In this July 13, 2021, file photo, a man lays under a blanket beneath a highway overpass in Portland. Credit: Troy R. Bennett / BDN

PORTLAND, Maine — Despite a price tag higher than originally estimated, Maine’s largest city moved closer to realizing its longtime goal this week of building a large-scale homeless service center in the Riverton neighborhood.

Months after accepting a proposal from Developers Collective, a local development firm, the city’s economic and development committee approved building and ground leases Tuesday for a 51,000-square-foot, 200-bed homeless shelter at 654 Riverside St. The shelter would dwarf the size of the city’s Oxford Street Shelter in Bayside, which is operating at half its typical 154-mat capacity to observe social distancing.

Last month, Developers Collective gave the city a new project estimate coming in at $25 million, nearly $5.8 million higher than the firm submitted in a proposal in March, and $17 million more than city officials originally estimated in 2017.

But it could still cost less. City staff say the $25 million figure is a “not to exceed number,” with certain expenses subject to negotiation.

“That represents the cap, but we hope that we can get them a little bit lower assuming we’re able to reduce the costs of the project,” the city’s finance director, Brendan O’Connell, said.

After passing the committee, the City Council is expected to vote on the project lease on Oct. 18.

Construction for the project has not begun. If approved by council, developers estimate the shelter would open by December 2022.

“It is our collective goal to get people into this new facility before next winter,” said Drew Sigfridson, a principal with Developers Collective.

Last winter, city officials solicited bids for the 200-bed homeless service center as a public-private partnership. They have touted the proposed shelter as one that can offer comprehensive services to unhoused people, including behavioral health, medical health, a soup kitchen and substance use counseling.

City Manager Jon Jennings and other leaders have for years made it a goal to close the city-run Oxford Street Shelter in Bayside in favor of a larger, full-service shelter. The City Council approved the Riverton site in 2019.

The pandemic has worsened conditions for unhoused and other vulnerable people in Portland.

Portland housed an average of 200 people per night at hotel and shelter beds during the summer months, spending “more than a million dollars per month,” according to Jennings. The city was housing more than 700 people per month at shelters and hotels at certain points last winter.

Explaining the additional $5 million, Sigfridson called the March proposal a “very rough schematic concept.” The inflated cost of materials during the pandemic accounts for $1.05 million more than expected, with an additional $1.7 million to accommodate design requests from the planning board, fire and police departments and community members, according to Sigfridson. Another $750,000 goes to meeting energy efficiency standards, insulation and thermal protection related to the Green New Deal ordinance passed by the city in 2020.

The firm will continue to “work on value engineering strategies and other cost-saving measures to bring the total cost down” from the $25 million cap, Sigfridson said. An additional $5 million for the project would come from the American Rescue Plan Act, according to Jennings.

Plans for the Riverside shelter may be complicated by the passage of a citizen’s initiative on the November ballot that would amend Portland’s land-use ordinance to require all new shelters to operate 24 hours a day while limiting the size of most new shelters to 50 beds.

But Councilor April Fournier said that existing plans to build a full-service shelter would help vulnerable people now by helping reduce the number of hours that social workers and case managers use to locate people and connect them with health services, or help enroll them for benefits like MaineCare, SNAP, WIC and General Assistance.

“It takes hours and hours to get all that coordinated,” Fournier said. At a centralized location, “instead of going back and forth and missing appointments and rescheduling appointments, we’re able to meet people where they’re at.”

Fournier, who works as an early childhood specialist case manager for Maine Behavioral Healthcare, wished that the city had sufficient resources and funds to “give every person individualized attention,” and sees the shelter as a harm reduction solution for an urgent situation.

“I hear people that they want smaller [shelter] models and maybe one day we can get there,” Fournier said, “but I think we have an absolute critical if not crisis need in the city to have people housed and supported and able to make those connections.”

Correction: An earlier version of this report misstated the location of the proposed homeless services center.