An apartment complex under construction last year on Surry Road in Ellsworth. A Portland developer who just completed a 50-unit complex in Ellsworth is proposing another, 51-unit apartment complex.

ELLSWORTH, Maine — The developer of one of the biggest housing projects in city history has proposed another one: an $8.7 million, 51-unit apartment complex he hopes to finish building by the end of next year.

Kevin Bunker of Developers Collaborative, which is based in Portland, has applied for a permit to build a 51-unit housing complex on Foster Street behind Shaw’s supermarket on High Street. The proposed Foster Street Apartments complex would mix 24 two-bedroom apartments in two buildings that would rent at market rate, about $1,300 a month, with 27 single-bedroom affordable senior citizen apartments in a third large building, Bunker said.

The proposed development continues a recent housing boomlet in Ellsworth, the Hancock County seat and service hub for the area, which city officials said has been spurred by a local housing shortage and the development of The Jackson Laboratory’s Charles E. Hewett mice breeding center. The center opened in 2018 and will eventually have as many as 350 employees, adding to Jackson Lab’s staff of about 1,400 workers in Bar Harbor.

Credit: Nick Sambides Jr.

“We want to take advantage of the job market there,” Bunker said. “We don’t think there is enough rental market in town to support those jobs.”

In addition to the market-rate apartments, Bunker said he was drawn to building more senior housing in Ellsworth because there’s also a need for that. A 2015 housing study commissioned by the city found Ellsworth had only 218 lower-income rental units available for seniors. It estimated that about 300 senior Ellsworth households had a high housing cost burden, spending 30 to 35 percent or more of their income on housing.

Another catalyst: state money that’s now available to support the development of housing for seniors after Gov. Janet Mills in January authorized the release of $15 million in senior housing bonds approved by voters in 2015 but blocked by her predecessor, Gov. Paul LePage.

That state money is starting to trickle down into Maine communities, and the Foster Street Apartments would be a good fit, Bunker said.

As part of his proposal for the housing units intended for seniors, Bunker plans to apply for a tax increment financing deal with the state and city that the City Council will have to support. City Manager David Cole said he will advise the council to accept that idea, but the negotiations have not happened yet.

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“It is important to be competitive [with other communities that want to attract developers], and he has a pretty good track record with the city,” Cole said. “Jackson Lab is still early in their growth spurt. The key to growing jobs is people, and you need housing to support them.”

The city’s support of the project with a tax increment financing district will be an important factor in determining whether Developers Collaborative qualifies for the state money, which is highly competitive, Bunker said. He declined to say whether he could or would still build Foster Street Apartments without the tax increment financing arrangement or bond funding.

“We will cross that bridge when we come to it, but I wouldn’t ask if I didn’t need it,” Bunker said.

The tax increment financing deal would give Developers Collaborative a property tax break while shielding the new property value the development creates from state calculations for Ellsworth’s school aid and municipal revenue sharing. Because those amounts generally decline with increased property values, the sheltering of the new property value allows larger amounts of state aid to continue flowing to Ellsworth.

The city already approved a tax increment financing zone for Oriole Way, a $9 million, 50-unit apartment complex also built by Developers Collaborative. That development included two- and three-bedroom apartments on Washington Street behind the Renys on High Street. Bunker purchased half of a large lot to build Oriole Way. The Foster Street Apartments will fill the rest of the lot, Bunker said.

The Oriole Way project, one of the city’s largest, was completed earlier this year and was fully occupied as of May or June, Bunker said.

The Planning Board will meet at 6:30 p.m. Oct. 30 at City Hall.