The city of Sisters and Housing Works are close to a final agreement that will help fund an affordable housing development to be built this year, though finalizing the legal documents could potentially delay the start of construction.

“The building permits are about to be issued, so that’s a pretty big milestone to get the permits in hand,” said Patrick Davenport, community development director for Sisters. “Everyone wants to get it built and occupied before winter comes back around, but it’s a lot of money for a smaller city like Sisters.”

The city approved a $300,000 grant in September 2016 for the construction of the development called Village Meadows. The 48-unit development will be a mix of one, two and three-bedroom apartments and will be available for residents who make 60 percent or less of the average median income.

“Without that grant, we wouldn’t be doing this,” said Tom Kemper, executive director for Housing Works, which provides affordable housing and rental assistance for low- and moderate-income residents of Central Oregon. “We have been working on this for a long time and will be in a position to close this transaction (this month).”

With construction deadlines looming, however, Kemper voiced concern at Wednesday’s council meeting that the agreement is becoming too complex.

The multiple layers of third-party lawyers and financial clauses make the process extremely complicated, he said, and additional negotiations over financial protections would only further complicate the matter.

The council, however, pushed for a trust deed and promissory note that guarantees the development will be built and protects their $300,000 investment. “This was a lot of money for us. It’s a big project; we’re not going to come after you willy-nilly like that,” Mayor Chuck Ryan said at Wednesday’s council meeting.

“We want to be protected.”

Ryan and the council unanimously approved a compromise, of sorts. It includes a trust deed in the agreement that ensures the development will be built and a separate declaration to ensure that Village Meadows continues to be offered at affordable rates after construction is completed and even in the event of a sale of the property.

“I totally understand — if they have skin in the game — they want some assurances in the deed restrictions that we are going to do what we proposed,” said Keith Wooden, real estate director for Housing Works. “They are helping the deal go by adding the resources we needed, so if that’s what we need to do, we can do it. We are excited to get started soon.”

With the permits approved, R&H Construction Co. could break ground on the project in the next few weeks and wrap up around January 2019. EPIC Property Management will start to lease the units about three months before the move-in date, Wooden said.

“As soon as everyone agrees on the documents, we can get (construction crews) out there to start moving dirt,” he said. “We are right at the very end of all the planning and permitting and financing stuff. We can almost smell the finish line.”

— Reporter: 541-617-7829, acolosky@bendbulletin.com