Starting work on a planned 100-unit complex at Pendleton Heights would ordinarily be good news for a development beset by delays and several rounds renegotiations over an incentives package with the city.
But the Newberg developer responsible for the project never paid the city $150,000 in debt repayment before starting construction, a violation of the latest deal made between Pendleton Heights and the city.
Construction workers and heavy equipment were visible from Southwest 11th Street on Thursday morning and City Manager Robb Corbett acknowledged that developer Saj Jivanjee hadn’t yet made the payment.
Corbett said he spoke with Jivanjee and the developer told him that the construction loan for the project has been delayed, but he still planned to make the payment in advance of working through those issues.
According to the city manager, Jivanjee said he plans to pay back the $150,000 by June 15.
While missing the new deadline could cause the city to reconsider its options, Corbett said the city will not take any action against Jivanjee for missing the payment and starting construction.
When asked whether Corbett was disappointed in Jivanjee, he expressed confidence in the developer’s reasoning.
“My feelings are that it sounds to me like there was some delays as the result of a number of things, and he’s explained them to me, and it seems plausible that sometimes these things take time and I believe that he’s genuine in his regret that it’s taken the time that it has and that he’s working on a solution,” he said.
Corbett added that he spoke with Jivanjee’s bank to confirm that the developer’s circumstances were true.
“I’m very comfortable with where we’re at right now,” he said.
Reached by phone, Jivanjee said he was busy and would not be able to comment until Tuesday.
The latest twist adds another wrinkle to Pendleton Heights’ convoluted development history.
The city originally partnered with Jivanjee in 2012, agreeing to donate the Tutuilla Road land to him and front the money for necessary infrastructure improvements.
But Jivanjee kept returning to city hall with plans that altered the concept and incentive deal behind the development, which was originally pitched as a 72-townhouse subdivision.
Jivanjee eventually built 32 townhouses, and in 2016, the city signed off when Jivanjee said he wanted to finish the project with 100 apartment units instead of 40 townhouses like he originally proposed.
In the ensuing years, Jivanjee would enter into several rounds of renegotiations with the city council to change the terms of his incentive deal, usually involving more money from the city for infrastructure or moving around the debt owed to the city to make it more palatable to the project’s private financiers.
The council initially approved Jivanjee’s proposals, but seemed to grow warier with each successive pitch.
In September, the council unanimously voted down a new debt repayment plan for Pendleton Heights and didn’t even consider a last-minute amendment offered by Jivanjee.
The two sides eventually came to a compromise in February, with the city agreeing to take on more of the infrastructure costs and Jivanjee committing to pay $150,000 to the city before starting the project, which was reduced from the $200,000 set in a prior deal.
Pendleton Heights has played an important symbolic role in the city’s campaign for more housing.
City officials have said that the subdivision was meant as a signal to housing developers that there was a demand for new homes in the city, and city leaders have highlighted the issue by staging tours at Pendleton Heights with Gov. Kate Brown and former First Lady Cylvia Hayes.