Salem approves $749,999 grant for 6-story downtown apartment building
Salem's Urban Renewal Agency Board unanimously voted Monday to approve a $749,999 grant for a six-story 98-unit, mixed-used apartment building in downtown Salem.
Details released about the board's meeting on Monday, which immediately precedes the regular Salem City Council meeting, gave new insight into the plans for the struggling section of downtown.
Deacon Development, LLC, is set to close next year on the parking lot at 277 High St. NE. They plan to demolish the parking lot and build a mixed-use building with 98 apartments and a ground-floor commercial space with seven live/work units.
The design of the building will include a lobby, community deck, fitness room, resident community room and on-site bike washing, storage and repair station. Developers said it will be designed to encourage people to use public and alternative transportation.
The mix of units will consist of studios and one- and two-bedroom units. The project is expected to cost $27 million.
According to city reports, 15% of the units will be set at affordable housing rates.
Ian Lewallen, with Deacon Development, said during the meeting that the developers wanted to include a mix of housing size, from 400-square-foot studios to 900-square-foot two bedrooms to attract a diverse range of tenants.
The affordable housing portion is also slated to be a mix of unit sizes.
"I am excited about this project," councilor Virginia Stapleton said.
Mayor Chris Hoy concurred.
"I think it's to be a great addition to our downtown," Hoy said, adding that it met one of the council's goals to increase the availability of housing in the city core.
The name Deacon Development is familiar downtown. The company developed the Rivenwood Apartments at the former Nordstrom site, which is set to be completed in spring.
In a report to the board, city staff said Deacon Development will be required to provide funding commitments from lenders or investors to cover the costs not covered by the grant as a condition of grant disbursement.
In a letter to the board, representatives with Deacon said the grant funding was needed to offset the steep increases in construction costs and new Oregon energy efficiency requirements.
City staff noted the project had the potential to re-energize the highly visible corner in downtown Salem. The area near Liberty Street and High Street has lagged behind in revitalization compared to other parts of downtown.
Until demolition in 1972, the parking lot was the original location of the old Salem City Hall.
The location then became the parking lot and drive-thru for the former First National Bank Building, which was demolished in 2016. It's been used as a paid, public parking lot ever since. It neighbors "the pit," a fenced hole in the ground made after the demolition of the bank.
The $749,999 Urban Renewal Agency Board exceeds the typical maximum grant amount of $300,000. In a report to the board, city staff said the project met several requirements for allowing an exemption for that amount including adding housing to downtown, improving nearby Wexford Alley and being a new construction project.
The requirements also require at least a 4:1 leverage of private/public funds. This development would have a 36:1 leverage ratio.
Later in the meeting, councilor Vanessa Nordyke said the current parking lot was underutilizing that space downtown.
"We want our downtown to be vibrant, accessible and just a wonderful way to work and live," she said.
With new housing and businesses coming downtown, council is taking action to help bring more residents and businesses to downtown, Nordyke said.
"You can clearly see the difference," she said. "We are making exciting progress towards turning another vacant or underutilized piece of property into mixed-use and apartment living downtown and live-work living downtown."
For questions, comments and news tips, email reporter Whitney Woodworth at wmwoodworth@statesmanjournal.com, call 503-910-6616 or follow on Twitter at @wmwoodworth
This article originally appeared on Salem Statesman Journal: Salem approves grant for 6-story downtown apartment building
