April 1, by which time the firm plans to secure financing with Bangor Savings Bank, Bell said. The payment will include 5 percent annual interest accrued over the next four months, Green said.

Northland and town officials are expected to close on the sale this week; the company plans to begin replacing the roof and weatherizing the building soon after.

Northland’s renovation of the three-story, 66,500-square-foot building will be funded by a $3.7 million grant from the Neighborhood Stabilization Program of the U.S. Department of Housing and Urban Development, Bell said.

The project also received a $495,000 Riverfront Community Development grant from the Maine Department of Economic and Community Development, Bell said. The mill complex is near the Mousam River.

Northland conducted a market study that validated the need for the project’s housing and commercial space, Green said.

The town recently demolished another former mill building next to No. 1, which will provide parking space for Northland’s project, he said.

Staff Writer Kelley Bouchard can be contacted at 791-6328 or at:

kbouchard@pressherald.com