LEWISTON — A proposed 208-unit housing development off Farwell Street, which neighbors have resisted, will move forward after the City Council approved a tax increment financing deal Tuesday with developer David Gendron.

If ultimately approved by the Planning Board later this year, Gendron Active Living Estates would place 208 market-rate units in nine buildings on an 11-acre parcel between Farwell Street and East Avenue. The development would occur in three phases, depending on market demand.

City staff said Tuesday that while it’s planned as an age 55-plus development, Gendron will have the ability to change that should the market not support it.

The TIF agreement would return 75% of the new tax revenue generated to Gendron for the first five years, or until phase 2 is completed, whichever comes sooner. Gendron would then receive 65% of the revenue for the remainder of the 20-year agreement.

Lincoln Jeffers, director of economic and community development, told the council that the project would “not be economically viable” without the TIF, and the council largely agreed that the project was needed in order to bring more market-rate and senior housing to Lewiston.

Jeffers said the higher reimbursement rate during the first phase is due to the high costs of design and site work for the entire project, with only revenue from the first 64 units to cover that debt. The total project cost is estimated at $49 million, with the first phase estimated at nearly $18 million.

Over the life of the TIF agreement, it will reimburse $7.69 million to Gendron, with the city receiving $3.97 million in taxes. That would average $159,000 a year over the 25 years. Jeffers told the council the land is generating $2,400 a year in taxes. When the TIF expires, it’s estimated to bring in $990,000 annually.

In late 2023, the previous City Council approved a contract zone for the parcel to allow a higher housing density as well as commercial uses.

While the new zoning allows a density of up to 320 units, a memo to the council from Jeffers said studies done by the developers since then determined that the land can support 208 units.

Despite some concern from a few residents, the council voted 5-2 to approve the TIF, with Councilors Michael Roy and Tim Gallant opposed.

Roy, who said he lives in the abutting neighborhood, said the project will “forever change” a neighborhood that already deals with major traffic issues and pedestrian concerns along Farwell Street. Roy and Gallant also said they didn’t like the option that would allow Gendron to rent units to people under 55 if needed.

“With a school district that’s overcrowded already, that probably won’t go for me,” he said, adding that waiting 20 years to see a return on the development “doesn’t seem worth it.”

The developers said the units will be a mix of one- and two-bedrooms, which other councilors said would limit the number of families with children living there, if it was ultimately changed from a 55-plus community.

During the contract zone discussions last year, many neighbors were vocal about the impact the project could have on traffic.

In response, city staff said a traffic study was recently completed, and traffic improvements will include “signal timing and phasing adjustments at all intersections” in the study area; Americans with Disabilities Act improvements at all intersections; the installation of a rapid flashing beacon at the midblock Farwell School crossing; the elimination of left turns from the northbound Russell Street approach onto East Avenue southbound, and more.

Sharon Bell, who lives in the neighborhood, said she doesn’t believe the improvements proposed will help relieve the traffic that’s already there. She said the project is “heart-wrenching to people” in the neighborhood.

Those in favor of the TIF said Lewiston needs to encourage more market-rate housing, and the TIF is what is needed in the current climate to get it done.

“Do we want to see housing that’s paying tax in this area?” Councilor Josh Nagine asked. “It’s very expensive to build right now. In the long run, a project like this can return volumes, but it’s a challenge to get it up and running.”

“I’ve never heard of a project that the Gendron family started and didn’t finish,” Councilor Susan Longchamps said. “No matter where you put this, people won’t like it, at least at first.”

Councilor David Chittim said “spending money to make money” is done often in business.

“I do believe this is a needed investment,” he said, adding that he supports the TIF, but could also see himself commenting in opposition to the project at the Planning Board level.

Responding to a question from a resident, Jeffers said construction costs are the same all over Maine, but that Lewiston can’t get the rent prices of cities like Portland and others, so market-rate projects are more risky for developers.

A TIF approved by the council last year for Jason Levesque’s market-rate housing project on Middle Street will return 52% of the new taxes over the first 10 years to Levesque. In year 11, 50% of the taxes paid will be reimbursed, and then the reimbursement level will be reduced 5% annually in years 12 through 20.

According to Jeffers, phase 1 of Gendron’s plan would consist of 64 units in three buildings; phase 2 will be 80 units in three buildings, and phase 3 will be another 64 units in three buildings.

The project is expected to go to the Planning Board for development review this summer. If approved, site work for the bulk of the project and construction of phase 1 buildings would occur this fall.