The city of Coos Bay has agreed to contribute up to $1.2 million for public portions of a development central to the city’s future housing plans.
City councilors Tuesday approved a request to split the development costs for the wastewater system at the proposed Timber Cove development after the developer said he could no longer make the costs of the project as planned pencil out.
The development off Ocean Boulevard and Lindy Lane has been in the works for years. Last summer, the planning commission approved plans for the project, then scheduled to include 400 or more manufactured homes up for sale for around $100,000 apiece.
But the cost of manufactured homes has skyrocketed since the project began, Public Works Director Jim Hossley told councilors Tuesday.
“Since the inception of the project, the development and construction costs have increased significantly — so much so that the owners of the project have determined that the project is no longer financially viable,” Hossley said.
The cost increases have forced Brad Woodruff, the owner of Red Moon Development which planned the original development and has several others planned in the city, to rethink the plans.
Instead of manufactured homes on development-owned property, Hossley said Woodruff is considering stick-built homes on individual lots. Woodruff told city staff that change could make the project financially viable for his company — but only if the city pitches in.
The new plan would see around 400 housing units built in phases, starting with up to 150 homes followed by 50-lot increments.
Under the original plan, the property’s wastewater pump station would have been privately owned by the property owner. But under state law, stricter environmental laws kick in for multiple-lot subdivisons, meaning the developer will have to redesign the infrastructure.
The cost of the public portion of the infrastructure would run about $2.4 million, according to Hossley, and Woodruff asked the city to share half that cost.
That cost would move in phases, too, with the city initially spending $200,000 on a design for the system, and the system’s construction costs being split with the developer when construction begins.
City Councilors agreed they didn’t have much choice but to go forward with the project, committing money from the city’s wastewater improvement fund.
“I think most of it would grind to a halt if we weren’t willing to participate,” Craddock told the council, noting the developer is working on a new land use application and completing some site preparation work.
Still, some councilors were cautious about committing dollars collected from other system uses to the project.
“Where’s the guarantee to the rate payers of this city if this guy walks away, and we’ve spent a half a million dollars on design and the beginning phases of construction,” Councilor Phil Marler asked Craddock.
A key difference between this and previous projects is that the city had a lower demand for housing during those previous projects than it does now, Craddock said.
He pointed to a 2017 study which found the county will need 1,100 new housing units in the next 20 years, and another last year which found the city will need around 600 of those in the same timeframe.
“The city’s leading the charge on building homes, and so those people that needed it out in the county will be coming into the community,” Craddock said.
What’s more, the area will need the wastewater infrastructure if it’s ever going to be developed, Craddock said, and the new homes will also bring sewer rates and property taxes into city coffers.
Marler said he’d support the plan because of the need for housing in the region, but asked city staff to ensure a safeguard in the agreement with the developer would return spent city funds if the developer didn’t follow through on the plans to build.
“I will trust you to come up with something to protect the city, because I really worry about the fallout from this if we invest $1.2 million and then (Woodruff) walks away,” Marler said.
Others on the council agreed with the addition of a safeguard clause in the cost-sharing agreement, and expressed the importance of supporting the project.
“The way I look at this is that is buildable lands that’s a pretty desirable spot to build some homes on, and if we get the infrastructure there even if Mr. Woodruff didn’t do the development, maybe it would be attractive to someone else,” Councilor Carmen Matthews said.
In the end, Councilor Stephanie Kilmer moved and Matthews seconded to allow the city to enter the $1.2 million cost-sharing agreement. Councilors unanimously approved the plan, with Lucinda DiNovo absent.