Condos pitched in Cape Elizabeth where affordable housing proposal failed

CAPE ELIZABETH — A developer wants to build an 18-unit, mostly market-rate condominium project next door to Town Hall and the new Village Green, on the site where a 46-unit affordable housing proposal withered last year amid intense and protracted community conflict.

The condo project would require the use of parking spaces behind Town Hall, which was an aspect of the affordable housing proposal that drew fire from opponents, while other residents in one of Maine’s wealthiest towns were eager to help address a regional housing shortage.

In the scuttled proposal, 37 apartments would have been reserved for low-income tenants, but only two of the proposed condos would be sold with “moderate” household income and price restrictions required by the town. Still, they would be too costly for most Mainers.

Greg Shinberg of Shinberg Consulting in Portland has submitted preliminary plans to build two three-story condo buildings with first-floor commercial space as required by town center zoning regulations. The Planning Board will take a first look at the proposal on Tuesday in a workshop session.

Shinberg also has asked the Town Council for permission to use seven parking spaces behind Town Hall and construct 16 additional spaces on a nearby grassy area where an ice skating rink has been installed the past two winters. The council will consider Shinberg’s parking request on Sept. 7.

Shinberg faces a major challenge in figuring out how much parking he will need for the two 5,000-square-foot, street-level commercial spaces. It’s especially difficult in a flagging commercial real estate market without committed tenants, he said Friday.

“Parking really drives these projects,” Shinberg told the council last week. “Parking is an uncertain part because I don’t have an end user for the retail or nonresidential use on the first floor.”

Suitable commercial tenants might be a child care center or day spa, he said, “(but) I just don’t know what my parking needs are going to be for the first floor.” Commercial tenants with greater parking needs wouldn’t be viable, he said.

Shinberg said he felt little risk in building housing given current demand, but he faces a “big risk” in developing commercial space without contracted tenants.

Shinberg is a well-known developer in southern Maine whose projects include the 110,000-square-foot InterMed office building on Marginal Way in Portland. He also developed the Village Green site in Cape Elizabeth and the adjacent 7,000-square-foot Two Lights Dental office building for Dr. David Jacobson.

Shinberg had submitted few details and no architect’s renderings of the condo project as of Friday. In memos to town officials, he said he has a purchase-and-sale agreement with Jacobson to buy two lots to the rear of the Village Green, which fronts on Ocean House Road (Route 77). The two lots total nearly 2 acres.

“I love the property,” Shinberg told the council. “It’s got great curb appeal.”

In November, The Szanton Co. of Portland, headed by Nathan Szanton, suddenly dropped its proposal to build the 46-unit subsidized apartment complex on the same lots. Szanton also is a well-known developer who specializes in building and managing affordable housing.

For several months opponents had fought the project, called Dunham Court, and by late fall they had gathered enough signatures to force a referendum on council-approved zoning amendments that would have allowed Szanton to build the complex. The council approved the amendments 5-2 so the project could exceed height and density limits and not be required to have first-floor commercial tenants.

The council has scheduled the referendum for Nov. 8, during the state’s next general election, to determine whether the zoning amendments should be enacted and applied to future development in the town center.

Supporters of Dunham Court thought the town center was exactly where an affordable housing project should be, near existing sewer lines and other public infrastructure and within walking distance of the local supermarket, pharmacy, public schools, community center, police and fire station, and Thomas Memorial Library. But the $13.5 million project drew significant pushback from opponents who criticized its location, size, subsidized financing through MaineHousing and request for a tax break from the town.

Some also opposed Szanton’s request to build a shared parking area behind Town Hall. In contrast, no one spoke against Shinberg’s similar request to the council last week – a difference that was pointed out during the meeting by former Councilor Jamie Garvin, who was chairman last year and supported Dunham Court.

Garvin called that difference “blatant hypocrisy,” though he emphasized his support for shared parking behind Town Hall because he and other town officials believe parking in the area has been overbuilt for current uses.

“What’s really unfortunate is how clearly this shines a light on the lost opportunity that resulted from the squashing of the proposed Dunham Court project,” Garvin told the council. “This is unfortunately an entirely predictable outcome.”

Shinberg said it’s too soon to say how much the condos will sell for, but he told the council last week that they would be priced below Maxwell Woods, a luxury development off Route 77 near the South Portland line where single-story detached condos with garages have sold recently for as much as $900,000.

A site plan of Shinberg’s condo project in Cape Elizabeth shows two buildings connected by a central elevator area and a shared covered front sidewalk and entrance. Residences would be on the second and third floors. A concept plan shows four one-bedroom, 500-square-foot condos, and 14 two-bedroom condos ranging from 750 to 1,200 square feet.

Two of the condos – a one-bedroom and a two-bedroom – would be sold with “moderate” household income and price restrictions required by the town, said Town Planner Maureen O’Meara. Eligible buyers could have a maximum household income of $111,600, and the maximum sale price would be $378,781, at current rates. The median household income in Maine is $59,489 – less than half the $127,363 median in Cape Elizabeth.

Dunham Court would have been the first affordable housing project in Cape Elizabeth in 50 years, at a time when affordable housing has become extremely scarce in Cape Elizabeth, throughout Greater Portland and beyond.

In 2021, MaineHousing considered fair market rent for a two-bedroom apartment in Greater Portland to be $1,592. The agency defines “affordability” as housing that doesn’t cost more than 30 percent of household income.

In Cape Elizabeth, tenants needed a yearly household income of $92,000 to lease a median-priced, two-bedroom apartment, which runs about $2,300 per month including utilities, according to MaineHousing. Prospective homeowners needed a yearly household income of $174,000 to buy a median-priced home of $625,000.

At Dunham Court, 80 percent of the apartments would have been reserved for households below 60 percent of the area median income, or $42,000 for one person, $48,000 for two people and $54,000 for three people.

Nine apartments would have been leased at market rate. Subsidized rents, made possible through government financing, would have been $1,080 for one bedroom, $1,299 for two bedrooms and $1,495 for three bedrooms; market rents would have been $1,495 for one bedroom and $1,695 for two bedrooms.

Szanton declined a request to discuss the new proposal for the site.

Cynthia Dill, a town center resident who led opposition to Dunham Court, said she wishes Shinberg luck but questioned why he needs 23 additional parking spaces.

“(I) support the development of the town center consistent with our zoning ordinance and the comprehensive plan,” Dill said Friday in a written statement.