Adeal to build low-income housing in downtown Medford and off Spring Street almost got derailed last week, prompting the Jackson County Housing Authority to offer more money to get it back on track.
The City Council last week balked at spending $65,000 to cover a disparity in price between a downtown property owned by the Medford Urban Renewal Agency and a Spring Street property owned by the Housing Authority.
To avoid delays in reaching a compromise, the Housing Authority tentatively offered to cover the difference, contingent on approval by its board of directors.
"From our standpoint, this agreement, even with Housing Authority increasing its contribution, is a better alternative than going back to square one," said Jason Elzy, director of development for the Housing Authority. "This avoids the conflicts of a few months ago. We would rather not fight with the city and (not) fight with neighbors."
The Housing Authority had originally proposed a 100-unit, low-income development off Spring Street that generated opposition from the neighborhood.
The City Council rejected the project, but the Oregon Land Use Board of Appeals ruled the city made serious mistakes in denying the Housing Authority's application.
The Housing Authority threatened a discrimination lawsuit against the city, but ultimately a compromise and tentative agreement were reached.
To appease the residents and the city, the Housing Authority offered to reduce the apartment complex size to 50 units and transfer 2.5 acres of the 6-acre property to the city for a park and buffer between the complex and Spring Street. The Housing Authority would give $150,000 to the city for development costs for the transferred property.
In exchange, the city would swap a commercial-zoned lot at the corner of Sixth and Grape streets to the Housing Authority, which would build a 30,000-square-foot building that would house retail on the bottom floor and contain 50 units of low-income housing.
The sticking point came when the appraisals for the two properties indicated the Housing Authority's land was worth $129,000 more than the city property.
The Housing Authority offered to pay half the amount, or roughly $65,000, that would go toward improvements at Donahue-Frohnmayer Park next to the Spring Street project.
When the agreement came before the City Council last week, it was rejected by a 5-2 vote, with one abstention.
After the Housing Authority proposed paying the remaining difference as a contribution toward park improvements, the council supported the idea.
Councilor Daniel Bunn said he was concerned about issues of fairness toward the Housing Authority.
"They are bearing the brunt of us having an internal squabble," Bunn told other councilors Thursday. "To take it out on someone trying to build a project in the middle of a recession is unfair."
Bunn said he voted for the new agreement primarily because the Housing Authority endorsed the plan.
On the final vote, five councilors voted for the agreement, with councilors Karen Blair and John Michaels voting against and Chris Corcoran abstaining.
Because two councilors voted against the agreement, it will come back for a second reading at noon Feb. 21 at City Hall, 411 West Eighth St.
Councilor Bob Strosser said he thought the Housing Authority had made every effort to find a solution that would work with the City Council.
"It is very evident that the Housing Authority is constructively moving through these difficult waters with us," he said.
Reach reporter Damian Mann at 541-776-4476, or email firstname.lastname@example.org.