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February 11, 2021

Szanton Co. proposes first workforce housing in Cape Elizabeth in 50 years

a rendering showing a woman walking two dogs toward a large four-story peaked roof apartment building Courtesy / Szanton Co. A rendering shows a 49-unit apartment building, at left, proposed for Ocean House Road in Cape Elizabeth by Szanton Co. The building would be the first affordable housing built in the town since the 1970s, town officials said.

Portland developer Szanton Co. is proposing a 49-unit apartment building in the developing Cape Elizabeth town center, which would be the first below-market apartments built in the town since the 1970s.

The $12.5 million development would be part of the Ocean House Commons development that includes the new town green, next to the town hall on Ocean House Road, which is Route 77.

The land was subdived into four lots in 2019 by the town, with the intention of residential space being added. The development area, owned by dentist and developer David Jacobson, includes commercial space for his office and three apartment units that he developed last year.

“This is a great location for housing,” Nathan Szanton, Szanton Co. president, said. “It’s in the heart of town, just steps from a grocery store, pharmacy, library and eateries. The new village green is a wonderful amenity too.”

At a Feb. 1 town council workshop about the project, Szanton told councilors that the company has two lots under contract for a limited time, and is doing its due diligence to determine the feasibility of the project, not only logistically, but also whether "the will is there on the part of the council to partner with us to make this happen." 

The development would need zoning amendments and a tax increment financing agreement, under the recent state affordable housing TIF law, to go forward. There is already a TIF for the town green area, but a new one would be created for the project.

"We realize that we're asking a lot, we're asking a lot in terms of a zoning adjustment and in regards to the TIF, but also think that we would be bringing a lot," Szanton said.

Cape Elizabeth is looking to add more housing diversity, both in affordability and type — one of the goals in the town's 2019 comprehensive plan. The zoning amendments and TIF have to be dealt with, though the council, in general, said they liked the project during the workshop, which didn't include an official vote.

a yellow clapboard building on the left, with a parking lot and green space in front, at the back of the green space, a long four-story building with a peaked roof
Courtesy / Szanton Co.
A rendering shows a new apartment building, center, proposed by Szanton Co. for the Cape Elizabeth village green. The town office is at left.

Cape affordable housing needed

No lower-income rental housing has been constructed in Cape Elizabeth since the 1970s, according to Cape Elizabeth Town Planner Maureen O’Meara.

Councilor Penny Jordan said the project is “exactly what was envisioned during the work of the Comprehensive Plan committee," and that the density of the housing “would really bring the energy we need to the town center in order to have vibrant businesses."

"We will not have vibrant businesses until we have people around and engaging in the town center," she added.

Some councilors at the presentation were concerned, though, about the fact the apartments will all be one-bedroom, which would likely keep single parents and families from renting.

Szanton Co. partner Robert Monks, a Cape Elizabeth resident, said that the one-bedroom apartments are generally what the older demographic of the town, who  may be downsizing, can afford. Szanton added that the company has found that one-bedroom apartments are the most in demand in the Portland area. He said that there's a shortage of smaller apartments in the Portland market, as family sizes decrease and dynamics change.

"A lot of our one-bedrooms are occupied by couples who have downsized," he said.

The median home value in Cape Elizabeth is $608,564, according to Zillow, which reports that Cape Elizabeth home values jumped 14.8% in the past year. The website affordablehousingonline, which aggregates listings for those seeking affordable housing, lists one unit available in Cape Elizabeth, a subsidized unit at 50 Starboard Drive for a resident over 62, or over 18 with a documented disability.

Some 80% of the units would be rented at below-market rates to households earning below 60% of the area median income, or $42,180 for an individual, according to MaineHousing's 2020 numbers for the Portland area. For a family of two, 60% of the AMI is $48,180, and for a family of three, it's $54,180.

Rent for a one-bedroom apartment among those 80% would be about $1,040 a month, including heat, hot water, Wi-Fi, a fitness center and secure indoor bike storage.

The remaining 20% of the apartments would be leased at market rates regardless of income. Market-rate one-bedroom rents are projected to be about $1,495 per month, according to a Szanton news release.

Monks said the project is an opportunity to add much-needed affordable housing in one of Maine’s most expensive communities.

“Teachers, school staff, EMT’s, police officers, fire fighters and retail clerks who work in Cape are finding themselves priced out of town,” he said.

Cape Elizabeth’s elementary, middle and high schools, as well as the police and fire departments, are across Ocean House Road, representing hundreds of jobs, Szanton officials pointed out.

The project would have 34 parking spaces, and also propose 15 spaces shared with town hall, something that's allowed under zoning. The developers are also willing to create more parking at town hall at their expense, they told town councilors Feb. 1.

a snowy expanse with a real estate broker's sign showing lots with a large clapboard yellow building, cape elizabeth's town hall, in the background
Photo / Jim Neuger
Szanton Co. is planning affordable apartments for one of the lots on the Ocean Commons space in Cape Elizabeth. Town Hall is in the background.

A June 2023 opening target

If the project gets full town approval by the end of August, it would then submit its mortgage application to MaineHousing, with a projected construction start of April 2022, and tenants moving in by June 2023.

The planning board will review four requested zoning amendments, with the aim of returning the project to the town council by April 30.

Amendments are largely needed because the building has 49 units, making it a size that exceeds zoning limits for density, height and building footprint. Zoning also requires first-floor commercial space. The 49 units are necessary for the project to be financially feasible, Kristin Martin, of Szanton Co. told the town council Feb. 1. 

The town is also considering tax increment financing to offset a $750,000 in the project's financing and cost, with proceeds to pay the MaineHousing mortgage. The town green project has a 20-year TIF, in which some tax cost is returned to the developer for specified things like infrastructure. Under the TIF for the Szanton project, 65% would be returned over 30 years.

The plan is part of the overall town green project, nearly 30 years in the making, to create a vibrant town green in that area of Cape Elizabeth. The concept of the green first appeared in the 1993 town center plan. A variety of concept plans between 1993 and 2014 envisioned a pedestrian-friendly village area that could be a core of the town of 9,300.

The town green itself will be 20,000 square feet, taking up a little less than an acre of Jacobson's four-acre, four-lot site, and will front the property.

The Planning Board approved the first phase of the Ocean House Common project, Jacobson's mixed-use building, in December 2019.

The Szanton Co. has developed 11 mixed-income apartment buildings in southern Maine and New Hampshire since 2004, the most recent one to open is the Furman Block on Kennebec Street in Portland's West Bayside neighborhood. The company manages all of its properties through its in-house management company, Saco Falls Management.

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3 Comments

Anonymous
February 14, 2021

While Cape does need affordable housing, the scale of the building (26 versus 49 units) and only providing 1 bedroom units does not meet the current demand of young families wishing to send their children to good public schools. Why is the developer dictating the timeline and zoning changes that will permanently change the charming character that the town center planning committee created with its citizens? The process seems flawed. The scale of future town center buildings will be similar if the zoning is changed, as requested. The town should think long term about changing zoning for very large structures.

Anonymous
February 12, 2021

I think they're needed but not in the center of town where it's the only way into the schools and who wants to live across from the PD and fire departments. This should have been done on hill way vs ocean house rd. These were intended to bring more businesses in the community.

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