BANGOR – Faced with the choices of reusing it or losing it, city councilors agreed Monday night to contribute toward converting the historic Waterworks complex into affordable housing.

The councilors’ decision to provide up to $1 million in support for the project, which will result in 35 efficiency units for very low- to moderate-income people, represented the last piece of the funding puzzle for developer Shaw House Inc.

Construction on the project, expected to cost nearly $6 million, is expected to begin in April, according to Doug Bouchard, director of the Shaw House, a Bangor shelter for homeless youth. Shaw House Inc. was awarded tentative developer status in June.

According to Bouchard, who has been heading up the project, Shaw House Inc. had assembled a funding package consisting of $3.6 million in low-income housing tax credits, a $600,000 Maine State Housing Authority grant, $350,000 from Shaw House Inc., and a $313,000 grant from the Federal Home Loan Bank.

The city’s contribution will bridge the gap between the project’s cost and previously available funds.

During Monday’s meeting, the council majority concluded that the city’s options were to contribute toward redeveloping the Waterworks, thereby preserving it, or spend a similar amount – estimated at $750,000 to $890,000 – to demolish it a few years down the road.

Another point in the Shaw House project’s favor was that it would help meet Bangor’s need for affordable housing, particularly for single individuals, an underserved population. Most of the subsidized housing available locally is geared toward families.

According to City Manager Edward Barrett, the city plans to minimize the use of local dollars by maximizing the use of money from other sources. Options include the federal Community Development Property Rehabilitation Loan Program, Community Development Block Grant funds earmarked for waterfront redevelopment, and tax-increment financing made possible through new taxes the project would generate. He said the city earlier set aside $123,000 for stabilizing the deteriorating building.

Bouchard said Tuesday that the units would be occupied by individuals 18 and older who are homeless or at risk of becoming homeless. Emancipated minors also will be eligible. Rent payments will amount to one-third of each renter’s income.

Each unit will consist of one room with a separate bathroom, he said. Tenants will also have access to community kitchen and laundry facilities as well as a sitting area, Bouchard said. The complex also will include conference rooms and office space for staff and various professionals who will provide services there.

Vacant for decades, the Waterworks consists of deteriorating buildings on the banks of the Penobscot River. Past attempts to redevelop the structures – the oldest of which was built in 1875 – have failed because of the high cost renovation costs proved too much for developers.