The project in Dunstan Corner calls for 50 affordable apartments and would preserve a historic home.

The historic Southgate House in Dunstan could be redeveloped to include a 50-unit affordable housing complex if the Scarborough Town Council approves the needed contract zone.

The council was set to hold a joint session with the Planning Board on Wednesday, after the Current’s print deadline, to discuss the details.

That meeting is an initial step in a long process, which includes both a public hearing at the Planning Board and Town Council level, according to Jay Chace, Scarborough’s senior planner.

The affordable housing proposed for the Southgate House is the second such project in the Dunstan area, with Habitat for Humanity of Greater Portland planning a 13-lot, single-family subdivision on town-owned land off Broadturn Road.

Avesta Housing, based in Portland, has purchased the Southgate House for $400,000. Kyle Ambler, a development officer with Avesta, said this week the planned redevelopment could cost between $8.6 million and $9 million.

The goal, he said, would be to restore the main house, while also preserving two of the barns located on the 3-acre site.

Ambler told the Current that a density of 50 units is the “minimum threshold” to make the redevelopment project financially viable. However, the zoning on the parcel would not allow that number of units, which is why Avesta is seeking a contract zone.

He said the idea would be to offer studio and one- and two-bedroom apartments to those who make between 50 and 60 percent of the area median salary based on household size. That equates to incomes between $27,100 and $41,760 annually.

The apartments would be available to anyone who met the income requirement, regardless of age, Ambler said.

Under the redevelopment proposal, the main house would include eight new apartments, while a new, 42-unit building would be constructed to match the architectural style of the Southgate House, which is located at 577 U.S. Route 1.

According to a letter sent to Town Planner Dan Bacon on behalf of Avesta, “The (redevelopment) project will address a number of important objectives identified in Scarborough’s comprehensive plan including preservation of historic structures and the diversification of housing stock in the community.”

The Southgate House, which was built by Dr. Robert Southgate between 1798 and 1805, is one of the historic structures in town recently added to Scarborough’s code of ordinances as a building worthy of preserving.

Ambler told the Current this week that the town “has expressed a desire for affordable housing and is also encouraging the rehabilitation of historic structures, and this project does both.”

He said the Southgate House redevelopment would be Avesta’s first project in Scarborough, and said the nonprofit is “always exploring new areas where affordable housing is needed, and this was the right site.”

Bryan Shumway, chairman of the Scarborough Housing Alliance, agreed and said, “Avesta’s proposal will create much-needed affordable housing in Scarborough and will preserve the historical integrity of a critical historic artifact. Avesta has a long track record of proactive development and responsible ownership. They will be excellent additions to our community.”

Ambler said the support of town leaders for the project is key to moving it forward, but also said, “a lot of steps need to fall into place first before any groundbreaking.”

He also said Avesta would rely on historic tax credits to pay for part of the redevelopment.

In its contract zone application Avesta notes that Dunstan is an “area that the comprehensive plan targets for increased residential use and the reuse of historic buildings that retain their historic character.”

In addition, the application states that the Southgate House is located along an intercity bus route originating in Biddeford and providing connecting service to the City Bus Service in South Portland and the Portland Metro system.

The application also says that Avesta’s redevelopment project “will provide a significant increase in the variety of housing stock” available in Scarborough, and that it will be “a high-quality project that preserves the significant historic character of the site.”

The application said that the additional residential density within walking distance of the Dunstan Corner village center will also help support the commercial businesses located there.

According to the Scarborough Historical Society, Robert Southgate came to town in the late 1700s and married Mary King, the sister of Maine’s first governor. The Southgate farm used to include all the land bordered by Route 1, Milliken Road and Payne Road.

Southgate was not only a farmer, but also, by the 1800s, had become interested in the law and was named a local judge. His house has also been home to Neal Dow, a noted prohibitionist, as well as a restaurant. Currently, the property consists of seven apartment units.

Under Scarborough’s contract zoning rules, the Town Council must determine that the project is “in the public interest and will have beneficial effects on the town which would not result if the property were developed under existing zoning requirements,” Chace said.

In reviewing Avesta’s contract zone request, councilors will have to consider whether the development will have a net positive effect on the town’s tax base; will create employment opportunities or otherwise have a positive impact on the town’s economy; and will enhance the variety of housing types available in Scarborough.

The council will also have to decide whether the redevelopment of Southgate House will foster demographic diversity; will have the effect of maintaining and enhancing property values; will be designed, constructed and maintained in a way that enhances its surroundings; and will preserve and maintain historical or archeological features, among other potential benefits.

The overall test for the council is whether “the contract zoning agreement will provide goods, services or amenities desirable for community life,” according to Scarborough’s code of ordinances.

Unless the Town Council decides to continue the discussion on the redevelopment proposal to another night, following Avesta’s presentation this week, councilors must hold a vote on whether the applicant can continue through the approval process or must withdraw or revise its application.

In other action Wednesday, the Town Council scheduled a public hearing on a contract zone amendment for the Piper Shores retirement community, set the date for the school budget referendum and ask the Energy Committee to review possible implementation of a pay-to-throw program for trash disposal.

The charge to the committee is to “study and recommend viable methods for achieving and reducing waste and saving money; prepare a town-wide plan and develop recommendations for the Town Council; and provide a report to the council one year” from now.

This story was modified to add a quote from Bryan Shumway, chairman of the Scarborough Housing Alliance.

The historic Southgate House in Dunstan could be redeveloped to include 50 units of affordable housing if a plan by Avesta Housing is approved.Staff photo by Kate Irish Collins