If signed into law and funded, LD 2106 would increase the per-project cap on the Maine Historic Property Rehabilitation Tax Credit, a program created in 2008.
LEWISTON, Maine — Most people see a sad salute to an industrial past when they look at old, abandoned mill buildings, but not Nathan Szanton. He sees an opportunity to create a brighter future for Mainers.
Monday morning, amidst a heavy dusting of freshly-fallen snow, Szanton visited one of his latest visions at the Continental Mill in Lewiston. It hugs the Androscoggin River and looks nearly the same as it used to from the outside. Inside, though, is where the magic of rehabilitation has already begun.
"We know that housing is one of the absolute essentials of life," Szanton said, later adding, "We absolutely have to provide housing for everybody in the state, and right now we don’t have enough housing for everybody.”
It's clear: Szanton is passionate about housing. He went to law school years ago, only to leave the legal field eventually and enter the real estate business. Now, he's the president of The Szanton Company, a real estate development firm that specializes in affordable housing.
Last year, Szanton bought about 15 percent of the Continental Mill from the company that owns the rest of the structure. Since then, he has been working on the Picker House Lofts project, which will consist of 72 units once it's completed next spring. Szanton said about a third of them will be market-rate, and the others will be for people who make less than 60 percent of the area median income.
“It’s got a great location, right on the Androscoggin River. It looks out over the river. It’s walkable to downtown," Szanton said.
Szanton said this project wouldn't have been possible without the Maine Historic Property Rehabilitation Tax Credit program. It essentially gives building owners and developers back a percentage of what they spend redeveloping historic buildings to help them pay for the project. For affordable housing projects, the state tax credit is 35 percent.
“There are many, many opportunities all around the state to turn older buildings into affordable housing because Maine is an old state. Maine has a very old housing stock and building stock," Szanton said.
The problem, though, according to Szanton, is that there's a cap on what a developer can receive per year per project. When this program was created in 2008, it was set at $5 million. It hasn't changed since then.
Szanton said that has consequences these days in a more expensive world, like slowing down development. For example, he said Picker House Lofts is generating $9.4 million in tax credits, but Szanton can't get all of that in one year.
"We had to stretch out the construction of this over a two-year period," Szanton said, later adding, "Mills, historic schools, grange halls, old libraries–anything that can be repurposed into another use often will generate more than $5 million.”
Now, there's a bill in Augusta to address this issue. Senator Peggy Rotundo, D-Lewiston, is the sponsor of LD 2160, which would raise that $5 million cap to $10 million.
"If we’re really going to move forward in terms of economic development, we have to have affordable places for workers to live," Rotundo said.
Rotundo said between 2009 and 2019, the tax credit program helped to create 1,300 affordable housing units statewide. She said she hasn't heard much opposition to her bill but is concerned about whether it would get funded.
"It’s always a challenge to find funding for ongoing programs, but when it’s important, we bring the legislation forward regardless," Rotundo said.
Laura Mitchell, the executive director of the Maine Affordable Housing Coalition, testified in favor of the bill last week. She said the idea makes sense to adjust for inflation.
"The costs have in fact doubled, so just to continue to offer and build the units that were intended in 2008, the tax credit needs to increase," Mitchell said.
She said if the bill is signed into law and funded, the Continental Mill alone could house more than 400 apartment units.
"There’s this opportunity for economic growth, hope, prosperity," Mitchell said.
You can read more about LD 2106 here.