Council awards $380,615 in CET funds to Newberg Area Habitat; remainder conditionally earmarked for Spark Newberg

The Newberg City Council voted to award $380,615 from the Construction Excise Tax (CET) fund to Newberg Area Habitat for Humanity and approved holding the remaining CET balance for Spark Newberg, subject to legal review and verification of nonprofit status.

Leanne, the staff presenter, told the council the CET revenue collection had expired in July 2023 and that after refunds and a 4% administrative deduction the fund balance for award this cycle was reported at $1,434,287.92 before corrections; staff later clarified a remaining total of $742,934.52 for allocation after administrative deductions and refunds. Staff presented three applications: Newberg Area Habitat for Humanity (1201 East Fifth Street duplex), Catholic Charities of Oregon (later withdrawn), and Spark Newberg (a two‑phase, 20-unit program).

Habitat’s executive director, Shannon, outlined the 1201 East Fifth Street duplex proposal: two stacked-unit homes, walkable to downtown, one unit ADA-accessible and one dedicated to a veteran household. She described Habitat’s homebuyer selection process, volunteer-built construction model, 0% interest, 30-year mortgage structure and “sweat equity” requirements for families.

Representatives of Spark Newberg, including Doug Kane of Providence Newberg Health Foundation, presented a program to buy land and build up to 20 units in two phases and to operate a 48-month financial coaching and accountability program for participating households. Spark asked the council for $1 million toward land acquisition and early development costs. Staff and commissioners raised feasibility questions during review: whether property had been identified and acquired, whether project costs were secured, and whether program details demonstrated that CET funds were the “most appropriate” source for the project’s gap financing.

At deliberation, councilors discussed the Affordable Housing Commission’s scoring and the CET NOFA criteria. Staff reported the commission recommended full funding for Habitat, did not recommend funding Spark (finding Spark failed several minimum threshold criteria), and suggested a third NOFA later to use remaining CET funds. The city attorney advised council that staff had not completed a legal analysis of whether Spark’s proposed usage would meet the statutory requirements for CET expenditures and that such a review would be prudent before disbursing funds.

After debate, Councilor Bridal moved to award $380,615 to Newberg Area Habitat for Humanity and to allocate the remaining CET funds to Spark Newberg with two contingencies: Spark must have federal nonprofit (501(c)(3)) status in place and the city attorney must confirm the project meets CET legal requirements. Council voted: McBride (yes), Wheatley (yes), Yarnell Holloman (yes), Kilberg (no), Mayor Rosacker (abstain), Torgesen (yes). The motion passed.

Staff recorded the council direction to execute resolution 2025-3977 to award Habitat the specified CET amount and to proceed with legal review and verification of Spark’s nonprofit status before releasing any remaining funds.