SOUTH PORTLAND – With two offers on the table for the former Roosevelt Elementary School at 317 Pine St., the South Portland City Council on Nov. 4 took the one that was smaller by half, authorizing the city manager to enter into a purchase and sale agreement with Anew Property Development of Portland for $218,500.
The South Portland Housing Authority had bid $525,000 for the 86-year-old brick schoolhouse, but councilors appeared to have been swayed by neighborhood complaints that the housing authority’s plans for 40 senior living units and a 5,600 square-foot addition was too big a project for the residential neighborhood. Anew plans to add 3,650 square feet to the building, but will only create 19 market-rate condo units aimed at residents 40 and older.
Also factoring into the decision, Anew owner Ethan Boxer-Macomber claimed at a Nov. 13 council workshop that his company could “hit the ground running” and get the building back on the tax rolls in short order, while SPHA executive director Michael Hulsey acknowledged it could take more than a year for his agency to line up state and federal funding.
City staff calculated that the Anew deal would generate $522,500 in property taxes over the next 10 years, for a total value, when added to the purchase price, of $741,000. While SPHA is not required as a nonprofit to pay property taxes, it does routinely offer an annual payment in lieu of taxes (PILOT) to the city based on what its tax bill would have been minus the cost of public education, as its clients rarely have children in the school system. That would have meant $150,540 in PILOT payments, for total revenue of $675,540 over 10 years.
However, City Manager Jim Gailey had noted that the true value of an SPHA purchase could run to $858,164 over the next decade, when accounting for a so-called “tax shift.” At a Nov. 7 meeting, Gailey explained the shift as the resulting change in South Portland’s total valuation, once the Roosevelt School moved from city ownership to that of SPHA. The city’s valuation is used to calculate state education subsidies and revenue sharing, said Gailey, and moving the school to a nonprofit entity essentially erases it from the calculation, potentially boosting payouts by $30,000 per year.
In March, Maine Valuation Company of Standish predicted that, at 20 condo units, the Roosevelt School building would have a market value of $470,000.
The sale to Anew is not a done deal, however.
“This is not a closing on the property,” said Gailey of the purchase and sale agreement that expires June 30, 2014. “This allows the process to begin on [Anew’s] end, for them to do some due diligence for environmental purposes and also to get going on Planning Board review. And it allows staff to spearhead the initiative of a zone change.”
In May, the council agreed that, so long as any buyer maintained 1.25 parking spaces per unit and kept at least 30 percent of the 1.74-acre Roosevelt parcel in open space, it would go along with the zoning change needed to permit subdivision of the building into condo units, or apartments.
Current regulations in the residential zone around the Meeting House Hill neighborhood limit dwellings to four living units per acre. Absent a future council vote to create a contract zone excepting the Roosevelt property, the building would cap out at seven units.
Anew can back out of the purchase and sale agreement within the next 60 days if it finds an overabundance of hazardous materials, such as lead paint and asbestos.
“I’m glad that we are going in this direction,” said Blake. I’m especially glad that we reached out to the neighborhood on this to get maximum input.”
According to Boxer-Macomber, his company will preserve the school’s façade, but will not seek green-building certification, due to additional costs involved, estimated to top an extra $75,000.
“My goal is to make these homes affordable to people right here in South Portland,” said Boxer-Macomber,” unlike some of the units you see being built in Portland where, rumor has it, they’re being sold to people from out of state who want a second home up here in Maine. That’s not really my objective here.”
Although more than a dozen local residents spoke out at the Nov. 13 council workshop, only Russ Lunt, of Brigham Street, addressed the Council on Dec. 4.
“I’ve lived in that neighborhood my whole life, and I think this is a good fit,” he said of Anew’s proposal.
The city showed the school to nearly 20 prospective buyers, but just three submitted bids by the Oct. 17 deadline and only two were deemed worth considering, the third being for just $24,000.