The first apartment building in the dense, large-scale Timber Yards development, which will be called Everpine, received a nearly $8.4 million, 10-year property tax break from the Bend City Council on Wednesday.

The tax break is for a six-story, 246-unit apartment complex with ground floor retail and restaurant space and a public plaza, all located in what is set to become Bend’s densest development to date.

In a 6-1 vote, councilors approved the tax break, which was made possible through the city’s multi-unit property tax exemption program.

The program was put on pause in February after public outcry over a roughly $10 million tax break for an in-progress development. But Timber Yard developer Kennedy Wilson, a Beverly Hills-based global real estate investment firm, submitted an application through the city’s program before the pause.

Kennedy Wilson purchased the property in 2021 in a $40 million sale, according to Deschutes County property records. The Day family, who also owns the local construction company Hooker Creek, are still part owners of the property.

“The development — the assets that will eventually be built here — are long term assets. We’re going to hold them. We’re not merchant developers. We don’t build and flip, essentially,” Keith Herren with Kennedy Wilson, said at Wednesday’s City Council meeting.

The tax exemption program offers 10-year tax breaks for housing developments that wouldn’t normally be built. Properties also must be located in certain areas of the city and must offer added public benefits. The program was created in 2022, as allowed by statewide legislation, but the city tailored it to fit Bend’s needs.

The multi-unit property tax exemption program will be reevaluated at a public meeting in May.

In the case of Everpine, it’s located in Bend’s Core Area, an urban renewal district. Developers promised the public benefits of a public plaza, which qualifies as 10% of the lot dedicated to open space, added landscaping with native and pollinator-friendly plants and a parking structure mostly hidden from street view within the building.

A third-party financial analysis found the project isn’t financially feasible without the property tax exemption. With the exemption, the developer’s return on investment jumped from 5.3% to about 6%, which Allison Platt, the city’s core area project manager, classified as still pretty low.

The $8.37 million break is not money that’s taken from any of the area’s taxing districts or urban renewal agency’s existing revenue streams, Platt said at the meeting.

“These are revenues that are only generated if this project were to move forward,” she said. “It’s essentially the project helping pay for itself.”

Everpine, where rent for a one bedroom is estimated at around $2,100, is the first of many phases of development for the 21-acre Timber Yards development over the next 10 years.

Councilors were mostly supportive. Many cited new housing, regardless of its level of affordability, as a positive solution to the local housing crisis, especially since it doesn’t displace existing residents. Councilor Mike Riley voted against, saying Everpine doesn’t address the acute housing needs of Bend.