City approves extended timeline for HopeSource Pathways Place; project expands motel conversion into 78 affordable units

The Ellensburg City Council authorized the city manager to sign a second amendment to the Pathways Place affordable housing agreement with nonprofit HopeSource on Tuesday, extending the project completion timeline and permitting a revised development that increases units on the Knights Inn site.

The amendment changes the target completion date to the end of 2026, with an outside completion date of June 2027, to allow HopeSource to combine the motel renovation with concurrent new construction on the broader 4.9-acre parcel at 1200 South Ruby Street.

City staff and HopeSource said the revision comes after the developer secured a full “funding stack” enabling a faster and larger build than originally proposed. HopeSource’s presentation to the council said the revised plan converts the motel portion into 32 studio units (up from 16) and adds new construction of approximately 46 additional units for a combined total of 78 apartments. HopeSource said 39 units would be targeted at households earning 30% of area median income (AMI) and 39 units at 50% AMI; the presentation noted the county’s AMI is roughly $99,800.

Bill Hinkle, HopeSource’s affordable housing director, said the project is now “fully funded” with a budget presented to council of roughly $25 million and a mix of state, federal and private sources. John Raymond, president of HopeSource, told the council a development partner brought the financing expertise to assemble the awards that allowed the project to expand.

Why it mattered: Council had originally contracted with HopeSource for the motel conversion and required at least 16 units in the Knights Inn building. The new agreement does not reduce that baseline; HopeSource explained the new design increases the number of affordable homes and speeds delivery by combining renovation with new construction using layered funding and a development partner.

Council debate touched on program oversight and timing. Several councilmembers asked how the revision would affect prior city funding and whether the Affordable Housing Commission had reviewed the amendment. HopeSource and staff said the project had been coordinated with city staff and state funders; staff told council they had notified the Affordable Housing Commission and planned to bring the amendment to that commission for review on its upcoming schedule. One public commenter said HopeSource had been slow to deliver earlier milestones and urged the city to enforce the original timetable.

A motion to table the authorization until the council’s March 17 meeting (to allow formal Affordable Housing Commission review) failed. The council then voted to authorize the city manager to sign the agreement amendment. The motion passed on a roll call after discussion; one council member recorded an abstention on the final motion to authorize.

Project specifics HopeSource presented to council (as stated in the hearing): - Total proposed units: 78 (32 studio units in converted motel; 46 in new construction). - Income targeting: 39 units at 30% AMI; 39 units at 50% AMI; some units reserved for veterans and for permanent supportive housing. - Rents presented (example figures from HopeSource slides): studios at 30% AMI roughly $459/month, 1-bed $486/month, 2-bed $584/month; at 50% AMI higher levels presented on the project slides. - Proposed funding and partners: a multi-source funding stack (state housing trust funds, tax-credit financing, local contributions including city and county support) totaling about $25 million as presented.

Ending: City staff will record the signed amendment and continue coordinating permitting and oversight with HopeSource. The Affordable Housing Commission will receive project documentation at its next available meeting and the city will monitor the project’s timeline and compliance with the revised agreement.