New London — A planned affordable housing complex on Bayonet Street in New London has received a sizable financial boost from the state.

The State Bond Commission at its Dec. 18 meeting approved a $4 million grant from the state Department of Housing that will help fund the first phase of a 64-unit complex under development by Eastern Connecticut Housing Opportunities, or ECHO.

That grant, combined with funding from a variety of other sources, gets ECHO to the $7 million mark needed to start the project in the spring, ECHO Executive Director Peter Battles said. ECHO is a nonprofit housing development company that has been serving eastern Connecticut since 1989.

“We’ve been working on putting the funding together for this project for close to three years,” Battles said. “This jump-started the process.”

The first phase will include the demolition of two vacant, boarded-up homes at the 433 and 443 Bayonet St. site and construction of the first of two buildings. The building will contain 29 units and community space. Battles said ECHO is in the process of securing funds for the second phase.

The first phase includes six supportive units for individuals with developmental disabilities. Many units will be reserved for low-income tenants, those earning below the area household median income, or AMI, which is $91,400. Nine of the units are reserved for those at 25% of the AMI, 10 units for those at 50% of AMI and three units for those at 60% AMI. There will be six market-rate units.

While there are plenty of market-rate multifamily developments being built in the city, Battles said this development is aimed at a population on a limited income and in need of more affordable options.

ECHO has a number of other ongoing projects, including a partnership with the city on a project known as the Hempstead District Homeowners Program. The program was initially pitched as a continuation of the City Flats initiative started by the owner of Harbour Towers that focused on the rehabilitation and conversion of homes surrounding Harbour Towers into condominiums.

Battles said the new program, using $1.3 million from the state Department of Housing, will instead convert up to 10 dilapidated properties into owner-occupied, two-family homes, providing first-time home buyers with built-in rental income. The Harbour Towers owner sold the first four homes that were to be converted before the projects took off, however, and Battles said ECHO is looking elsewhere in the city for homes to purchase and rehabilitate. The city is providing lead abatement financial aid and general rehabilitation funding from its housing conservation fund for the program.

ECHO is nearing the completion of its Home New London program, in which it used state funds to purchase and rehabilitate 22 single-family homes throughout the city. The homes are made affordable since ECHO offers a second forgivable mortgage covering 20% of the purchase price. The program is helping to boost home ownership in a city dominated by rental properties.

In testimony to the state legislature in 2019, ECHO Vice President Julie Savin said the project would provide an estimated $1.6 million in local income reinvestment, $225,920 in taxes and other revenue and 34 local jobs. City records show ECHO is a taxpayer on numerous properties in the city, including the two properties where the apartment complex will be located.

ECHO additionally owns and operates a rental portfolio in Norwich, with 155 units in various locations.

g.smith@theday.com