Rising construction costs and the worsening condition of the Augusta Police Department building are jeopardizing plans to convert the Union Street structure into housing. Augusta Housing Authority officials remain interested in purchasing the property from the city, but not at the previously discussed price of $650,000. Joe Phelan/Kennebec Journal file

AUGUSTA — Plans to convert the Augusta police station into housing — and add over half a million dollars to city coffers — may have gotten rained, and priced, out.

While Augusta Housing Authority officials still hope to acquire the roughly 4-acre Union Street site, they are concerned the escalating cost of construction and the worsening condition of the old, leaky building, may mean they cannot afford to pay the city for the property. Or at least not the previously discussed figure of $650,000.

The organization is aiming to create 72 units of housing there after work on the new Augusta police station on Willow Street is completed and the department completes its move.

Amanda Olson, former executive director of the Augusta Housing Authority, said since the pandemic, construction costs have skyrocketed and made it harder to feasibly build affordable housing. Olson is now chief operating officer of Developers Collaborative, a Portland-based consultant working on the proposal for the authority.

At the same time, in the couple of years since city officials discussed selling the property to the housing authority, with a figure informally batted around at $650,000, the building has continued to deteriorate. Olson said the building has sustained severe water damage due to a leaky roof, to the point where the organization may need to demolish that building and start fresh, rather than acting on previous plans to refurbish the building.

“If it rains outside, it’s raining inside,” Olson said of the building during a June 8 discussion with city councilors. “There’s sections of wall that are falling down, ceiling tiles that are all stained. When there is a lot of water getting into the building we begin to get a little worried about using the existing structure. We had originally talked about a purchase price of about $650,000, and it might be difficult to make that number work given those two factors.”

However she said the authority remains interested in the project, especially if it can acquire the entire site. The six dozen new housing units would likely be spread between two buildings, with or without the old building being part of that plan.

Some city councilors said they believe the city needs to maximize what it can get in a sale of the property, to help offset other costs, but still expressed support for the housing authority developing the site for housing.

“The bottom line for me is to get the most we can for the building, to help us with our future costs,” said Ward 4 Councilor Eric Lind. “It sounds like you guys are putting a lot of thought into this. It’s a great location, next to the YMCA, near the parks, walking distance to a lot of jobs and the rail trail is right behind there. It’s a pretty awesome spot for housing, it really is. I look forward to seeing where it goes.”

Others said the city should seek to strike a balance between maximizing the return on the old building and helping to provide desperately needed affordable housing.

Amanda Olson, former executive director of the Augusta Housing Authority. Joe Phelan/Kennebec Journal file

“I’d like to see us strike the balance between getting everything we can, fundingwise, for the building and ensuring this project goes forward,” said At-Large Councilor Courtney Gary-Allen. “I think the most important thing we need right now is affordable housing, and if that means — and I’m just one vote on this council — if that means you guys need a little more leeway around that number to be able to make this project work, that’s where I’d stand on this issue.”

Olson said the next step for the authority, if it got a sense from current city councilors they were supportive of the proposal, would be to further develop plans and have experts look more closely at the existing building to assess its condition and determine if any project would use that building, or build completely new buildings.

Mayor Mark O’Brien noted that a majority of councilors, perhaps all of them, seemed interested in the housing authority moving forward with the proposal.

“My sense, and I hope your sense from the council, is proceed and come back to us when you have a little more detail and your plans are firmed up a bit and you know a bit more about the condition of the existing building, as well,” he said.

The housing authority’s offices are in the current police station building, and the authority would also be looking to refurbish or build new offices as part of the project if it acquires the site.

Olson also said the authority has been approached by a “very reputable” day care provider with a nearby location, which she declined to name, interested in having some day care space built as part of the proposed housing development. She said the provider would lease the space and use it as an “overflow” day care space.

Matt Nazar, development director for the city, said the new Augusta police station is on track to be completed in early February of 2024, with police expected to move in later that month.

The $650,000 sale of the building was included in city plans for how it would pay for the new station. However Susan Robertson, city manager, said the city got a good bid price for the new site and was also able to make a deal with Hannaford which had a long-term lease there, which together offset enough of the construction costs for the project to be funded without the additional $650,000.