MANCHESTER-BY-THE-SEA, MA-A housing project with a commercial component and affordable-housing units is being planned for this town’s downtown area. While town officials are supportive of the project– which is being developed with public and private funds– some local residents have concerns.

The Manchester Housing Authority plans to redevelop a block that contains one of the largest undeveloped parcels in downtown Manchester. The plan involves constructing affordable and market-rate housing, and commercial space. The housing authority contracted with the newly formed Manchester Affordable Housing Corp., a private nonprofit, to renovate and manage the apartment building, called Harbor Hill, and to construct 24 condominiums, five of which would be sold to first-time homebuyers.

Four small businesses currently in a commercial block would be replaced with six commercial condominiums, to be sold at market rate, and would help pay for the affordable housing component. According to Joanne Graves, executive director of the Manchester Housing Authority, there will be 80 units of senior housing and four units of affordable housing.

The project required an override on the ballot that was approved by the town last year. Still, local residents whose property abuts the site have become increasingly concerned at the height and density of the project. But Graves tells that those concerns are being taken into consideration. “We are going to have a new meeting for the abutters at the end of this month,” she says. “There is no final plan yet. We are still very much in discussion.”

Graves acknowledges that concerns over density, height, the amount of paved surfaces and the setback from the street are legitimate and they are being addressed by architects and engineers. The housing authority is scheduled to buy the 2.2-acre site for $2.75 million from Harbor Hill Inc., a private real estate trust controlled by Robert McIntosh of Manchester and Edward Diehl of Cambridge. “This is an opportunity to do a unique and creative development,” notes Graves, who says that the funding for the $12-million development is coming from assorted entities, including the town, the state and private sources. “It should never be portrayed as them versus us. It’s all us. We will come to a consensus on these issues. It’s a wonderful partnership that could serve as a model for other small towns.”

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