Wasco County commissioners direct staff to draft purchase-and-leaseback documents for Basalt Commons housing project

Wasco County commissioners on Sept. 3 gave consensus to direct staff to draft purchase-and-leaseback documents that would let the county buy the land for Basalt Commons, a proposed 116-unit apartment project in downtown The Dalles, and lease it back to the developers to close a financing gap.

The project team, led by developer Mary Hamlin and partner Ross Leinhardt, told commissioners the county purchase is required for the bank underwriting to proceed. Hamlin told the board, “we are requesting today that the county purchase the land, and we would lease it back from you.” Leinhardt said he has “already put $2,000,000 into this project and, committed up to 6,000,000 for the project.”

Why it matters: Basalt Commons’ proponents said the development would add housing supply in a market with very low vacancy rates, support downtown businesses and increase the tax base. City of The Dalles officials and the project team emphasized the project would be market-rate workforce housing aimed at teachers, nurses and other employees who cannot currently find local rentals. Matthew Kleeves, city manager, said “seeing this project move forward would have that tremendous benefit to that crisis as a whole, but in the efforts to revitalize the downtown.”

What commissioners discussed: Developers described the project financing and community benefits, and outlined options the county could use to reduce the developer’s borrowing gap. Hamlin and Leinhardt said the financing package also includes a city urban renewal cash contribution of $730,000 and an SDC (system development charge) waiver from the city. Hamlin said the project’s rents have been set “as low as we can get them” given current construction and interest costs and that the team has a term sheet from a lender.

The developers told the board the bank will take the loan package to a loan committee in about six weeks and that the county’s purchase commitment would need to be part of the package. Hamlin said the loan committee review is likely roughly six weeks away and that the development team would expect documented county commitments when they close with the lender. Commissioners discussed timing and asked staff to draft legally vetted documents (purchase, leaseback, and an option for a later buyback by the developers) so the package can go to the lender.

Risks and limits discussed: Hamlin repeatedly cautioned that housing development carries lender-driven conditions. She noted the construction loan would be 100% recourse and said the county’s ownership of the land would put the county in a stronger position if the bank needs to protect its investment. Commissioners asked about public benefit and affordability trade-offs; Hamlin and the city manager said the project is market-rate but targets workforce income levels and that higher-density downtown housing often increases overall housing mobility in a market. Hamlin said tax-credit or deeply subsidized models would materially change financing and underwriting, and the project team is not pursuing a tax-credit structure for this development.

Next steps: The board’s chair asked, “do we have consensus to direct staff to proceed as we've been talking about?” Commissioners voiced agreement. Staff and counsel will draft documents and return the package to the board for formal action at a future meeting; the team and county staff discussed aiming for draft documents for the Oct. 1–Oct. 17 meeting window so the developers can include the county commitment in their lender package.

Context and local detail: The developers estimate the building will provide 116 apartment units (a mix of studio, one- and two-bedroom units, including about eight two-bedroom units), on-site parking, and Ground Floor commercial space. The project team reported a parking analysis showing roughly 264 public and private spaces in the downtown area (about a 2.27 ratio they cited) and indicated the city is planning additional public parking and a parking-management strategy to mitigate street congestion. The city and urban renewal agency are also participants in design and incentive discussions.

What the board authorized today: Commissioners gave staff a consensus directive to prepare the purchase-and-leaseback and associated documents for a future formal approval, not a final approval of county expenditure. When the documents return to the board, commissioners will consider a formal motion and vote.

Why readers should care: Wasco County and the City of The Dalles are facing a constrained rental market and low vacancy. If built, Basalt Commons would add significant rental capacity near downtown jobs and services; the county land purchase would be an unusual but not unprecedented public role to unblock private financing for a large downtown project.

Where to get more: The project team and city officials said they will provide the board additional economic analyses, market studies and the draft documents when ready.