The Portland City Council unanimously approved giving a loan of just over $1 million to Youth and Family Outreach to help fund its plan to tear down its current building, above, the Preble Street Chapel built in 1851, and replace it with a six-story building housing an expanded childcare and 48 affordable and 12 market-rate apartments. Brianna Soukup/Staff Photographer

The Portland City Council on Monday approved a no-interest loan of just over $1 million from the city’s housing trust fund to Youth and Family Outreach to expand its child care and build affordable housing on the corner of Cumberland Avenue and Preble Street.

The organization is dedicated to serving low-income and otherwise at-risk children and families. The funding will go toward knocking down the current building – a nearly 175-year-old chapel – that houses the child care and preschool and replacing it with a six-story mixed-use building with an expanded child care facility and 48 affordable and 12 market-rate apartments.

Of those units, 29 will be affordable for people earning at or below 50% of the area median income – $51,000 for a two-person household. Nineteen units will be affordable for people earning at or below 60% of the median income – $61,200 for a two-person household.

Currently, the child care center operates out of the Preble Street Chapel, which was built in 1851. But the building is not in a historic district or designated as an official historic landmark. The city’s historic preservation board considered classifying the building as a landmark at its June 12 meeting, but opted not to.

The council unanimously voted in favor of the proposal. The organization will pay back the loan with no interest over a 30-year term.

When the proposal was originally brought forth in 2020, the organization’s plan would have preserved the chapel, but the project was amended to demolish the chapel after Youth and Family Outreach worked with MaineHousing on funding and realized it would be too expensive to preserve.

Mary Davis, the city’s director of housing and community development, said the decision was made to tear down the chapel because of cost.

“It came down to the costs of trying to save and renovate the chapel and attach it to a new building, those costs were too high,” she said at the meeting.

George Rheault spoke passionately during public comment urging the council not to fund the demolition of the chapel. “This 175-year legacy can be destroyed over night because it makes you look good,” Rheault said. “This thing is expendable because you can’t find another place to put 100 kids in this city?”

Councilor April Fournier spoke in favor of the proposal during the meeting.

“I can see no better way to support the neighborhood around that building than to help the working-class people in our city now,” Fournier said. “I think there’s a way that you can have both, you can create opportunities for the future while also preserving information about the past.”

Anna Bullett also spoke in favor of the proposal, saying that preserving the chapel is less important than supporting child care and affordable housing. Especially, she said, because the building isn’t in good shape.

“This building has had to be abated twice and the lead keeps coming back up. This is one of those instances where I think it is the right decision to say so long to the building and put up a nice picture to honor the memory.”

Youth and Family Outreach child care was established in 1986, but the organization had served Portland’s neediest residents for over a century before that under a different name. The new facility would allow the child care center, which reserves 60% of its slots for low-income families and prioritizes serving teen moms and homeless and immigrant families, to double the number of children it serves from 58 to 110 and provide space for other services to be provided.

The site of the project is already designated as an affordable housing tax-increment financing district but the district was amended by the council to allow for TIF funding of the most recent version of the project, updated from when it was first proposed in 2020.

Tax-increment financing is a common funding source for affordable housing projects. Tax revenues from new development in specific parts of the city can be diverted back to developers or placed in special municipal development accounts to pay for projects outside of the city’s regular budget.

FRANKLIN STREET

The council also voted unanimously to appropriate $250,000 as a 10% match for a federal grant application to overhaul the Franklin Street Arterial. The project was approved by the council nearly a decade ago but struggled to build momentum until recently. It would eliminate the large median, narrow the road and build new housing all along the street. This funding will go toward finalizing a design to submit to the federal government, which would ultimately fund the overhaul with multi-million dollar grant.

“I’m really happy to see that we’re at this step moving forward” Marcos Miller said during public comment. Miller has been a leader on the Franklin Street Redesign project since its inception.

Emma Morse also spoke during public comment.

“This will open up opportunities to improve the street’s safety for everyone,” she said.

During a brief discussion, Mayor Mark Dion spoke in support of the proposal and said it was critical to get the project going at long last.

“This will probably be a 10-year overnight success,” he said. “It’s a generational investment.”