91ÊÓƵ

A developer who wants to build $7.6 million worth of low-income housing in Island City is running into opposition from officials who are worried that the project might result in lower income for the city itself.

Earlier this month, the Island City Council gave Guardian Real Estate Services in Portland permission to begin planning the 38-unit complex, but now some Council members are expressing concerns.

Island City Mayor Dale De Long said he is concerned that the project would be managed by the tax-exempt, nonprofit Northeast Oregon Housing Authority and would not contribute anything in local property taxes, according to minutes from an Aug. 12 city council meeting.

But Dale Inslee, executive director of the housing authority, said during the meeting that the project would contribute to the city through payments in lieu of taxes.

Under Oregon law, nonprofits eligible for a tax exemption pay their county treasurer an annual amount equal to 10 percent of the rent payments collected. Inslee said other amounts can also be negotiated.

De Long and councilors have also expressed concern that the property might become an eyesore. Inslee countered that the property would be regularly inspected by five federal and state agencies.

Island City is a town of 900 people adjacent to La Grande, where the income per capita is $21,000 – almost half the amount in Oregon as a whole.

“There is a great need in this area for affordable, safe, sanitary housing for families,” said Inslee.

Daniel Steffey, senior vice president for Guardian Real Estate Services, said in an interview with the 91ÊÓƵ earlier this month that the complex was originally priced at $8.2 million.

“We’ve downsized a bit to $7.6 million to fit within the city’s requirements,” he said.

If all goes well, he said, ground should be broken next spring, with the complex opening to residents in fall 2014.

The project does not need the Council’s approval if local development codes are met. However, during the August meeting, De Long said he hopes the Council’s blessing is important to developers.