The Dunham Court affordable housing complex would have been built next to Cape Elizabeth’s Town Hall and overlook the Village Green on Route 77. Contributed / The Szanton Company

Developers scrapped plans for the Dunham Court affordable housing project in Cape Elizabeth this week following months of opposition and a successful call for referendum to overturn zoning amendments permitting its construction.

“It’s clear that Cape Elizabeth hasn’t decided whether it wants affordable housing in its town center,”  Nathan Szanton, CEO of The Szanton Co., said Tuesday. “So we’re reluctantly announcing today that we’re not going to fight the referendum.”

The Town Council will decide Dec. 13 on a date for the referendum to repeal the amendments, which address the height, footprint and non-commercial first-floor use of buildings in the town center.

The developer’s decision was celebrated by some residents and disappointing to others.

The Save Our Center group cited a number of arguments against the project, including its location not aligning with the town’s 2019 Comprehensive Plan, which emphasizes having a vibrant town center with a focus on commercial and retail use.

Cynthia Dill, who organized the petition for the referendum to overturn the amendments, referred a reporter to her statements on her website.

“Good riddance Dunham Court,” she wrote, while explaining her opposition.

“Everyone wants affordable housing and the recently updated Cape Elizabeth Comprehensive Plan marks a path to achieve it,” she wrote.

Opponents also took issue with the proposed tax break for the project’s developers through tax increment financing. The TIFs would have resulted in a portion of the tax revenue being rebated to The Szanton Co. over a period of 15 to 30 years.

“The developer of Dunham Court wanted the rules to be changed so it could maximize public subsidy instead of working within the rules to create housing for families that reflects our community values,” Dill wrote.

Resident Beth Tyler said she initially opposed the project, but changed her mind after “a lot of research.”

“I’m very disappointed to see the developers have pulled out. I think Cape’s really missing an opportunity to become the type of town that we really need to be and want to be,” Tyler said Tuesday, interviewed outside the Pond Cover IGA. 

Maureen Clancy, chairperson of the Cape Citizens for Affordable Housing group formed to support the Dunham Court project, said she understands the developer’s decision in light of the opposition, but she is “sad and disappointed” the project won’t be completed.

The town needs to do more to address the lack of affordable housing in southern Maine, Clancy said.

“We recognize the need for affordable housing is great and we believe Cape Elizabeth should do their part,” she said.

Arguments from those who supported the project include the need for foot-traffic in the predominantly commercial town center and the location’s proximity to vital resources such as schools, stores and a pharmacy.