Winter Hill Star Market, abandoned for nearly two decades, soon to become affordable

Residents of Somerville’s Winter Hill have noticed something, or, more aptly, the lack of something, recently: The long-abandoned Star Market at 299 Broadway that has served as an eyesore for nearly two decades has finally been torn down.

And now, in place of the low-slung supermarket, work has begun on a big, mixed-use housing development, complete with plenty of affordable units.

A development team including Mark Development, Samuels & Associates, Beacon Communities, and Rise Together demolished the old Star Market building late last year, and have begun initial site work on the parcel, where they plan to build 319 new apartments across two six-story buildings, along with retail space and a new public plaza.

The project, the developers say, will inject new life into this part of Winter Hill, turning a long-decrepit parcel into a prominent neighborhood landmark.

“This is a neighborhood-defining development,” said Mark Development CEO Robert Korff. “It is really a great project in an ideal location.”

For many area residents, it’s a relief to see shovels in the ground instead of the shell of a building that cast a pall for decades.

One who’s especially happy about the forward progress at the site is Somerville Mayor Jake Wilson, a longtime Winter Hill resident who remembers when Star Market abandoned the property in 2008. For a time, there were discussions about turning the old supermarket into an Ocean State Job Lot, but those plans failed in part due to the previous building owner’s contentious relationship with the city. Putting housing on the site, which sits a half-mile from the Gilman Square Green Line stop in a largely-residential area, makes a lot of sense, he said.

“I suffered through all 17 years of a vacant Star Market,” said Wilson. “This is exactly the sort of project we wanted to see on this site, and the kind of housing we really want to see more of in Somerville.”

The project will replace the Star Market and its parking lot with two new six-story buildings. One of them, developed by Beacon and Rise, will consist of 115 affordable housing units — most of them aimed at low-income renters — and the other, built by Mark and Samuels, will house 204 apartments, most of them market-rate. Both buildings will include ground floor retail space, and the developers will also build a new public plaza and a pocket park. Documents filed with Somerville indicate the project will cost $107 million.

The project will rely on a unique financing model. When Mark Development bought the site for $22 million in 2023, Korff planned a standard market-rate project there. But it was around that time that the economics of housing development began to shift, with interest rates and construction costs soaring, and the institutional investors who finance market-rate projects beginning to pull away.

It became clear to Korff that it would be difficult to pencil out a market-rate project on the site, so he turned to Beacon Communities, one of the state’s top affordable housing developers, for help. By adding significant affordable housing to the site, the developers could access more pools of funding — including contributions from the state, the federal government, and Somerville’s Affordable Housing Trust. It also allowed the developers to only set aside 10 percent of the units in the second, market-rate, building as affordable, rather than the 20 percent Somerville typically requires. And the developers received a tax abatement from the city.

It’s the sort of model that more market-rate housing developers are considering as a tough financing climate stalls projects across the region. The funding sources behind affordable housing like the federal government’s Low Income Housing Tax Credit — while complex to access, and limited — are more reliable, even in challenging economic conditions.

“This is what it takes to get a project off the ground today,” said Korff. “This was an enormous undertaking. But these difficult deals can be the most rewarding. I love a challenge.”

For Beacon, the project was too good to pass up. The best affordable housing projects, said LeAnn Curtin, Beacon’s senior vice president of development, are ones that put good affordable housing in good locations. Tenants of the affordable units may not typically be able to afford an apartment as close to public transit as the Star Market redevelopment is.

“It’s an incredible intersection of where market demand meets good state housing policy,” said Curtin. “It was very complicated, but there was a great opportunity to unlock the potential for both the affordable side and the market side. We often joke that it takes a village to get an affordable housing project done. This one may have taken six or eight villages.”

Andrew Brinker can be reached at andrew.brinker@globe.com. Follow him @andrewnbrinker.