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A middle-income multifamily development that鈥檚 being supported by Prosper Portland is moving forward in the Gateway area.

The agency鈥檚 board on Wednesday approved the purchase of a 5.2-acre property along the west side of Northeast 102nd Avenue near the intersection with Pacific Street for $10.6 million. The term sheet includes an option for Cody Development Corp. to buy the property within five years, subject to certain conditions.

Cody Development intends to develop 216 units of middle-income housing on the property, according to Prosper Portland.

Prosper Portland plans to purchase the property using funds from the Gateway Regional Center Tax Increment Finance District.

鈥淭his is a key property for following through with the development vision that is part of longstanding community plans as well as the TIF district plans,鈥� said Brian Moore, development manager for Prosper Portland, in an interview.

The transaction allows the property owner, an entity that includes Portland developer Tom Cody and financier National Real Estate Advisors, to write off a modest loss while the project is financially restructured, according to public testimony and Prosper Portland documents.

Cody鈥檚 development team purchased the property in 2023 for $11.07 million.

Prosper Portland鈥檚 move to buy the property will help get the project off the ground, Cody told the agency鈥檚 board on Wednesday.

鈥淯pping the ante, if you will, to I hope temporarily take ownership of the property is a huge help in seeing us through to the end of the project with the desired outcome of delivering a transformative project on this site at scale,鈥� he said.

The project team may use a modular construction method that鈥檚 now being used for the first time for an 87-unit multifamily development in Bend, Cody said.

Cody is president and CEO of Project^, a development firm that is responsible for The Nature Conservancy鈥檚 renovated headquarters and Meyer Memorial Trust‘s new headquarters, Field Office and The Emery, among other projects. Cody did not respond to messages seeking comment.

Board members raised several questions about what would happen if the development does not go forward. Cody said if his team does not deliver the project, the agency could seek a new developer. The property comprises multiple tax lots and is divisible, Cody said.

Prosper Portland officials said one option is the agency could continue to own the property and arrange a ground lease with the developer.

The Gateway deal would also allow Prosper Portland to satisfy a $3 million infrastructure funding commitment to David Douglas School District, which owns a neighboring property.

As part of an intergovernmental agreement with the Portland Bureau of Transportation, Prosper Portland plans to build sidewalk improvements along Northeast Pacific Street from 99th Avenue to 102nd Avenue, while PBOT moves forward with an extension of Northeast 100th Avenue.

The Gateway apartments are intended to serve residents who earn 80 percent to 120 percent of the area median income.

鈥淲e have a goal, and it is to create housing for all income levels, not just affordable,鈥� said Frieda Christopher, who serves on the East Portland Action Plan housing subcommittee and is a former David Douglas school board member. 鈥淲e really believe you need a mix of incomes to make an area thriving.鈥�

The property is within a quarter mile of retailers Fred Meyer, WinCo Foods and Kohl鈥檚, and is also close to the Gateway MAX light-rail station and interstates 84 and 205.

The area has historically struggled to attract investment; it needs some help, Christopher told Prosper Portland鈥檚 board.

鈥淭hat area has slowly become more blighted instead of improved,鈥� she said. 鈥淭his project would definitely help activate the area. It is sorely needed.鈥�