Waterville’s transformation of its historic Lockwood Mills complex is moving forward with a second phase that will add 50 more housing units, including 40 affordable and workforce apartments for seniors and older adults.

North River Co. has secured funding and launched Phase II of the redevelopment on Water Street, continuing an effort to turn portions of the nearly 200-year-old mill complex into housing while preserving one of Waterville’s most recognizable historic properties. The new phase will redevelop vacant portions of the former Marden’s Surplus & Salvage building into mixed-income housing, with plans calling for 10 market-rate units and 40 affordable and workforce units.

The project builds on the first phase, a $40 million redevelopment that converted roughly 65% of the Lockwood Mills complex into 65 residential units, along with about 4,000 square feet of street-level commercial space. Those apartments include a mix of one-, two- and three-bedroom units, with affordable and workforce housing incorporated into the development.

For Waterville, the significance goes beyond restoring an old industrial building. The city is adding housing in an established downtown area at a time when communities across Maine are struggling to create enough affordable places for workers, families and older residents. Rather than building an entirely new complex on undeveloped land, the Lockwood Mills project is putting an underused historic property back into productive use.

The second phase is also specifically designed to address housing needs among older residents. That could help create additional options for seniors who want to remain in the community but may no longer be able to afford or maintain a traditional single-family home.

The redevelopment is part of a much larger wave of investment taking place in downtown Waterville. More than $200 million in public and private investment has gone into the downtown area in recent years, helping reshape the city through new housing, businesses and redevelopment projects.

The project is not without the financing challenges that have become common for affordable housing developments. The development team is seeking a 75% credit enhancement agreement over 30 years tied to the project’s tax increment financing. The arrangement is intended to strengthen the project’s financing and improve its position when competing for MaineHousing resources and affordable housing tax credits. The current development budget is close to $22 million, with more than $10 million expected from affordable housing tax credits.

If the financing and approvals remain on track, construction could begin in late 2027 and take roughly another year to complete. The development team is expected to submit its plans and grant applications in September, with funding decisions potentially coming later in the year.

The larger story is what Lockwood Mills represents for Maine communities with aging industrial properties. Historic mills that once sat vacant or underused are increasingly being viewed as opportunities to create housing without sacrificing the character of downtown neighborhoods. Waterville is showing how those buildings can become part of the solution to the state’s housing shortage while also supporting economic redevelopment.

With another 50 units planned, Lockwood Mills is becoming more than a historic preservation project. It is becoming a significant piece of Waterville’s housing strategy — and another example of how Maine’s older industrial communities are using existing buildings to create new housing for the people who want to live and work there.