MADRAS — Locals scornfully referred to the dirt mound at the corner of Fourth and D streets as “The Hump” before construction crews last winter leveled the ground and the dilapidated buildings atop it.

But a project that starts Aug. 1 will evoke admiration, even shock, from locals and visitors who pass through town along U.S. Highway 97, its developers say.

Once completed, the three-story Harriman Building will be about the same height (45 feet) as the former Hump property and buildings, but it will have a completely different look, said Rick Allen, a managing partner with the Brickhouse Group LLC and former mayor of Madras.

The steel and granite building will be something akin to what’s more commonly seen in Portland and Bend, Allen said.

“There haven’t been buildings like this in small towns in a long while,” Allen said. “But it’s going to be timeless. It’s going to be there 100 years from now.”

The $3.5 million project will be completed by June, Allen said.

The building will likely house restaurants on the ground floor and professional offices on the second and third floors, Allen said.

Lease rates will range from $1.25 to $1.50 per square foot, but they could be lower for the restaurant space, he said.

Two Brickhouse partners — Dr. Tom Sheldon, a Redmond optometrist, and Marc Andreason, owner of property management firm Willow Canyon Properties, of Madras — have agreed to sign leases in the building, Allen said.

A third party, an unnamed national telecommunications firm, is looking to rent space on the top floor, he said.

The Brickhouse Group bought the 21,000-square-foot property from the city’s urban development arm, the Madras Redevelopment Commission, for $315,000 last month.

Using money from the city’s $14 million urban renewal development fund, the Redevelopment Commission purchased the property, removed the blighted buildings and leveled the site, said City Manager Mike Morgan.

“Because they’re a local group, they’re able to understand the market better and take a longer view of the market,” Morgan said. “It’s still an immature market, but there’s so much margin for upside.”

The purchase agreement required the buyers to start construction almost immediately, contribute $21,000 toward a master plan of the entire 75,000-square-foot, city-owned property and provide extra public parking, Allen said.

“Financially, it’s a tough project,” he said. “It took a strong local group of investors to commit long term to it because the market isn’t mature yet.”

The group is comprised of several local partners, including managing partners Allen, Harold and Nancy Siegenhagan, and Bill and Sylvia Miller.

Out-of-town partners include Sheldon, Jim Jones, of Portland; Brian Neukirch, of Little Rock, Ark.; and Steve Watson, of Portland.

Other partners Andreason, Tom and Stacy Norton, and Jason and Sara Hertel, all reside in Madras, according to the Brickhouse Group.

The local ties involved with the project helped shore up funding and ensured the building would be built for the long term, one of its partners said.

“We wanted to invest in it because we knew it would be a quality structure,” said Stacy Norton. “We also anticipated the growth in this area. There’s a need for professional services and restaurant space in this city.”

City leaders project the city’s current population of 6,070 will grow significantly within the next 10 to 15 years, due largely to major projects under way in the city.

A new minimum- and medium-security prison under construction east of the city, the Deer Ridge Correctional Institution, will bring between 400 and 500 jobs throughout next year, adding to the city’s customer base.

Yarrow, a master-planned community that will add approximately 1,900 new homesites over the next 10 to 15 years within the eastern city limits, is expected to create further demand for downtown shopping options.

The Harriman Building will be located within a block of the planned Civic Center area that will include the new Madras City Hall and Police Station, and the Madras-Jefferson County Chamber of Commerce.

There will be a pedestrian-friendly walkway linking the three developments, Allen said.