SACO — City councilors in Saco say they support the creation of affordable housing but are wary of transferring a specific city-owned property for that purpose, because $40,000 in bond money was used to clean environmental contamination there several years ago.

The land is about 1.32 acres of a 2.75-acre parcel at 32 Market St. Southern Maine Affordable Housing, an arm of Biddeford Housing Authority, had approached the city several years ago about acquiring the property in a quest to create affordable senior housing. There were agreements forged but the proposal did not materialize. The council discussed the matter in 2021 but had questions concerning the bond.

The City Council took no votes on the matter Feb. 28. Deputy Mayor Jodi MacPhail said the matter would be on a future agenda.

In 2013, according to City Council agenda packets from July 2021, the City Council agreed to enter into an agreement with Southern Maine Affordable Housing at minimal cost for the land, with the proviso that 10 percent of the resale of units be directed to a housing fund that would benefit future city efforts to encourage affordable housing. SMAH developed a plan for a 10-unit condominium project intended for downsizing seniors selling larger homes and looking for a smaller, affordable housing alternative. It is unclear what transpired in subsequent years. The project resurfaced last year.

According to the city’s assessment database, the city acquired the 2.75-acre property from Downeast Energy Corp. in 2012, which acquired it from Snowflake Canning Company in 1991.

Several councilors voiced concerns that transferring the property would flout the terms of the bond. The city did not acquire the property with bond proceeds but used $40,000 from the open space bond to clean environmental hazards.

“We all support senior housing,” said Councilor Nathan Johnston, “but I don’t view this location as the best place for it,” adding he believed doing so would be disingenuous, and said if the city did transfer the property, $40,000 should be deposited into the bond account.

“We have a fiduciary duty to our voters who clearly indicated recreational open space,” said Councilor Phil Hatch.

Councilor Michael Burman said turning down a program that provides affordable housing for seniors should not be taken lightly, but he said he recognizes the issues surrounding the 32 Market St. property.

According to the council, the proposal would have had been to transfer the property to SMAH for $1.

“Why do we have a developer friendly agreement in this market?” asked Councilor Marshall Archer, who suggested selling it at market value and investing the money into open space elsewhere.

Hatch said he thought the city could find an alternate site for affordable senior housing.

City attorney Tim Murphy said he proposed an alternative, in the vicinity of the intersections of Grant Road and Route 112, which he said could easily be carved off into four or five lots, “and with creative use of planning, could be a better site.”

Murphy spoke about the “optics” of putting affordable housing on a former waste site.

He said he doubted there was legal risk to the city if they turned over the property to SMAH, but there could be other repercussions.

“(If) you decide low-income housing is a priority and want to pass a bond, you’re going back to the same voters,” who passed the open space bond some years ago, said Murphy. “The risk is losing credibility with the very voters you depend on” for future proposals. “I think your collective credibility as a council is what will suffer a blow if you disregard the will of the voters.”

“We are all in support of senior housing, we heed to have a strategic plan,” said Johnston.