A segment of Kittery’s shopping outlets is about to be razed to make way for a new development project that will include a five-story apartment building, hotel and restaurant.

The project, which received final approval from the Kittery Planning Board last week, will occupy the space next door to the Kittery Trading Post. Three existing outlet buildings are expected to be torn down.

A proposal for the project from Portsmouth, New Hampshire-based Two International Group indicates the development will include a five-story building containing 107 units. Of those, 96 will be market rate.

Jason Garnham, Kittery’s director of planning and development, said areas in and around the outlet malls, particularly the relatively empty areas along Route 1 north of the malls and south of the York town line, have been identified as growth areas. 

“It does have the infrastructure to support growth and some of the growth we know the town needs to accommodate,” he said.

Statewide, Maine has been described as having a deficit of available housing. Garnham said the town’s current comprehensive plan doesn’t encourage development of housing as much as those in other communities, but Kittery’s plan was last updated about 10 years ago. Housing needs, he said, were not as dire.

“At that time, it hadn’t necessarily reached a crisis level,” he said.

The project is not just about housing. It also includes a 119-room hotel and a 6,000-square-foot commercial space. The space will be designed for a restaurant, but the proposal indicates no tenant is lined up to move in yet. 

The project will occupy property that was home to what were once called the Tanger Outlets, toward the southern end of a strip of outlet malls that have been a well-known destination for discount name-brand outlet shopping throughout New England for decades. 

When asked if the redevelopment project was a sign of things to come in other outlet mall spaces, Holly Roberts, Executive Director of the York Region Chamber of Commerce, said “To my knowledge, the proposed project replacing the stores in this one particular parcel is a one-time thing.”

Garnham also said he was not aware of plans for other parcels. They are privately owned, he said, and it would be up to the owners there to approach the town regarding future projects.

But, he added, “Our door is open to talking about what fits.”