ARUNDEL — For years, Route 1 in Arundel has been an outlier between its more developed neighbors – Biddeford to the north and Kennebunk to the south.

There’s a gas station, a couple of used car lots, a flea market and a few car repair shops. Otherwise, it’s a tree-lined street where the speed limit jumps to 50 mph, allowing people to pass through quickly on the way to Biddeford’s shopping centers or Kennebunk’s classic Main Street.

Cape Arundel Cottage Preserve intends to change that.

The development of 259 cottages is expected to bring in hundreds of part-time residents to the town, which is mostly rural and residential, and has a year-round population of about 4,000. Town officials see such promise in the complex – and about $3,700 in property taxes from each unit – that they granted a tax break to help launch it and adopted new zoning to ensure the homes are used only eight months out of the year. The timing of the season – from May 1 to the end of the year – means minimal impact on town services, including no kids for local schools.

Cape Arundel seeks to emulate the seasonal housing developments often seen in beach towns. The closest example is Wells, which has more than 1,000 seasonal small houses in a handful of developments with names like Seaglass Village and Beach Dreams Cottages.

Despite its name, Cape Arundel isn’t on the shore. It sits atop a forested hill of about 200 acres, which is being sculpted into clusters of small homes of roughly 900 square feet with amenities like a clubhouse and pool. The ocean is at least 3 miles away as the crow flies, but the developer touts the closeness of the Kennebunks, southern Maine beaches and Portland as selling points.

So far, it takes a bit of imagination to conjure what the development will look like. Big earth-moving machines kick up clouds of dust, and developer Joe Paolini notes that blasting is needed to dislodge parts of the granite ledge that runs throughout the site. A model home is complete and three others are under construction.

Still, 13 cottages are under contract. Prices start at about $215,000; the median sales price of a single-family home in York County is $230,000.

Paolini is enthused by the early response and believes buyers are getting more for their money than they would down in Wells.

“People seem to be excited about this because, for what we’re asking, people are getting more for less,” he said.

The kitchen in The Birch With Loft at Cape Arundel Cottages.
Shawn Patrick Ouellette/Staff Photographer

PUTTING OUT THE WELCOME MAT

Paolini clearly sees a burgeoning market for vacation homes in York County, and town officials are happy to accommodate it.

Arundel town planner Tad Redway said the town sees the development as a boon. Town meeting approved a zoning change to accommodate the complex and endorsed a tax increment financing district for it, which redirects some of the new property tax money back to the developer to offset infrastructure costs.

The zoning allows residents to live in the houses for eight months, from the beginning of May to the end of the year. At that point, the gate on the access road is locked and water is drained from the homes’ pipes. Anyone who wants to visit their property from January through April has to go to town hall for an escort.

The eight-month occupancy is two months longer than neighboring Wells, where six months is allowed in most of the seasonal units there.

Redway said the longer stay is a nod toward popular attractions in the area beyond Columbus Day, such as neighboring Kennebunkport’s Christmas Prelude.

Unlike their counterparts in Wells’ seasonal communities, residents of Cape Arundel can have their Thanksgiving dinners and Christmases in their cottages, Redway said.

The restrictions on when the houses can be occupied, he said, mean no educational costs for children. Services such as garbage collection and snow plowing are the responsibility of the development’s homeowners association

“We see it as being a positive fiscal impact,” Redway said.

Under the TIF, the new property tax money will be directed toward economic development. Redway said it’s possible that the money could be used to pay for a municipal sewage system. The town has no sewage system of its own, which inhibits its economic development. But if sewer lines in Biddeford or Kennebunk were extended to Arundel along Route 1, the area would be ripe for development, he said.

Wells also enjoyed a boon from the small seasonal homes that were built there over the past several years.

But Jonathan Carter, the town manager, said the effects were positive up to a point. He said traffic got to be a big concern, and visually, Route 1 wasn’t as charming with some of the seasonal developments dotting the landscape. Last year, voters decided to drop the zoning that allowed the developments, so there will be no new projects.

Although taxes from the vacation complexes shore up the town budget and seasonal residents support local businesses, many residents in Wells felt that most of the developments were too dense and “didn’t feel it represented what the town of Wells should look like,” Carter said.

The ban on new seasonal developments was an expression by the town that “enough was enough,” he said.

SECOND-HOME SALES BOOMING

At Cape Arundel Cottage Preserve, though, things are just getting started. Kim White, the marketing director, displays the four different cottage styles that residents can choose from, which range in size from 837 to 950 square feet. Most are one-floor layouts, with two bedrooms and a bath, and an option for a second-story loft.

As an added amenity, Paolini has set aside a small parcel he owns on Route 1 for commercial development. He foresees building a coffee shop and convenience store there, mostly to serve Cape Arundel homeowners.

The foundations of the 13 homes under contract are already in and construction will continue over the winter to get the units ready for the 2016 season, White said.

“Snowbirds” and out-of-state buyers – especially from New York and New England states – are the intended market. White said the homes are ideal as weekend and summer getaways for families within a few hours’ drive, or for older couples, especially those considering retirement in a few years. The houses have enough room for grown children and grandkids to visit, White said, and retired buyers could live in Maine most of the year, then head south for the worst of the winter months.

Paolini designed the units to withstand early winter weather, with more insulation and water lines buried 5 feet, rather than the 18 inches typical of a seasonal home that shuts down in October.

That extra time sets his development apart from others, Paolini said, noting that the ability to use the cottages around the holidays is a key marketing strategy.

“That extra two months has really helped us,” he said.

Figures on home building and sales suggest that the seasonal housing market is booming, although some observers worry that this year’s stock market swings might slow things down.

Jessica Lautz, the director of survey research and communications for the National Association of Realtors, said second-home sales jumped 40 percent in 2014 over 2013, and beach towns were among the most popular locations for vacation homes. She said seasonal homes are particularly popular among baby boomers, but real estate agents are waiting to see if the market remains as strong for millennials.

According to the National Association of Homebuilders, about 5 percent of new home construction in 2014 was for second homes, said Stephen Melman, director of economic services for the organization.

Melman said the locations of those second homes are spread out, but popular states include Colorado and Utah for skiers and Florida, California and Missouri (the Ozarks) for warm-weather second-home owners.

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