BELFAST — Councilors approved creating a tax increment financing district at 32 School  St. upon first reading at their July 20 meeting. It would consist of only the Belfast Birches property.

Belfast Birches is a 24-unit affordable senior housing facility operated by Realty Resources. Economic Development Director Thomas Kittredge said the company is applying for a Maine State Housing Authority credit enhancement agreement and having the TIF district over the property would increase the company’s chances of being approved for the credits.

The company intends to improve and rehabilitate the existing buildings but not expand them, Realty Resources CFO Bill Pearse said. The facility will become more ADA-compliant with the addition of an elevator and redevelopment of nine units to make them conform to the Americans with Disabilities Act. Realty Resources plans to relocate tenants who need to be out of the apartments during renovations, Development Officer Nichole Lorentzen said.

A TIF district is a financial tool that allows towns to leverage new property taxes generated by a specific project or multiple projects in an area to be used for public or private projects, according to the Maine Municipal Association’s website.

If it is approved on a second reading, the affordable housing development district would be called the School Street Affordable Housing Development and Tax Increment Financing District and 50% of the TIF funds generated yearly would go to the development for the next 30 years, while the other half of the funds will go into a revolving loan fund or investment fund to assist in the development of affordable housing in Belfast, Kittredge said.

Affordable housing has been a top priority of councilors for several years and they have taken several measures to attract and assist such developments. The city created the same type of TIF districts for affordable senior housing projects on Wight Street and an affordable housing project on Congress Street. Realty Resources has about 111 affordable units currently, among all of its Belfast properties, Lorentzen said.

Councilor Mike Hurley does not think the TIF district is just to help Reality Resources. To him it is an insurance policy that Belfast Birches will remain an affordable senior housing development. “I’m supportive of this, both because I want to support it staying as it is,” he said. “… Also, it bodes well for the future that we’ve got some income.”

Councilor Neal Harkness supported what Hurley said, adding “We’ve seen other places in Belfast transform and this is, I think, the most serious problem we’re facing in the community, … the housing shortage and particularly the affordable housing shortage.”

He thinks the only way the city is going to attract affordable housing developments is to reduce the mill rate. Sometimes there are priorities other than finances, he said.