TOWANDA - The $20 million planned project to redevelop part of the 400 block of Main Street in Towanda has now been downsized.

The plans for the project were scaled back because of the difficulty in securing funding for it, Towanda Borough Manager Tom Fairchild Jr. said at this week's meeting of the Towanda Borough Council.

The borough's developer for the project, the Trehab Center of Montrose, is now proposing to seek funding from the Pennsylvania Housing Finance Agency (PHFA) to construct an $11 million project at the site that would include a multi-story residential building with commercial space on its first floor, and a parking garage, Fairchild said.

The building, which would likely be three to four stories high, would contain 30 to 36 one- and two-bedroom apartments for the elderly on its upper floors, Trehab Executive Director Dennis Phelps said in an interview on Tuesday.

Trehab's earlier plans for the site had included the parking garage as well as a larger building, which contained market-rate and affordable housing apartments on its upper floors and commercial space on its ground floor.

Under the current plans for the parking garage, some of its spaces would be reserved for the elderly housing apartments, Fairchild said.

Under the terms of the financing that the PHFA would provide, the project would initially generate a reduced amount of property taxes, he said.

If the project were fully taxable, it would generate approximately $102,000 annually in property taxes, of which $23,000 would go to the borough and the rest to the county and the Towanda Area School District, he said.

Under the PHFA formula, the development would generate $40,000 annually in property taxes, of which a little over $9,000 would go to the borough, he said.

Fairchild said that it is his understanding that after 10 to 15 years, the property would begin generating the full amount of property taxes, and that it would then continue from that point on to generate the full amount of property taxes.

Fairchild said the current $11 million estimate for the cost of the project is "very preliminary."

By a 6-0 vote, the council on Monday approved the scaled back plans for the site.

"It (Trehab's current plans for the site) is something that will improve the downtown," Towanda Borough Councilman William Kovalcin Jr. said. "We'll still get some taxes on it. It will bring more people to the downtown. I think it's a win-win."

The borough has secured a $5 million state grant for the project, which is being provided through the Redevelopment Assistance Capital Program (RACP).

The project would be built at a site where a 2006 fire had destroyed or damaged several buildings. Those buildings have since been demolished.

Most of the land where the project would be constructed is owned by the borough. There is currently an unpaved municipal parking lot at the site.

The county will also need to approve the project, Phelps said.

James Loewenstein can be reached at (570) 265-1633; or email jloewenstein@thedailyreview.com.