The former Andrews School building in south Windham. The town of Windham seeks to replace this building with affordable housing units. Rory Sweeting / Lakes Region Weekly

Windham took a major step toward building a new set of affordable housing units by establishing a municipal tax increment financing district on the land where the town plans to build.

The housing would be built on the site of the former John Andrew School in south Windham. The site has not been used as a school since 2008, and although the main building, a wooden structure dating back to 1887, was demolished in 2016, a more recently built annex still stands and is today used by the RSU 14 school district for storage.

Earlier this year, Windham sent out a call for interested developers, to which Westbrook Development Corp. and Great Falls Construction responded and were selected as developers of choice. The developers will be using a modified program similar to the U.S. Department of Agriculture program for rural development, as the project does not qualify under the Maine state housing law program for major housing projects.

This, as Town Manager Barry Tibbetts explained at a Town Council meeting on Oct. 22, is because the scaling is based on a point scale, and south Windham is hurt by not having regular transportation or walkability to convenience stores. The village center, he noted, needs further development to get to an ideal level of support.

The property will be jointly developed, with each developer building their own set of rental units. Great Falls Construction intends to build five townhouses alongside a three-story, 12-unit apartment building, for a total of 17 affordable housing units. Meanwhile, Westbrook Development Corp., the sister agency of the Westbrook Housing Authority, plans to build 18 one-bedroom affordable units specifically for seniors. According to WDC Development Director Tyler Norod, the units will be built in four buildings, which he said will be built in a way that is “big on the New England-style vernacular” in order to blend in with the local community.

WDC is currently applying for funding from Maine Housing in order to make the project financially feasible, Norod said. Once the funding is awarded, WDC hopes to break ground next fall, and from there, construction should take approximately 12 months. The only major challenge that Norod foresaw was expensive site costs regarding leveling out the property, which is built on a slight slope, but he said that it was nothing WDC couldn’t handle.

Speaking to the Lakes Region Weekly, Norod said that WDC was “just trying to fulfill (its) mission (to provide) affordable housing to the community.”

The TIF district will be created as part of a state program designed to give local municipalities the tools they need to support affordable housing in their communities. Effectively, it splits the increases in taxes, based on the new value of the property, with 25% going to Windham’s general fund for municipal services, while the remaining 75% goes to the developer to reduce the rents. While there are no taxes on the currently vacant land, once the project is completed, the land will become taxable. The TIF allows WDC to take on more debt, which is needed to make the project a reality.

Norod said that the nice benefit of the TIF for the town is that when the town has new development, it impacts the money that the state gives each town for education and other funding. A TIF shelters the taxes on the new value on the property resulting from development for a specified period of time, so that state funding to education and town isn’t negatively impacted while the TIF is in effect. This, according to Norod, means that it doesn’t cost the town anything to give the TIF, but it means the world to the project.

The way the TIF was written was, if the council and the developer can come to an agreement on the latter part of the back side of the property for the 17 units, there could be some sort of special rate structure for housing to go in, and the town would not have to create a second TIF, Tibbetts said.