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Pendleton in negotiations for 200-unit apartment complex

City on pace to add more units in 2018 than 10-year high, set in 2017
Antonio Sierra

East Oregonian

Published on August 21, 2018 12:01AM

Last changed on August 21, 2018 11:22PM

A man works on one of the duplexes in the complex off of Southwest 30th Street on Tuesday in Pendleton.

Staff photo by E.J. Harris

A man works on one of the duplexes in the complex off of Southwest 30th Street on Tuesday in Pendleton.

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If the city and I & E Construction can hammer out an incentive package with the city quickly enough, Pendleton could have more than 200 additional housing units within the next two years.

That’s what Karl Ivanov, the president of the Clackamas-based I & E, asserted to the Pendleton City Council at a workshop Tuesday.

I & E is targeting a 10-acre property owned by the city on Westgate, where the old Eastern Oregon Training Center used to be. The proposed 204-unit complex would have five different configurations of apartments, ranging from studios to three-bedroom units.

Although Ivanov and the rest of the presenters in his group wouldn’t provide a firm range of rental prices, they said the average price of one of the units would be $1,200 per month.

Pendleton acquired the vacant property from the state in 2016, and City Manager Robb Corbett said this is the kind of project city officials had in mind for the land.

“This is exactly what we’ve been looking for,” he said Tuesday.

Ivanov said I & E specializes in working in small towns, establishing apartment complexes in communities toward the outskirts of the Portland metro area and other population hubs in the Willamette Valley for people looking to live more affordably.

According to a chart provided by I & E, the company has built similarly sized apartment complexes in Molalla, Silverton and Independence, and is planning or building apartments in Forest Grove, Sandy, Albany and St. Helens.

Corbett wants to spend the next few weeks negotiating details of an incentive package, but ideas that were mentioned briefly included a land donation or a property tax deferral.

While generally supportive of the project, a few councilors wanted additional language inserted into an incentive package that would protect the city’s investment.

Councilor Paul Chalmers suggested a series of benchmarks that I & E would need to meet, while Councilor Scott Fairley wanted a “clawback clause” that would allow the city to take the land back if the development went south.

Once I & E commits, Ivanov assured the council that his company would follow through on building the complex and establish a lasting presence by continuing to manage the facility once it’s finished.

“We’re going to be the city of Pendleton’s neighbor forever,” he said.

With council approval, Ivanov said I & E plans to build the apartments in a single phase over an 18-month period.

Due to a scheduling quirk, the council will be meeting back-to-back weeks on Aug. 28 and Sept. 4 and could potentially approve a deal with I & E during one of those meetings.

If I & E goes forward with the complex, it would add to a growing list of housing projects around Pendleton that are in various stages of development.

The 55 housing permits the city issued in 2017 represented a 10-year high, but Pendleton is on pace to surpass that number in 2018.

The city has issued 24 housing permits through July, a 41 percent increase from the same time last year. Most of the building activity was centered around single-family homes and townhouses at Sunridge Estates, an area where the city sold developer Dusty Pace several lots.

Pendleton’s housing scarcity has been documented multiple times by the city, most recently in a housing study that showed Pendleton’s market could support 125 more rental units and 90 for-sale units.

If added together, there are 463 housing units either permitted by the city or proposed at the city government level.

But the Pendleton City Council’s goal — 50 new dwellings per year — is measured in houses built rather than permits issued.

Some developers are still working on permits, while others are already deep in the construction process.

Portland developer Nate Brusselback received his permits back in December and is in the midst of building a 25-unit set of duplexes on Southwest 28th Drive near Juniper House.

Brusselback said construction is slightly behind schedule, but expects all the units to be done by the fall.

The two- and three-bedroom apartments will all be 1,262 square feet with one-car garages, according to Brusselback, and rent for $1,395 per month.

Brusselback said the duplexes have already received interest and he expects more demand to come once the units are complete.

Pendleton developer Al Plute has the smallest planned development, but he has the added benefit of receiving $340,928 in grants from the city toward his $1.3 million effort to convert the third floor of the Bowman Building on Frazer Avenue from offices to 18 apartment units.

Plute said he’s close to receiving his building permits and plumbers should be able to start their work on the building by the end of the month.

Although his engineer anticipates the Bowman won’t run into any obstacles during the construction process, Plute said the historic nature of the building means things could change. He’s hopeful that the apartments will be completed by May 2019.

“I’m not going to put pressure on myself,” he said. “I’m just going to go with the flow.”

Longview, Washington, developer Hal Palmer received permission from the Pendleton Planning Commission to proceed with a 116-home subdivision called Sunset View Estates near Harris Junior Academy in March, but there’s been no visible activity on the property since then. Palmer did not return a request for comment on Tuesday.

Newberg developer Saj Jivanjee has been looking to expand the 32-unit Pendleton Heights development on Tutuilla Road since 2016, but financing issues have plagued the project.

Jivanjee wants Pendleton to assume more financial responsibility to extend the road to the complex and restructure the debt he already owes the city.

After some councilors expressed frustration with his latest proposal in June, Corbett said the city is waiting for Jivanjee to present a new proposal.

“The ball’s in his court,” Corbett said.

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Contact Antonio Sierra at asierra@eastoregonian.com or 541-966-0836.



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