Two five-story apartment buildings, called the Platform, are expected to be built off of Franklin Avenue on land that once was home to Les Schwab Tire Center’s flagship store.

Much of the remnants of the tire center will be demolished, but the former tire shop will remain and become commercial space, said Caroline Baggott, a development manager for Project PDX, during Wednesday’s City Council meeting.

Despite the ambitious plans to transform the 3.5-acre property into 199 housing units, the development was deemed financially unviable earlier this year, city-contracted financial analysts said.

“Since then, as everyone’s aware, interest rates have only continued to go up making it even more challenging to kind of start projects like this right now,” Baggott said.

To make it viable, Bend’s city councilors approved a 10-year tax exemption for only the residential portion of the project Wednesday as a part of the city’s multi-unit property tax exemption program, which aims to incentivize multi-family housing development in certain parts of the city.

“I know our role here tonight is not to say, ‘We like what you’re doing here,’” City Councilor Megan Perkins said at Wednesday’s meeting. “But it’s amazing. It’s just transformational.”

Platform is owned by New Zone Bend LLC and being developed by Project PDX, both Portland-based companies. Project PDX orchestrated the Grove in NorthWest Crossing. The Grove’s Market Hall, which features numerous restaurants and shops within a single food hall, is a kind of precedent for the commercial part of the Platform project, Baggott said.

The company’s vision includes three buildings: one with a mix of 100 apartments and retail space, one with 99 apartments and one that is strictly commercial space. The residential buildings are valued at almost $44 million, according to the city.

Over the 10-year tax break period, the project will still pay roughly $1.2 million in property taxes, per the city’s estimates.

The city’s tax exemption program, which was created in August 2022, requires developments to meet certain requirements in order to qualify for the tax break.

Normally other taxing jurisdictions, including Deschutes County, the Bend-La Pine School District and the Bend Park & Recreation District, would receive tax revenue from a project like the Platform, but the city’s tax exemption program means they won’t collect as much. In order for the Platform to receive it’s $4.4 million tax break, those other agencies had to approve it, too.

Platform has promised to fulfill those requirements by making the two residential buildings energy efficient, installing electric vehicle charging infrastructure on 50% of parking spots and plant native landscaping and pollinator-friendly plants.

The project is located in the Bend Central District and the Core Area.

The central district is the 196-acre area on the east side of U.S. Highway 97 that’s been the subject of land use changes and investments to transform it into a bustling and accessible neighborhood. The Core Area is an urban renewal district that includes the Bend Central District and more.

Because the Platform project exists inside the Core Area, the city estimates it will ultimately contribute around $11.1 million in tax-increment financing revenue at the end of the 30-year lifetime of the urban renewal district. That money is then reinvested into the area.

The city also has plans to make road, bike and pedestrian improvements to Franklin Avenue, which runs right along the Platform, in 2024 and 2025. Design is currently underway.