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Council to require pilot payment before certificate of occupancy for Bangor School housing project, staff told
Summary
City staff told the council the North Bend Housing Authority's Bangor School redevelopment will not pay a pilot now; councilors signaled they want a payment‑in‑lieu agreement before occupancy to cover city services.
City Administrator David and staff briefed the North Bend City Council on Feb. 10 about negotiations with the North Bend Housing Authority over a planned workforce housing redevelopment at the former Bangor School site.
David told the council the housing authority purchased the property and is planning a multi‑phase development of affordable and supportive housing, but that the authority has informed city staff this project is not a traditional HUD‑subsidized development and currently "does not have money to pay the city anything for its services." Jeff (housing staff) and finance staff reviewed the typical pilot formula the city and other jurisdictions use: a payment in lieu of taxes equal to a percentage of gross rents after utilities, historically about 10% in analogous projects.
Councilors pressed staff for financial comparisons and asked for projected gross rents, estimated property tax equivalents and the expected city service cost footprint. "If we don't utilize that power, we're gonna lose it," one councilor said referring to the city's authority to withhold certificate of occupancy until service and payment arrangements are in place.
Several councilors and staff agreed the city cannot absorb recurring public‑safety and other general‑fund costs for a large development without compensation. "We have to be compensated for the service in order to provide this," a councilor said during discussion. Staff said the housing authority has paid quarterly under an older, small agreement and that the new project requires a revised and larger pilot agreement before the city can commit to permits and occupancy timelines.
Staff presented a range of options, including negotiating a pilot to be effective once units are occupied, tying infrastructure or capital contributions to later phases, or requiring a revised legal agreement as a condition of permit approvals. Several councilors indicated the council's preference was firm: a pilot must be in place before final occupancy or the city will not issue certificates of occupancy.
Ending: Staff will schedule a follow‑up meeting with the housing authority and return with modeled revenue estimates (gross rents less utilities), a draft pilot formula, and recommended permitting conditions before demolition or certificate of occupancy actions proceed.
Why this matters: the Bangor School project is a large, multi‑phase development intended to add workforce and supportive housing, but it will also increase demand on city police, fire and other general‑fund services. The council directed staff to ensure the development's operating model includes compensation for those services.
