North Bend staff present updated development-agreement plan for Mountain View townhomes along North Bend Way

North Bend City Council discussed a proposed development agreement for a mixed-use project on a 4.2-acre parcel along North Bend Way that would add commercial frontage on the street and townhome-style residential behind it. City staff and the applicant presented an updated concept that increases street-facing retail to about 9,530 square feet while reducing proposed townhome units from as many as 65 to 56 and asked council to place the agreement on the May 20, 2025 consent calendar for formal consideration.

The project matters because it sits inside a proposed tax-increment financing (TIF) area and would trigger frontage improvements and one-time impact fees city staff estimate at about $3.1 million. James Henderson, Community Economic Development staff, said the city would receive roughly $2.5 million of those one-time fees and the school district about $640,000; Henderson also estimated new annual property, utility and sales tax receipts at about $87,000 at full build-out.

Supporters say the plan aligns with North Bend priorities for more middle-income housing and complete-streets improvements. Phil O’Sullivan, the applicant, described the design that places retail along North Bend Way with residential behind it and said the team revised the concept after three Community Economic Development (CED) reviews and a Planning Commission recommendation for approval.

Several council members pushed back, urging stronger commitments to delivering commercial uses. Council member Tremolotta asked whether there is a performance clause requiring the commercial space to be leased; staff confirmed the draft development agreement does not require the applicant to lease or operate the commercial frontage. Council member Brandon and others urged a more holistic, long-range vision for western North Bend rather than “one-off” developer agreements, and council members asked staff to present longer-term revenue modeling showing ongoing general-fund impacts rather than one-time fees.

City staff described performance milestones in the draft agreement: a complete land-use and site-plan application within nine months, and a building permit within five years. The Planning Commission recommended approval on February 19; staff requested council direction to schedule the DA for the May 20, 2025 agenda. No formal action or vote was taken at the work study.

Council members and the applicant also discussed housing prices and product type. Staff stated an early estimate they had provided to the applicant of roughly $150,000–$180,000 per townhome, and the applicant said that estimate was too low and that final prices would be higher (the applicant’s precise starting-price figure in the transcript was unclear). The applicant described unit sizes in the conceptual plan ranging roughly from 1,000 to 1,800 square feet.

Questions from council also covered site context: the parcel abuts Smitty’s Towing and Mount Si Memorial Cemetery to the east and an existing residential area called the Meadows to the west; a mobile-home park sits nearby. Staff and the applicant said the revised street-front commercial was intended to attract small local retail users by keeping retail close to the frontage rather than stacked under housing deep on the site.

Next steps: staff asked council to authorize putting the development agreement on the May 20 agenda for formal action; council provided feedback on stronger commercial performance guarantees and long-term revenue analysis. No ordinance, motion, or council vote was taken during the work study.

For reference, the presentation and discussion were part of the council’s public work study and were followed by the next agenda item, a 60-minute presentation on police services contracting.