The developer behind three current housing projects on the Portland peninsula has proposed a fourth: a 132-unit apartment building on Congress Street across from Longfellow Square.

Jonathan Culley of Redfern Properties applied to the city Tuesday for a zoning map amendment for the roughly $20 million project at 665 Congress St. The site is home to Joe’s Super Variety, formerly Joe’s Smoke Shop.

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Longfellow Square is in the foreground of this architect’s rendering of a proposed $20 million, 132-unit apartment building at 665 Congress St. in downtown Portland. Ryan Senatore Architecture

Culley said the 70-year-old store and Congress Street landmark would continue to operate in the first floor of the proposed seven- or eight-story building, which would house a mix of studio, one-bedroom and two-bedroom apartments. He hopes to break ground this year and open in early 2017.

“We view this as a premier location for rental apartments. Longfellow Square has emerged as one of Portland’s most vibrant walkable urban areas,” he said in an email.

Culley’s largest project so far is the latest sign of a tight housing market – and a residential development boom – in and around the city’s downtown.

His proposal to add such a significant number of rental units comes one week after Portland’s Planning Board approved the so-called “midtown” project, which would add 445 market-rate apartments to the Bayside neighborhood less than one mile away. Asked whether that project by a different development company raises concerns about demand for his project, Culley pointed to his proposal’s “premium location.”

Located where the city’s arts district meets the West End, Longfellow Square retains remnants of its less refined past – including adult video stores, Blackstone’s bar and Joe’s. Now, however, the neighborhood surrounding the statue of a seated Henry Wadsworth Longfellow is better known as home to some of the city’s trendiest restaurants and bars, including Boda, Local 188, Pai Men Miyake and LFK.

Boda uses some of the spaces in a parking lot behind Joe’s that is part of Culley’s site plan. That lot would be replaced by a lot with 60 to 100 spaces for residents who would park under and behind the apartment building.

Culley has been rapidly building residential units in the heart of the city, where a housing crunch has driven up rents and forced tenants to compete for vacant units or look for apartments off the peninsula. Redfern’s other projects include luxury apartments in the West End, townhomes nearing completion on Munjoy Hill and another residential project planned for Anderson Street in East Bayside.

The market rate for a heated one-bedroom apartment in the city last year was between $925 and $1,000, up 8 percent to 12 percent from the year before, according to an annual study by Brit Vitalius, president of the Southern Maine Landlord Association. Vitalius has said that new construction had stalled in recent years, helping to drop downtown vacancy rates close to zero.

Culley has been at the forefront of capitalizing on that demand.

“Redfern is intensely focused on urban infill developments that add to the fabric of Portland’s neighborhoods, while increasing options in Portland’s rental housing market,” he said.

Jeff Levine, the city’s director of Planning and Urban Development, said it’s “exciting” to have a large proposal on a transit corridor. “The need for additional housing is there,” he said.

Levine said Culley’s plan appears to comply with the city’s zoning rules, and characterized his request for a zoning map amendment as “nothing drastic.” The change would move a border that splits the property into two zones, so that it all falls under one set of zoning standards.

The owners of Joe’s Super Variety and the land around it aren’t complaining, either.

The development would put hundreds of potential customers just upstairs, said Michael Discatio, one of three brothers who took over the shop their grandfather opened and now have entered into a partnership with Culley. Discatio believes the previous generations of Joe’s owners would have done the same thing.

“The store is very old. It’s been here a long time. To better serve our customers, it was time to do something like this,” he said.

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