FREEDOM, Maine — Power from moving water, along with the attention of a retired banker, is giving new life to a historic building in the heart of town.

Tony Grassi of Camden is awaiting approval from the Federal Energy Regulatory Commission to install a 39-kilowatt turbine in the dam on the Sandy Stream, which flows out of Freedom Pond. The dam is adjacent to the old mill building, which Grassi is restoring, following state historic preservation standards.

In addition to the FERC approval, Grassi has sought approval for his Freedom Falls project from the state Department of Environmental Protection, and the federal Army Corps of Engineers, U.S. Fish & Wildlife, National Park Service and the National Oceanic and Atmospheric Administration.

“It’s all sort of slowly working along,” he said Monday of the approval process. Grassi took title of the old wood-frame mill building and dam on April 1. Town officials and residents have been helpful, he said, making zoning changes to accommodate the project.

The historic preservation standards were self-imposed — Grassi sought and won a listing on the National Register of Historic Places for the old mill building. He is taking advantage of federal and state tax credits for historic renovation, but the project is clearly a labor of love.

A retired investment banker, he left the business in 1990 — “when it was still fun” — and became what he calls a full-time volunteer. Grassi has been active in the Nature Conservancy and, beginning in the early 1990s, he and his wife Sally began working with the Horizons National Student Enrichment Program. In fact, they took the then-Connecticut-based program, which provides summer enrichment programs for students from kindergarten through 12th grade, to a national reach.

In addition to his other nonprofit volunteer work, Grassi has served as co-chairman, with BDN Publisher Rick Warren, of the fundraising committee for the Penobscot River Restoration Trust. He chuckles at the irony of working with that group to remove a dam on the Penobscot River while working to restore one in Freedom.

Grassi and his wife moved to Camden eight years ago.

The mill project first came to Grassi’s attention six or seven years ago when his son and daughter-in-law bought a neighboring property, where they now operate an organic farm.

The project also intrigued Grassi as a test case of sorts, he said. If he succeeds in landing commercial tenants, the now-quiet heart of Freedom could become active again.

“My hope is that other towns,” particularly those with old dams, “could do the same sort of thing,” and bring life back to historic villages.

The work has been daunting.

“The building was in really, really bad shape,” Grassi said, but was worth saving. “It’s a pretty dramatic piece of architecture,” he said.

“It had been a grist mill from 1834 until 1894 or 1896,” he said, “then became a wood turning mill, producing dowels and tool handles,” before that business failed in 1967. The building has been vacant since.

Using Belfast-based Cold Mountain Builders as a general contractor for the new construction portions and Preservation Timber Framing of Berwick to restore the post-and-beam frame, the mill building will eventually provide 4,000-square-feet of space on two floors. Camden architect Christopher Glass and Carmen Cherry of the Camden engineering firm Gartley & Dorsky also worked on the project.

Grassi said two separate tenants might lease the spaces, or one could lease both floors. Because the dam is expected to produce up to 80,000 kilowatt hours of electricity a year to the building, he believes businesses that use a lot of electricity would be appropriate tenants.

He suggests arts and crafts businesses, such as a glass-blowing or ceramics shop, or a bakery might be a good fit. In fact, Grassi particularly likes the idea of bakery, perhaps one using locally grown produce. He has been working with John Piotti of Maine Farmland Trust to plan uses of the building.

“The idea is to be done by the end of the year,” he said.