A long-delayed housing project appears poised to move forward in Portland’s Bayside neighborhood.

Mike Procopio, of the Lynnfield, Mass.-based Procopio Properties, said he’s looking to break ground on the 52-unit condominium project at 75 Chestnut St. by the end of the year. If all goes as planned, the $20 million Daymark would be finished in early 2022.

Procopio said the projected prices for the units would range from $450,000 to $750,000. He expects a lot of interest from out-of-state buyers looking to move out of more urban areas such as Boston and New York City. And Bayside, in particular, allows people to walk to stores, such as Whole Foods, or the bustling Old Port, he said.

“It’s almost like there’s this sudden realization that Portland is not far from Boston,” Procopio said Monday. “We saw this as an underlying trend before COVID and we don’t think it will change. COVID just made it more visible and really pushed it forward.”

The project was originally approved four years ago as rental housing and has changed hands several times.

Last week, the Planning Board approved a change in the development plan. Rather than building the six units for workforce housing required under the city’s inclusionary housing ordinance, Procopio will instead pay nearly $565,700 into the city’s house trust fund, which is used to subsidize affordable housing projects in the city.

Planning Board member Marpheen Chann was one of two board members who voted against the change, because he felt the developer should stick with the original development plan, which would have included deed-restricted units that are required to remain affordable to middle-income families.

To be eligible for those units, a household can’t earn more than 120 percent of the area median income – $84,756 for a single person or $121,080 for a four-person household.

“Based on the record before us, there wasn’t a satisfactory showing in my opinion as to why the original condition couldn’t work for the applicant and it sets the wrong precedent if an applicant can simply return and ask us to rubber stamp a change without a compelling reason,” Chann said in an email explaining his vote.

The project calls for 52 residential condominium units and a ground-floor commercial unit in a seven-story-building to be constructed on an undeveloped parcel between Chestnut Street and an existing parking garage. The development will include 38 two-bedroom, 12 one-bedroom and two efficiency units, according to planning documents filed with the city.

It is one of several housing developments in the pipeline for Bayside, a once-industrial neighborhood on the edge of downtown that is home to social service agencies and services. The site is one block from the city-run Oxford Street Shelter for homeless adults, a facility Portland has been planning to replace with a larger shelter at the edge of the city.

The project was originally approved in December 2016. At the time, the Portland-based A&M Partners planned to build 54 apartments and ground-floor commercial units. The company never released any projected rents, but said they were aiming for “the medium range.”

A&M Partners never moved forward with the project, however.

Instead, they sold it to developer Bernie Saulnier, of J&B Partners, in August 2018 for $1.25 million. But facing bankruptcy and allegations of embezzlement, which are still working their way through the courts, Saulnier lost the properties in a foreclosure auction in 2019. The project was bought by Ted Moore of East Marblehead, Massachusetts, for $25,000, though he also assumed responsibility for $3 million in combined liens.

75 Chestnut Street Owner, a limited liability company controlled by Procopio Cos., of Lynnfield, Massachusetts, purchased the property for $3 million in March.

That was before People First Portland, a political action committee formed by the Southern Maine Democratic Socialists of America and their allies, announced their plan to place five referendum questions on the city ballot that local businesses and housing developers have warned will increase costs and freeze most development in the city, except high end. The proposal include limits on future rent increases.

Procopio said the pending referendums would not affect this project because it’s already approved as condos, although the referendum questions might affect other projects he is considering in Portland.

Procopio said his company specializes in apartments, but he’s always envisioned building condominiums on Chestnut Street. He said it’s hard to get financing for apartment projects in Portland, because there are so few new apartment buildings for lenders to look at.

“We think Portland is a really strong condo market,” he said. “It feeds itself. It’s a really tough market to underwrite apartments in because there aren’t a lot of them.”

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