10/6/2005 - Thursday, October 6, 2006

By MARK PETERS, Portland Press Herald Writer
Copyright © 2005 Blethen Maine Newspapers Inc.

A land deal that would bring student housing, offices, stores and parking to Portland's Bayside neighborhood won approval Wednesday.

The City Council agreed to sell three acres at Marginal Way and Preble Street Extension for $1 million to a development team that plans to build an office tower and two four-story buildings for student apartments.

The project is expected to help transform a mostly industrial area into a vibrant place. Councilors describe the project as a cornerstone in Bayside's ongoing redevelopment.

The project would have storefronts along Marginal Way. Atlantic National Trust plans 60,000 square feet of office space and a 460-space parking garage. The planned anchor tenant is InterMed, a medical group with offices in Portland, South Portland and Yarmouth.

Realty Resources Chartered is developing 106 units of housing for 405 residents. The buildings would draw tenants from the University of Southern Maine, the Maine College of Art and other colleges in the area.

Councilors approved the sale on an 8-1 vote, but questions remained over the project's details. Councilors had concerns about a proposed tax break, the amount of parking and whether students actually will want to live in private housing not affiliated with a college.

Although agreement was reached Wednesday on the property's sale, the developers still need project approval from the Planning Board. The council also must vote on the property tax break outlined in the sale agreement.

The tax break, known as a credit enhancement agreement, would let Atlantic National Trust recoup some of the property taxes it would pay to the city. It could get back as much as 50 percent annually, about $200,000. The amount would be determined by the difference between annual revenues and costs for construction and management.

Jack Lufkin, Portland's economic development director, said the agreement is intended to help offset additional costs that Atlantic National Trust would incur by following the city's suggestion for parking. City officials asked that the developer add spaces and place parking under the office tower.

Although the tax break drew some questions, parking for the student housing was a bigger issue.

The apartments would have 100 dedicated spots for residents. The remaining spots would be opened to college students from the evening to early morning, when the office building isn't being used.

Councilor William Gorham said the limited parking would cause students to seek parking in other parts of Bayside. "I have some real concerns with the parking issue," said Gorham, who represents Bayside. "You are building apartments with no parking."

Gorham tried to stop the sale, but mustered no support. Some councilors, however, agreed the project could create parking problems.

Staff Writer Mark Peters can be contacted at 791-6325 or at: mpeters@pressherald.com