By Gail Geraghty

Staff Writer

A $4 million deal for a 21- unit senior housing complex in downtown Bridgton — one that would have replaced the unsightly vacant Chapter 11 building — fell through Tuesday, just as the ink on the contract was about to dry.

Chapter 11 building owner Zack Sclar, who also owns Food City, had negotiated a purchase and sales agreement with Avesta Housing Inc., one of the state’s largest providers of affordable housing. Avesta, which had initially eyed the Crocket Ridge property on the Harrison Road for the project, had been persuaded by Economic and Community Development Director Alan Manoian that developing the Chapter 11 site would be a win-win for both the project and the town.

Late Tuesday, however, the deal fell apart when Code Enforcement Officer Robbie Baker said the site was in the shoreland zone. Under the ordinance, each unit is required to have 50,000 square feet of property — and the Chapter 11 property, the site of the old A&P Store, doesn’t even come close to meeting those rules.

Baker said at Tuesday’s Planning Board meeting that since half the property is within the 250-foot setback to Stevens Brook, shoreland zoning applies even though the property is zoned general development. The stretch of the brook near the site is actually classified as a river, he said, because it is at the confluence of Long Lake and Willett Brook. Shoreland zoning density rules apply not only to any new development done at the Chapter 11 site, but to all other property on the brook side of Pondicherry Square, he said.

“It’s an extremely exceptional barrier to development,” said a clearly disappointed Manoian, who urged the board to immediately begin the process of having the ordinance amended. “We just lost a $4 million deal today. The investors can’t wait.”

Private investors had been lined up to work with Avesta by forming a limited liability corporation to fund the development, using various tax credit platforms. Because they, and not Avesta, would have built the complex, it would not have been tax-exempt, Manoian said; the housing would have brought in around $48,000 a year in tax revenue to the town.

Manoian said he hopes to convince Avesta to wait until next year, working with other investors, to revisit the project, providing voters agree ordinance.

“You have sympathetic ears here,” said Planning Board Chairman Steve Collins, who said the brook, while a definite asset, is nonetheless a constraint on development all along Main Street. “I think it’s a tragedy we’re losing a $4 million development, but it’s a heads up” that the town needs to get to work amending the rules, much as similar communities with downtown waterfront have done.

The first step, the board agreed, would be to invite a representative from the Department of Environmental Protection to town for a workshop. Baker said he’s talked to the DEP’s Michael Morse, who told him he’d be willing to come explain the process of amending density requirements for downtown properties.

Avesta’s project would also require an amendment to the town’s subdivision regulations for density requirements, but subdivision rule changes are regulations, and can be done at the board level after a public hearing is held. Changes to shoreland zoning rules require an ordinance amendment, and only a town meeting vote can make that change. The change also has to be approved by the state.

Because of posting requirements, there is not enough time to prepare for a town wide vote on an amended shoreland zoning ordinance this November.

Manoian said the Chapter 11 site was ideal because it would have provided seniors walking-distance access to all major amenities. In addition, Avesta was enthusiastic about working with the town on a new building, built close to the sidewalk line with parking in the rear, that would conform to form-based codes, which seek to preserve the pedestrian-friendly New England downtown character.

“One of the largest population demographics in Bridgton is older folks, and those age 65 and older are among the highest demographic group living below the poverty level,” Manoian said.