Diane Gotelli is a retired teacher and attorney from South Portland.
A 2025 goal of the South Portland City Council was to “Effectively repurpose the Mahoney Middle School grounds as a center for our entire community.” Another goal, repeated from 2024, was to “Expand affordable and moderate-income housing (for the missing-middle household in particular).” 2026 goals: “Continue with 2025 housing goals” and “Bring a city building bond referendum for the November 2026 election.”
Today, Mahoney City Center continues to be prioritized over workforce housing and all other goals. In 2025, the city approved 56 new market-rate units; not a single affordable workforce unit was built. Unlike a number of municipalities, South Portland has no ordinance or policy requiring for-profit developers to include below market-rate units in their housing projects. There are, however, mechanisms available to incentivize for-profit developers to build below market-rate units.
The city recently awarded Ocean’s 170 LLC a 30-year tax Credit Enhancement Agreement valued at $11 million, upzoning to six stories (from five) for 68 more units and a waiver from the structured parking requirement, saving the developer $40,000-$80,000 per parking space.
South Portland had leverage. It chose not to use it. All 208 studio and one-bedroom apartments (within walking distance to the planned Mahoney City Center) will be market-rate.
In contrast to the council’s year-after-year failure to meet its workforce housing goal is the way the city has devoted extraordinary staff and council time and public resources to a single initiative. The original plan of relocation and consolidation of City Hall and services ballooned into a mega, multimillion-dollar project.
South Portland Housing Authority presented the city a plan focused on affordable housing and historic preservation of the Mahoney building. South Portland Housing Authority submitted its proposal at the time the city had already spent nearly $200,000 on a facilities assessment that included $30,000 in COVID American Rescue Plan Act (ARPA) funds, and the city manager had asked the council to approve $4 million for the initial phase of the staff/council plan.
South Portland Housing Authority’s letter to the city: “Instead of approving this $4 million expenditure for a project not yet vetted or voted on by residents, please consider partnering with the South Portland Housing Authority. The proposal presented by the Director of the Housing Authority covers all the improvements and new facilities recommended in the Facilities proposal. And additionally provides much needed affordable housing. Always a good thing! And without a $70 million bond.”
The South Portland Housing Authority proposal was rejected. Not by residents, but by the recommendation of a consultant hired by the council. “Mahoney Reimagined” was launched: a select Mahoney City Center Committee was established, a marketing campaign was set in motion (including press releases, online announcements and facility crawls). Public funds were used or committed to pay for the initial planning/concept phase.
The $4.5 million that the council approved included $500,000 in COVID ARPA funds. The city’s Affordable Housing Committee had requested the ARPA money for the city’s Affordable Housing Trust Fund. The city manager, with council approval, denied the request.
The Affordable Housing Committee is considering disbanding: “This committee was formed 10 years ago to support affordable housing but there is no funding to support the work.” (4/3/2025 minutes.)
Most councilors acknowledge a $194 million bond is too much to ask an already tax burdened public to take on. Councilors admit that decades of deferred maintenance and lack of capital planning and investment have necessitated enormous replacement costs — an expense “not fair to put on public shoulders,” stated one councilor.
As the City Council considers whether to proceed with a variation of the current plan, demolish Mahoney or pivot to other options, it is time for clarity. Should we risk wasting more public money or involve resident stakeholders in deciding what is reasonable (size, scope, location) and affordable?
Read more on Portland Press Herald
