The Scarborough Town Council this week was set to discuss a request from Avesta Housing for a tax increment financing, or TIF, package that would help the nonprofit redevelop the historic Southgate House.

Kyle Ambler, the development officer at Avesta, told the Current that a TIF would make the project “viable” in terms of being able to qualify for low-income housing tax credits, which would allow

Avesta to better subsidize the planned below-market rents.

The TIF proposal on the table would be for 17 years with 50 percent of the captured value returned to the development, and the other 50 percent going into the town’s Affordable Housing Initiative Fund, Ambler said.

The council was scheduled to meet on Wednesday, Aug. 19, after the Current’s deadline. At that time town leaders were expected to give final approval to the contract zone the Southgate redevelopment project also needs to move forward.

The nearly $9 million project would create a 50-unit affordable housing complex. The goal would be to restore the main house, while also preserving two of the barns located on the 3-acre site, located off Route 1 in Dunstan.

Under the redevelopment project, Avesta would offer studio and one- and two-bedroom apartments to those who make between 50 and 60 percent of the area median salary based on household size.

Eight of those units would be in the main house, while a new, 42-unit building would be constructed to match the architectural style of the Southgate House.

Dr. Robert Southgate built the house between 1798 and 1805 and it’s one of the historic structures in town recently added to Scarborough’s code of ordinances as a building worthy of preserving.

In its contract zone application, Avesta said the redevelopment project would “provide a significant increase in the variety of housing stock” available in Scarborough, and that it would be “a high-quality project that preserves the significant historic character of the site.”

In a prior interview, Town Planner Dan Bacon said that Avesta’s project, its first in Scarborough, “is very much in line with a variety of key initiatives being pursued,” by the town, which includes “more affordable housing and a greater range of housing choices.”

He added that the project also fits in with recent efforts in Scarborough to preserve “some of our most historic properties and buildings.”

Bacon said, “This project would preserve and restore the historic Southgate House, which has been viewed by many as one of the most threatened historic buildings in town, given its location and pressure on it for redevelopment.”

In the proposed order that would create the new TIF district for the Southgate House, which was provided to the council prior to its meeting, it stated the TIF would “create affordable, livable housing and therefore constitutes a good and valuable purpose.”

Neither Town Manager Tom Hall nor Town Council Chairwoman Jessica Holbrook could be reached for comment on the TIF proposal before the Current’s Tuesday deadline.

Avesta Housing is seeking a tax increment financing deal from the town of Scarborough to redevelop the historic Southgate House in Dunstan. File photo