An Ellsworth workforce housing complex that would offer 23 discounted units to low and median income residents is moving forward with the city’s recent bid for a $1,000,000 state grant.
A 36-unit condominium — 13 apartments of which would be sold at market rate — is planned for the southern end of Beals Avenue in Ellsworth. The project’s construction timeline is uncertain as the site’s developer, LB Ellsworth LLC, can’t break ground until they’ve acquired supplementary funding.
The city is supporting the private development project because it addresses a local need: affordable housing for working residents. The project is the city’s latest push to tackle Ellsworth’s soaring housing prices that have saturated the local market, forcing many low and moderate income residents out of the city’s limits.
The state funding would be used to build an access road off Beal Avenue — which LB Ellsworth might turn into a public road once construction is complete — and for sewer, water and electrical infrastructure.
The city applied for the state funding on the company’s behalf. Only municipalities are eligible for federal Community Development Block Grant money, which is administered through the state.
Twila Fisher, the city’s economic development director, said the project — like many low and median income housing plans — was delayed because of high infrastructure costs.
A public-private partnership gives the project a “fighting chance,” Fisher said.
The Ellsworth City Council voted 5-2 Thursday night to authorize Fisher to apply for the state funding. Councilors Steven O’Halloran and Patrick Shea opposed the motion.
Because the project is aimed at offering low and median income housing, LB Ellsworth needs extra funding to offset construction costs that won’t be covered by selling the units. If state funding isn’t awarded, a separate funding source would have to be found or the project would not proceed, according to Dan Black, a partner with the company.
“Right now, we do have a gap in our financing,” Black said. “Essentially, it’s difficult to build homes for $425,000 per unit, and sell them for between $250,000 and $280,000 per unit.”
The public infrastructure funding would not involve any taxpayer money, Black said. The grant application requires a $250,000 match, which Black said his company would absorb.
Black said he also is brainstorming the design of a “pocket-park” on the property abutting the road, providing residents with a public playground or other recreation space. The area is bordered by the Down East Sunrise Trail, a 96-mile trail stretching from High Street to Perry, the eastern edge of Washington County.
Nineteen of the townhouse-style units — which will each have two to three bedrooms — will be sold to families earning 80% or less of the area median income, which is $77,100 per year for a family of four in Ellsworth, Black said.
The annual household income needed to afford a median home price in Ellsworth is $124,149, according to the city’s 2024 housing needs report. Yet the city’s median household income is $77,375, according to the United States Census Bureau.
Fisher said the project would “encourage infill and reuse of underutilized land” and “create attainable purchase options for area teachers, service workers and hospitality staff, among others.”
The units would be sold — not rented — with deed restrictions barring owners from selling their unit at market-rate the following year, City Manager Charlie Pearce said.
A couple of neighbors of the Beals Avenue site challenged the proposal in 2024 over concerns it could harm wetlands on the property and the streams leading to the Union River. The project was later allowed to proceed and has since received permits from the Maine Department of Environmental Protection and the U.S. Army Corps of Engineers.
Local governments are eligible to apply for the state’s block grant program, except for “entitlement communities,” like Bangor, that are large enough to bypass the state and receive community development funding directly from the federal government.
The $1 million Ellsworth is applying for is the maximum allowed per project through the Public Infrastructure Grant Program, which is administered by the state’s Office of Community Development. The amount is one third of the total funding available statewide through that particular grant, according to the grant’s 2026 program statement.