PORTLAND – A City Council committee has voted to endorse tax breaks for a pair of major projects that city officials believe will help spur development in the city’s India Street neighborhood.

Members of the Housing and Community Development Committee said their recommendation will be presented to the full City Council for a final vote at its Aug. 6 meeting.

Some committee members said they weren’t sure that city authorized tax breaks, called tax increment financing, should be used to promote development of high-end housing — which would be incorporated into both projects.

But others said the neighborhood needs a shot in the arm and that it would be worthwhile given that once completed, the two projects would increase the value of the city’s tax rolls by as much as $50 million — the combined estimated assessed value of both projects.

“To me it’s a kick start to a part of town that has frankly been languishing,” said Councilor Edward J. Suslovic. “We have two projects in front of us that will kick start development in that area.”

Representatives from The Village at Oceangate LLC, which has proposed building Bay House, a 94-unit apartment building on the former site of the Village Cafe just off India Street; and Fore India Middle LLC, a proposed residential, office and retail development at the former Jordan’s Meats site at the intersection of Fore, Middle and India streets, appeared before the committee Wednesday night.

The Fore Middle India development represents phase two of a project that already includes 94,000 square feet of mixed uses, including the 122-room Hampton Inn, the Sebago Brewing Company restaurant and 12 residential condominiums.

Phase two, which may start as soon as this fall, calls for construction of 64,000 square feet of office space, 22,000 square feet of retail space and 18 residential condominiums.

Gregory R. Kirsch, vice president and general counsel for the developer, Opechee Construction Corp., said his company needs up to $850,000 in tax breaks to cover the cost of meeting a city requirement that might force them to relocate existing Middle Street utility poles underground.

After a long discussion, the committee voted 4-0 to grant Opechee a $650,000 tax break. The project still needs approval from the Planning Board, which could lift the requirement that the utilities be placed underground, as well as the full council. The TIF would be voided if the board lifts the requirement.

“We are starting a policy of subsidizing housing at the high end,” said councilor Kevin Donoghue, adding that he could see no public benefit from supporting the project, although he said he thought it was a good project and eventually supported it.

The Bay House will feature two buildings or towers containing 94 market rate apartments, a parking garage and 5,700 square feet of commercial retail space.

It will be built on vacant land bordered by Newbury, Hancock and Middle streets.

Committee members voted 3-1, with Donoghue opposed, to grant the developer a $648,000 tax break, which is what they requested.

If those apartments are ever converted to condominiums — the developer has said that is the long-term goal — then the TIF will be voided.

Staff Writer Dennis Hoey can be contacted at 791-6365 or at:

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