West Lebanon — The City Council voted on Wednesday night to rezone two parcels in downtown West Lebanon, allowing Twin Pines Housing Trust to move forward with plans for a new apartment complex.

The unanimous vote rezones portions of 70 Main St. and 16 Tracy St. from residential to commercial building zones. Along with 12 Tracy St., the properties are slated to become home to a three-story apartment building with parking for tenants.

“The idea is that this would enable us to move the proposed building that many of you saw last year from a location right there on Main Street to a location on Tracy Street,” said Andrew Winter, executive director of Twin Pines, which has almost 400 affordable housing units throughout the valley.

Winter was referring to a project approved by the Lebanon Planning Board in August that called for a four-story, nearly 39,200-square-foot apartment building on what is now the parking lot for Mascoma Savings Bank at 60 Main St.

Twin Pines officials said the old project would have resulted in 31 new residential housing units, office space for a nonprofit and a community room. Parking for both the bank and tenants would have been located on the two Tracy Street lots.

However, those plans failed to garner the grant funding needed. Twin Pines obtained $1.5 million from the Federal Home Loan Bank of Boston, officials said in May, but the group wasn’t able to obtain enough tax credits from the state of New Hampshire.

Once they learned the tax credits wouldn’t be coming, Twin Pines officials also pulled an application for $500,000 in federal grants, Winter said in May.

New plans for the complex are expected to save money, Winter said on Wednesday. By doing away with plans for the first-floor office and community room, Twin Pines expects to reduce the square footage by 30 percent and save roughly $1 million.

Under plans presented to the council, Twin Pines would demolish the two single-family homes on Tracy Street and construct a new apartment building in their place.

Both parcels were purchased in December from real estate agent Patrick Flanagan for $220,000. The parcels currently are assessed at $312,700, according to city records.

The 70 Main St. property, which is owned by Mascoma Savings Bank, would be expanded to serve as parking.

“In doing this, the project allows us to add some dedicated parking for the proposed building and also allows us to address some of the concern that we heard from folks around the original plan,” Winter said.

Some neighbors went before the Planning Board in August to oppose Twin Pines’ initial plan, saying the building was too large for West Lebanon and didn’t provide enough parking. No one from the public spoke for or against the new project on Wednesday.

Councilors said the rezone fits in with the city’s Master Plan and efforts to update zoning throughout Lebanon.

Currently, the commercial building district ends 250 feet from the center line on Main Street, regardless of where the property boundary ends.

In a memo to the council, Lebanon Zoning Administrator Tim Corwin said zoning today discourages “split-zoned” properties, where a single parcel ends up in multiple zones. He said rezoning on Tracy Street would be in line with recent efforts in Lebanon to match districts along property boundaries.

Councilors Clifton Below and Erling Heistad agreed, pointing out that the Kilton Public Library also is split-zoned, with its back parking lot in a residential district.

The project now goes before the Planning Board, which will perform a site review in August or September. If all goes well, construction could begin in fall 2018 and tenants moving in next summer.

Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223.