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In the News

Portland council votes again to approve tax deal for affordable housing in West End


The 7-2 vote – identical to the council's vote last month – will allow Avesta Housing to use 65 percent of the development's property taxes to operate the building at 17 Carleton St.

 

Portland Press Herald

By Randy Billings

September 21, 2015

 

The Portland City Council voted Monday night to reaffirm a tax break awarded to Avesta Housing last month for a 37-unit affordable housing project in the city’s prestigious West End.

The council approved the 22-year tax break – worth more than $700,000 and diverting 65 percent of property taxes back to the developer for operation of the building – by a 7-2 vote on Aug. 3, with Councilors Justin Costa and Jon Hinck opposed.

That vote was made, however, without an independent assessment of whether the tax break is needed. Such an assessment is required by the city’s Tax Increment Financing policy, so the council voted to reconsider the proposal.

The city received an independent assessment on Aug. 24 by Global Deal Funding LLC/Shamrock Development Associates Inc. of Braintree, Massachusetts. The firm concluded that the TIF district is needed for the project to get additional subsidies from the state and federal government.

“The project clearly creates affordable housing in an area of great need,” the firm concluded. “The project development sits among residential use areas and will provide a benefit to the neighborhood financially and aesthetically.”

Several West End residents spoke against the proposal. Some opposed tax breaks in general, while others – including Hinck – questioned the rigor and independence of the analysis.

He said the TIF district “could be fairly categorized a corporate welfare.”

Planning and Urban Development Director Jeff Levine said the consultant has been on retainer for the last two years and has worked on other TIF requests. He said he is confident that the analysis was unbiased and rigorous.

A majority of councilors agreed and the tax agreement passed by the same margin as last month. Councilor Kevin Donoghue noted that the only thing different about this affordable-housing TIF request is that the project is not proposed in a low-income neighborhood. He said the benefits outweigh the risks.

“All we get out of it is something that addresses our city’s more critical need – affordable housing,” Donoghue said.

Avesta Housing CEO Dana Totman has said the four-story development at 17 Carleton St., consisting of 37 units, will cost $6.5 million and that the tax deal with the city – along with tax credits – is needed to keep the rents affordable.

Units will be targeted to individuals and families who earn no more than 40 percent to 60 percent of the Portland area’s median income, ranging from an individual earning about $20,000 a year to a three-person family earning $40,000 a year, he said. Rents will range from $540 a month for an efficiency to $1,044 for a two-bedroom.

The project has drawn opposition from neighbors, mainly over parking. The project is planned on a 58-vehicle surface parking lot that’s now used by the area’s residents.

Residents are concerned about the loss of parking, and about increased demand, since only 31 parking spots will be available after construction. Some residents are also concerned with stormwater and sewer issues.

It’s rare for the council reconsider a proposal it has already approved, but it has now happened twice in Portland in recent months.

The council previously reconsidered a minimum wage proposal passed in July after learning it accidentally raised the base wage for tipped workers. It removed that increase earlier this month.

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