ELLSWORTH — Although the final papers won’t be signed until next month, construction has begun on the 50-unit “workforce housing” development on Washington Street behind Renys, where crews have been moving dirt and burning brush over the past two weeks.
The project is a joint venture of Manx Development LLC and the Portland-based Developers Collaborative, with the first units slated to be finished by September of 2018.
Construction was supposed to begin this summer, but was delayed after the price of tax credits crashed and construction costs increased.
“We’ve had to get creative with the financing,” said Kevin Bunker of the Developers Collaborative.
To deal with the financing issues, says Bunker, the companies adjusted the design of the buildings and took out a bridge loan.
To bring down construction costs, said Bunker, designers have removed basements from the building plans and converted some of the two-bedroom apartments to one-bedrooms. Twenty-four of the 50 units will now be one-bedrooms, with 16 two-bedrooms and 10 three-bedroom apartments. The price of the units will stay the same, in the range of $600-$800 a month.
The developers are also using a bridge loan to cover costs. Bridge loans are short-term loans often used to cover commercial development projects until longer-term financing can be secured. Bunker says the company anticipates having the loan paid off by 2021, or two years after completion. The loan will not affect the tax credits from the Maine State Housing Authority and the Department of Housing and Urban Development, which will still be used to fund the project.
The final papers will be signed in February, Bunker said, with 18 units completed by September and one building per month after that, to finish up in February of 2019.
“It’s coming together,” Bunker said.
Bunker praised Ellsworth city officials for their help with the project.
“I work in a lot of towns and cities, and the city of Ellsworth has been incredible,” he said. “They helped keep this thing alive. It’s a long drive from Portland, but it’s really refreshing when you get there because everyone is so welcoming and they just want it to go well.”