The new apartments will be built on the second floor of the Key Bank building at the corner of Market Square and Water Street. Credit: Courtesy of Marc Scott

HOULTON, Maine — The Houlton Town Council is helping a developer seek funding to renovate part of a downtown commercial building into 10 apartments.

The town will file an application for a nearly $500,000 state Community Development Block Grant on behalf of Shiretown Properties LLC this week based on the council’s unanimous vote in favor of the action Monday, May 16.

The council’s decision comes after a tragic three-story multi-unit apartment building fire on Mechanic Street in March killed a 4-year-old boy and left 38 people homeless, making an already serious need for affordable housing in Houlton even worse.

Houlton Community Development Director Nancy Ketch said there is a tremendous need for more housing and that the proposed project would convert current commercial space to 10 residential units, with a sprinkler system, energy-efficient upgrades and parking area paving.

The new apartments will be built on the second floor of the Key Bank building at the corner of Market Square and Water Street.

To meet CDBG guidelines, 51 percent, or six of the units, would be designated for low-to-moderate income individual people or families, Ketch said.

Developer John Harvell stressed this is not state-subsidized housing. The vote in favor of applying for the grant money was held after a public hearing.


“I am very much in favor of this project. I think it’s an excellent repurpose of this building. It addresses affordable housing here in the town of Houlton, and I think it’s going to be an incredible boon to the downtown area,” Councilor Sue Tortello said during the public hearing Monday night.

If the project is funded, the current second-floor business tenants will move to other downtown locations.

Northern Lighthouse on the first floor is moving out of the building and Community Health and Counseling Services, currently on the second floor, will move into that space, Harvell said. This grant application is through the CDBG Housing Assistance Program. Although Houlton has been awarded other CDBG grants, this is the first Housing Assistance Program application the town has made, Ketch said.

The KeyBank building at 41 Market Square is for commercial use on the first and second floor and the third is residential. If the project proceeds, the second floor would become completely residential, requiring a new sprinkler system on both the second and third floors.

In March, the town submitted a letter of intent to the state regarding the funding and was then invited to apply. Ketch said this somewhat narrows the competition for the grant funds. This year, the Housing Assistance Program has $20 million that will be distributed throughout the state.

“The fact that we were invited to apply is a pretty good sign,” Ketch said. “It’s still no guarantee.”

The grant applications will be judged on a point system — community impact (40 points), development strategy (40 points), resident support ( 20 points) — and top scoring applicants will then be invited to participate in the project development phase. Still, this does not guarantee funding. Awards will be announced at the end of the development phase.

Ketch said the town will likely hear about the status of its application in late June.

“Because there is such a need, we are excited to be involved in the process,” Ketch said on Tuesday. “This project will be good for the community.”

Councilors Mark Horvath and James Peters were absent.