Marshview Terrace, a proposed 50-unit low-income senior housing project planned for 578  Route 1, suffered a major blow at Scarborough Town Council last week. 

At a July 16 meeting, the Town Council voted 5-2 to reject a proposed credit enhancement agreement between South Portland Housing Authority, the developer, and the town of Scarborough. The agreement, recommended by the Finance Committee, would have involved a 50% reimbursement of the property taxes of the value that the development would add to the parcel over 30 years. Liam Gallagher, the assistant town manager, clarified that it is not taking away money from existing taxpayers or refunding current tax revenue.

“In order to get anything, they would have to create something,” he said, adding that the housing authority would only get a rebate of a portion of the value that the project adds to the parcel. Mike Hulsey, director of the South Portland Housing Authority, said that with a 50% rate, there would be virtually no impact on taxpayers.

A credit enhancement is only possible with a Tax Increment Financing zone, or an area designated by a municipality to shelter new value added from property taxes for a fixed period of time. The property taxes raised from the new value added to the property are funneled into a fund designated for specific purposes like transportation infrastructure improvements. The council approved the first reading of a TIF in the Dunston area, a region with multiple undeveloped parcels.

Mike Hulsey, the director of the South Portland Housing Authority, said that without local support in the form of a Credit Enhancement Agreement, he’s unsure whether the project can move forward. 

Every year, Maine Housing allocates tax credentials from the IRS through its Qualified Action Plan. Because there are more applications than available funding, affordable housing developers in the state use a scoring criteria, with the highest-scoring projects regarded as the most competitive. An enhancement agreement would have boosted the Marshview Terrace’s score by up to three points, signaling to Maine Housing that the town stands behind the project. 

“It still has a shot, but it’s not as feasible,” said Brooks More, director of development with South Portland Housing Authority. This year, there are 21 pre-applications, and Maine Housing usually funds five projects annually. 

Hulsey said he was shocked by the council’s decision. “I thought we were doing something that the town needed,” Hulsey said. “We really thought we had the support of the Town Council.” 

Originally, the housing authority’s proposal for the parcel included 96 units, a four-story building with 60 units for ages 55 and older and three 12-unit workforce housing buildings. In May, the Town Council rejected the contract zone request, and the housing authority went back to the drawing board and came back with the 50-unit proposal. 

At the most recent Finance Committee meeting, the committee recommended the 50% credit enhancement agreement with a 30 year timeline. Two council members who sit on that committee —April Sither and Jonathan Anderson — supported the agreement in committee, but flipped at the council meeting.

In council discussion, both Anderson and Sither mentioned that it is the wrong time to be considering the project when there is an upcoming vote about overhauling local schools. 

“We’re trying to make some big choices for our community,” Anderson said. “While this is an important choice, when I have to think of it relative to other big choices that we’re making, I worry that this will become canon fodder for distrust with our public and work against us as we’re trying to do something important with the schools.” 

Public concerns 

The Marshview project has faced opposition since its onset. 

Opponents were concerned about how the population influx to an already crowded area would impact traffic, pointing to the property plan with a right-turn-only exit and right-turn-only entrance. Others took issue with potential environmental impacts. Some worried about flooding of the wetlands around the development. The concerns resurfaced at Wednesday’s meeting. 

More, in his presentation before the council, attempted to assuage these concerns. He said that 50 one-bedroom units is a “reasonable development of this property” and that the proposed development will have a lower impact than other potential projects that could fill the commercially zoned parcel. With a 55 and older population, there would be no impact on the schools and less traffic at high density times like mornings and evenings.

And he said that the housing authority actively addressed these specific grievances. It planned to improve the curb cuts to mitigate traffic concerns, and its design decreased the footprint of impervious surfaces to minimize environmental impact. 

“We don’t have bad motives,” More said. “We’re not here to ram something down the people’s throat. We’re just trying to build housing for people.” 

NIMBY-ism?

At the crux of the resident’s concerns was a desire to halt growth in Scarborough. 

“This is the wrong project at the wrong place at the wrong time,” said resident Sue Hamill in public comment. “We’re fed up. We’ve had enough. We don’t want any more housing.” 

Between 150 and 250 concerned residents have banded together in a lobby called Not So Fast, Scarborough, according to Don Hamill, one of the spokespeople for the group that formed in June.

Hamill said it attracted people who’d lived in the area for a while who didn’t want to see tax increases. But the campaign was also joined by people new to the area, young families who want access to services and are not comfortable with the pace of growth.

“It’s generated a lot of activity,” Hamill said. “And activity has generated results.” He pointed to the rejected credit enhancement agreement as evidence of their voices being heard.