Housing committee recommends three affordable‑housing TIF credit agreements to full council

The Portland City Council housing committee voted to forward three requests for affordable‑housing tax increment financing (TIF) credit enhancement agreements to the full City Council after brief presentations and public comment.

Mary Davis, housing and community development staff, told the committee staff supports recommending 75% capture of new tax increment over a 30‑year term for each of the three projects and that the city’s underwriter has preliminarily reviewed project financials and is comfortable with that level of support. “City staff supports the recommendation, and I’m happy to answer any questions that you may have,” Davis said.

The committee’s recommendation comes ahead of an application deadline for the state low‑income housing tax credit (LIHTC) program administered by MaineHousing. Davis said the LIHTC application is due Sept. 18 and that TIF applications must be submitted to MaineHousing no later than Aug. 19 to receive scoring consideration that can award up to three points for projects that secure a local credit enhancement agreement.

Prosperity Place (Baron Center) Prosperity Place is proposed on a portion of city‑owned property at the Baron Center. The project would create 50 mixed‑income family rental units built to the city’s green building standards: 15 one‑bedroom units, 25 two‑bedroom units, 8 three‑bedroom units and 2 four‑bedroom units. Ten units would be set at 30% of area median income (AMI); 20 units at 50% AMI; 17 units at 60% AMI; and three units at 80% AMI. As required by the city’s request for proposals, 30% of units will be set aside for referrals from the city’s social services division. The developer told staff it intends to use TIF revenue to offset operating costs and to apply for 9% LIHTC through MaineHousing.

City staff estimated a year‑one assessed value at $7.6 million. Under the presented projection — which uses an assumed 2% annual mill‑rate escalator — the maximum estimated amount of captured revenue returned to the developer over 30 years is $3,540,301 and the non‑captured revenue (the portion that would flow to the city’s general fund) is estimated at $1,180,100 over the same period. Staff emphasized those figures are estimates and that actual annual revenue depends on year‑to‑year valuations and tax collections.

Comb Block – Cumberland (Phase 2) The Portland Housing Development Corporation requested a TIF for a seven‑story, 91‑unit building at 70 East Oxford St. (the Comb Block) that would serve older adults. The proposal describes a mixed‑income rental building with 81 units affordable at or below 80% AMI and 10 market‑rate units. Unit mix would include 45 studios, 41 one‑bedrooms and five two‑bedrooms. Nineteen units (about 20%) would be set aside for people experiencing homelessness or others with special housing needs, and 36 units would be designated for persons with physical disabilities.

The developer is requesting a “twin” LIHTC financing approach that would seek both 9% and 4% LIHTC awards for the same building to attract additional investor equity. Staff presented combined revenue projections for the twin request: estimated project development cost about $35 million, assessed value about $13.5 million, with approximately $210,000 per year (about $6 million over 30 years) captured and returned to the developer under a 75% capture assumption, and about $70,000 per year (about $2 million over 30 years) remaining as general fund revenue. The city’s underwriting review recommends a 75%/30‑year affordable‑housing TIF for the project.

Mayo Housing (Comb Block Phase 3) Mayo Housing, submitted as phase 3 of the Comb Block development, seeks a 75%/30‑year TIF to construct a three‑story building with 27 affordable units: 19 two‑bedroom units and eight three‑bedroom units. Ten units would be reserved at or below 60% AMI and 17 at or below 50% AMI. Twenty percent of the units would be set aside for people experiencing homelessness or persons with disabilities, victims of domestic violence, or others with special needs. The Portland Housing Authority would manage the completed building, which staff estimated would have an assessed value of about $4,225,000 and would return about $1.9 million to the developer over 30 years under the shown projections; general‑fund revenue was estimated at roughly $656,000 over 30 years.

Brownfields and site costs When committee members asked about earthwork and Brownfields costs for the Mayo phase, Portland Housing Development Corporation project manager Sarah Zatarzyk said the Brownfields remediation budget is being refined and that EPA Brownfields grants and a GPCOG revolving loan fund will pay some remediation costs outside the LIHTC project budget. “The Brownfields work is all across all three phases will be done outside of the MaineHousing LIHTC project and budget and scope,” Zatarzyk said.

Process, underwriting and next steps Mary Davis said the city’s underwriting analysis is not yet complete in final written form but that the underwriter has preliminarily reviewed the materials and is comfortable recommending the 75%/30‑year term for all three projects; the final underwriting memo will appear in the packet for the council first‑read scheduled July 14. Davis also said the city’s TIF policy requires applicants to demonstrate financial necessity and capacity and that a third‑party underwriting analysis be conducted for all credit‑enhancement requests.

Votes at a glance - Prosperity Place (Baron Center): Committee voted to recommend the creation of an affordable‑housing TIF district and credit enhancement agreement capturing 75% of new tax increment for up to 30 years; committee roll call recorded affirmative votes and the item was forwarded to full council for consideration. - Comb Block — Cumberland (Phase 2): Committee voted to recommend two 75%/30‑year affordable‑housing TIFs (the twin LIHTC request) and credit enhancement agreements; item forwarded to full council. - Mayo Housing (Phase 3): Committee voted to recommend a 75%/30‑year affordable‑housing TIF and credit enhancement agreement; item forwarded to full council.

The committee chair closed the meeting after the three recommendations; staff will include the final underwriting memo and the suggested motion language in the full council meeting packet on July 14, and the developers will proceed with MaineHousing LIHTC submissions with an Aug. 19 TIF application deadline for MaineHousing scoring consideration.