PORTLAND — A proposed $3 million project to provide housing for veterans is moving forward on two fronts.

On June 2, City Councilors are expected to have a first reading on the creation of a tax increment finance zone at 134 Washington Ave. that could net $207,000 in operating revenue over 20 years for the nonprofit developer, Avesta Housing.

Then, on June 10, the Planning Board could vote on Avesta’s site plan to tear down a single-family residence it bought at that location in May 2013 and replace it with a four-story building containing 18 efficiency apartments and ground-floor office space.

The TIF proposal was endorsed by the council Housing and Community Development Committee on May 14. A day before, the housing plan was outlined in a Planning Board workshop.

The apartment building, built near the intersections with Fox and Walnut streets, would sit on lots totaling about a quarter of an acre. Rentals would be open to the public, but the agency wants to target military veterans, according to Planning Board documents.

TIF worksheets presented to the Housing and Community Development Committee on May 14 project the property will be valued at $844,000. The agency would like to retain taxes assessed on 50 percent of the valuations.

The TIF would be the third Affordable Housing Tax Increment Finance district in the city, according to Mary Davis, the city Housing & Community Development director.

Two other Avesta projects, 409 Cumberland Ave. and Pearl Place Phase I, were also granted TIFs. The Maine State Housing Authority must also approve the TIFs.

The efficiency apartments will be almost 340 square feet each and initially rented in the range of $525 to $675 per month. A cover letter to the Housing and Community Development Committee from Davis indicates rents for 10 units will be at or below 40 percent of the area median income, with the remainder at or below 50 percent of the area median income.

The footprint for the building is 3,000 square feet, and the four floors will amount to a 13,600-square-foot project. Parking will be on-street, except for two spaces in a driveway, with one reserved for handicapped use.

A loan of $522,000 to Avesta for the building was approved by councilors last September. The loan is a pass-through of U.S. Housing and Urban Development Department funds.

Avesta spokeswoman Mindy Woerter said additional financing for the project includes $1.26 million in state funding from the Green Affordable Housing Bond authorized by the Legislature in 2009, and about $1 million in state low-income housing tax credits. The bond funds and tax credits are administered by Maine Housing.

The project is also financed with $250,000 from Neighbor Works, which Woerter described as “a national network of affordable housing and community development organizations, of which Avesta is a member.”

Avesta Housing was founded as York Cumberland Housing 41 years ago and now owns more than 1,900 apartments in Cumberland and York counties.

David Harry can be reached at 781-3661 ext. 110 or dharry@theforecaster.net. Follow him on Twitter: @DavidHarry8.

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Avesta Housing plans to tear down this home at 134 Washington Ave. in Portland and replace it with a four-story building with 18 efficiency apartments. The agency is also seeking a tax break to operate the proposed building.

A rendering of the apartment building Avesta Housing plans to construct at 134 Washington Ave., Portland.