WATERVILLE — North River Co. has secured financing with its partners and is ramping up construction on a $40 million project to develop the former Lockwood Mill at 6 Water St. into 65 affordable housing units.

North River has been working inside the building for many months on abatement and cleanup issues, but major construction was delayed because of several factors related to the COVID-19 pandemic. The public will now see much more activity at the site, according to Mariah Monks, a director at North River.

“This project was super delayed because of challenges with mostly construction pricing and all the challenges that came with trying to develop a property in the midst of COVID,” Monks said Monday. “It was a very long, challenging process, and we’re very happy to have closed on the financing and be full steam ahead on construction.”

The contractor for the project is Cianbro Corp., which is also replacing the Ticonic Bridge that is adjacent to 6 Water St. and spans the Kennebec River between Waterville and Winslow.

As part of the housing project, about three-fourths of the building is to be redeveloped into 29 one-bedroom, 22 two-bedroom and 14 three-bedroom units on five upper floors of the southernmost wing of the six-story building parallel to the bridge, according to Monks. About a third of the 65 units are expected to be completed in 2024, she said, with more units completed in 2025 and 2026.

“It’s a staggered opening, meaning units will be available over the next three years, starting at the end of 2024,” Monks said.

The work was initially projected to cost $30 million, but that figure has increased to the current estimate of about $40 million.

Rental costs will be tied to the local median income, and all the units will be marketed, leased and managed by the Waterville Housing Authority, she said.

North River worked on the project with the Maine State Housing Authority, an independent organization created by the Legislature to address problems with unsafe, unsuitable, overcrowded and unaffordable housing.

A commercial space is to be developed in less than 4,000 square feet of the building, according to Monks, and North River is talking with potential tenants for that area.

City Manager Bryan Kaenrath said Monday he sees the project as a major piece of revitalization because it will mean affordable housing within walking distance of downtown and lead to the redevelopment of a large building that has been vacant for years. The building, which is at the entrance to the city’s South End, is to serve as an anchor for continued revitalization efforts.

“It’s going to be a huge asset to our continued renaissance of Waterville,” Kaenrath said.

Garvan Donegan, director of planning, innovation and economic development for the Central Maine Growth Council, echoed Kaenrath, saying the project is poised to have a significant economic impact on the city and its downtown area.

“Beyond its aesthetic contribution to the skyline, this strategic investment is anticipated to further invigorate the local economy, providing projected noticeable benefits for the city, from increases in housing stock, population and downtown foot traffic, to creating supply and demand economic development opportunities,” Donegan said.

North River closed on financing with its partners last week and is using three types of tax credits: low-income housing, federal historic and state historic, according to Monks. Last year, the mill project was also awarded $1 million in federal American Rescue Plan Act financing.

North River also owns 8 and 10 Water St., the latter of which is the Hathaway Creative Center, the southernmost building of the three Lockwood mills. The building has 67 occupied housing units on upper floors and other entities throughout the building, including MaineGeneral Health offices, Cianbro Corp., Hathaway Mill Antiques, Valley Beverages, Bricks Co-Working & Innovation Space, Dirigo Labs, Curtis Construction, Swish LLC, Geno Typing and Minuteman Security.

Monks said brick work will be done on the 6 Water St. building, but most work will take place inside the structure, including replacing windows to historic standards. All materials used for the redevelopment will mimic original materials, she said.

The wing of the building that runs parallel to Water Street is to be redeveloped as part of a second phase, and plans for that wing are being finalized now, according to Monks. She said the wing is in better shape than the part of the building being redeveloped now.

A further phase also would include redeveloping 8 Water St., the building between the two others. Monks said that building is in better condition than 6 Water St.

“So it won’t be as heavy a lift as 6 Water St. has been,” she said. “That’d probably be phase three. We’re sort of in predevelopment planning for that phase.”

The three buildings were called the Lockwood-Duchess Mill complex, where textile manufacturing was conducted for many years, until 1956. The southernmost mill building on Water Street was home to C.F. Hathaway Co., a shirt and clothing manufacturer, from 1957 to 1992.

The buildings, built in the late 1800s, were designed by mill complex architect Amos Lockwood. North River bought the buildings at 6 and 8 Water St. in 2019 for $1.5 million from Paul Boghossian, who developed the Hathaway Creative Center. North River bought the center from him in 2017 for $20 million.

The northernmost mill building, at 6 Water St., was owned by Marden’s Surplus & Salvage, while Central Maine Power Co. used the middle building at 8 Water St.

North River is a privately held real estate investment and management firm based in New York City. The company also owns the Fort Andross Mill in Brunswick and mills in Portland, Boston and New York.

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