A Texas-based development group that bought one of Portland’s most iconic buildings in a foreclosure sale nearly two years ago has applied for a $32 million tax break to build more than 260 units of housing downtown.

Presidium Real Estate, which bought the Time & Temperature Building on Congress Street and some surrounding properties during a foreclosure sale in 2018, is asking the city for a tax break over the next 30 years to help finance a 265-unit apartment building at 45 Brown St. The proposal is on the same block but does not include the landmark Time and Temperature building itself.

Chris Rhoades and Andrew Preston, who are the local partners on the project, said they’re hoping to convert the currently distressed property in the middle of Portland’s downtown into a vibrant community. They said the proposed development will exceed the minimum number of affordable units required to be eligible for affordable housing tax increment financing, or TIF. And though the units will be relatively small – with studios being under 500 square feet – the project will include common areas, like co-working spaces, a game room, green space, a courtyard and dog-friendly amenities, such as a dog wash.

“We know because we live here that there’s a real housing shortage and a real affordable housing shortage,” Rhoades said. “We feel this is an unmet need. This location would allow for affordable housing and allow people to walk to work. And building in the amenities will make it a real community.”

An existing parking a garage at the site would be demolished, according to an application presented this summer to a City Council subcommittee, and a seven-story apartment building would be constructed over a new 2.5-level parking garage with 256 parking spaces. The estimated project costs are over $88 million and the project site includes frontage on Brown Street, Cumberland Avenue and Preble Street.

Even if the TIF is approved, the project would still need to undergo a review by the Planning Board.

The redevelopment of the Time & Temperature Building is not part of the application. Rhoades said the coronavirus upended plans to sell the iconic 14-story building to a hotel developer and operator, forcing them to re-evaluate their plans.

The application for an affordable housing TIF would return 75 percent of the property taxes on the increased property value to the developer. It was presented to the council’s Housing Committee on June 10, but no action was taken. And no other meeting dates have been scheduled.

Presidium said in its initial application that roughly 43 percent, or 121 units, would be affordable to households earning up to 120 percent of the area median income. That includes 29 units that would be deed-restricted as affordable workforce housing units under the city’s inclusionary zoning ordinance. That ordinance requires 10 percent of the units be affordable to households earning 100 percent of the AMI, which in 2020 ranges from $70,630 for an individual to $100,900 for a family of four.

Using 2020 figures, rents for the inclusionary zoning units would range from $1,766 for a one-bedroom to $2,018 for a two-bedroom apartment.

Presidium’s initial application showed monthly rents for affordable units ranging from $1,400 for a 400-square-foot studio to $1,968 for a two-bedroom apartment and monthly rents for market-rate units ranging from $1,820 for a one-bedroom to $2,340 for a two-bedroom.

However, Rhoades said they submitted an updated application to the city on Thursday that lowered the overall unit count, but increased the percentage of affordable units. Preston said the percentage of affordable units would “drastically exceed” the minimum of 33 percent required to qualify for the TIF.

Neither Rhoades, Preston nor city staff, who were out of the office on either mandatory furloughs or taking vacation, were able to provide a copy of the updated application on Friday.

The proposed financing agreement is projected to return about $1.08 million a year to the developer, totaling $32.4 million over the next 30 years. That estimate assumes a 2 percent annual property tax increase.

The remaining 25 percent of the property taxes from the new development – about $273,000 a year or $8.2 million over 30 years – would flow to the city’s general fund to pay for services such as education, public safety and road work. The city would also receive an additional $8.9 million in so-called sheltering benefits, since the new value would not immediately be subject to increased county taxes or result in a reduction of state education funding and revenue-sharing, which decrease as a city’s overall value increases.

Although the Housing Committee received a presentation on the request in June, the council’s Economic Development Committee will be tasked with negotiating with the developers before deciding whether to forward a recommendation to the full council.

City Councilor Justin Costa, who leads the Economic Development Committee, did not respond to an interview request on Friday. And Greg Mitchell, the city’s economic development director who oversees TIF applications, was out of the office on a mandatory furlough day.

Rhoades said the financing agreement with the city would be crucial for the project to move forward as originally envisioned.

“Everything is on hold until we find out the answer on the TIF,” he said.

« Previous

Photo gallery: Heavy metal music and a midlife crisis

Next »

On this date in Maine history: Aug. 24