The approval would allow a 110-unit residential complex on the former Rich Tool & Die complex in Windham, if the Planning Board approves the project.

The Windham Town Council unanimously approved a South Windham contract zone Tuesday, allowing a Portland company to redevelop the former Rich Tool & Die buildings, pending Planning Board approval.

The Portland-based developer, Hardypond Construction, is seeking to build a 110-unit residential complex on the old mill site. But the 5.26-acre Mallison Falls Road site was zoned Village Commercial, which would allow about 74 dwellings on the property due to density restrictions, according to Planning Director Ben Smith.

Hardypond officials said a 74-unit project would be a losing investment, since it would not sufficiently cover the significant costs of environmental remediation and redevelopment.

On Tuesday night, the Windham Town Council voted 5-0 to approve the contract zone – Windham’s third – increasing residential density to allow for 110 units, reducing rear property line setbacks from 20 feet to zero, increasing the building height limit from 35 to 43 feet, reducing stormwater flooding standards, and reducing parking space setback standards.

“I think it’s wonderful,” said Councilor Donna Chapman. “I hope you get to follow this right through and get it done. Good luck. I’m hoping at least one of the old mill sites gets something done with it.”

Since Hardypond has not yet submitted a site plan application to the Planning Board, no board meeting has been scheduled to discuss or rule on the application. The developer will need site-plan and subdivision approval from the Planning Board in order to move forward with the project, according to Windham Planner Amanda Lessard.

“This is just one piece of the puzzle for them,” Lessard said.

Hardypond plans to invest about $12 million in redeveloping the four existing structures on the site and constructing two new apartment buildings, as well as other improvements, according to Frank Carr, the firm’s director of business development.

If approved, the developer would convert the existing mill building into a 48-unit apartment complex, the machine shop into a three-unit apartment building, the boiler house into a four-unit apartment building, and construct two new buildings that would contain 54 units.

According to Carr, the multi-family units will be available for rent at market rate, with about 30 percent of the units priced as “affordable” under the Maine State Housing guidelines. The developer will market the units to “up-and-coming” millennials, defined as people in their 20s and 30s looking to move out of urban areas, Carr said.

During a brief public hearing at the council’s Tuesday meeting, South Windham resident David Lydon raised concerns about traffic complications at the proposed site. The opposing driveway entrances to the property on Mallison Falls Road are located next to a granite overhead bridge abutment for the Mountain Division Trail that blocks the sight of oncoming traffic. Lydon said the abutment could cause serious problems for the dozens of new residents and other drivers on Mallison Falls Road.

“Right now, that’s a really hairy corner,” Lydon said. “You’re going to add all those people and put in all those units and your driveways abut that intersection with that bridge.”

Andrew Johnston, the principal engineer for Fay Spofford & Thorndike, a South Portland-based engineering firm representing Hardypond, said that a traffic study had been commissioned to deal with the potential problem. One solution, he said, is turning Mallison Falls Road, or at least a part of it, into a one-way road.

“We have a traffic analysis from Gorrill-Palmer (civil engineering firm) with a number of suggestions about how to alleviate the lack of sight distance coming out of that driveway with the existing bridge abutments,” Johnston said. “Some of those include pre-emptive warning signals at the exits. The actual favored option in that analysis is to potentially turn Mallison Falls Road into a one-way – or a portion of Mallison Falls Road – to eliminate the traffic coming west down the hill, which has been subject to accidents in the past.”

“I don’t like the idea of the one way,” Lydon responded.

Hardypond plans to start construction this fall, and open the redeveloped mill building next summer, according to Carr. The goal is to open the entire complex, which will be completed in phases, by 2017, he said. The company also hopes to build a small kayak and canoe launch and recreational area for public use on the Presumpscot River.

The developer is seeking to have the site listed on the National Registry of Historic Places, as well, Carr said. The first sawmill was constructed on the site in 1746. The brick buildings on site today were built in 1891, after three major floods and a fire destroyed a succession of 18th- and 19th-century sawmills. The site was subsequently converted into a woolen mill, and, for a short period in the mid-1930s, a cardboard storage center. During World War II, the Steel Products Corp. produced block and tackle pulleys on the site for the war effort.

Following the war, the property was successively owned by Baker Ice Machine Co., American Wheelabrator & Equipment Co., and Rich Tool & Die. In 1998, Buker Enterprises acquired the former mill site. Hardypond has signed a contract to acquire the site, assuming the contract zone is approved.