Issaquah council authorizes release of two affordable-housing covenants to fund Acres of Diamonds' 24-unit project

Issaquah's City Council on Dec. 1 authorized the mayor to execute a memorandum of understanding that would release two 30-year affordable-housing restrictive covenants and allow the nonprofit Acres of Diamonds to sell the properties at fair-market value to help finance a new 24-unit Family Renewal Home in Duval. The measure passed unanimously, 6–0.

City Attorney Rachel Bender Turpin told the council the MOU would require Acres of Diamonds to reimburse the city for previously waived permit and development fees (adjusted to current value) and repay costs for heat pumps installed through the city's low-income program. The properties at 250/252 SE Andrews (two duplexes) were subject to covenants placed in 2005–2006 and again in 2012, the attorney said. Acres acquired the properties in 2019 and currently operates them as transitional housing.

Bender Turpin outlined financial guardrails: proceeds from the sales are estimated at approximately $2,000,000 and would be placed into a restricted escrow account and not released back to Acres of Diamonds until the nonprofit had raised $6,750,000 in total for the Family Renewal Home. The new facility is estimated to cost roughly $12,000,000; Acres has raised about $6,000,000 to date and plans to break ground once it reaches $8,750,000 (about 70% of the goal), the attorney said.

Council members praised the safeguards and the staff's work negotiating the agreement. Council President Walsh said the package reflected careful work to protect the city's interest while enabling a regional investment that increases affordable capacity. Council Member Nichols, who was sworn in earlier in the meeting, said he was impressed with the compromise and said the proposal can deliver greater regional affordable-housing capacity.

Public speakers who addressed the council before the vote included residents and supporters of Acres of Diamonds, some of whom described the nonprofit's programs (counseling, job training and on-site child care) and cited its reported outcome metrics for families served. Kelly, a resident who said they toured Acres of Diamonds' Duval facility, told the council the MOU's escrow rules and fee-repayment terms reduce the risk the city would subsidize a project that never progresses to construction.

The council had the option to decline the MOU, which would have left the existing restrictive covenants in place and limited resale of the properties to affordable-housing uses, likely reducing sale prices. Instead, the council voted to authorize the mayor to sign the MOU and related release documents, sending the proceeds toward the Family Renewal Home if and when Acres meets the stated funding milestones.

The council vote was 6–0 in favor. The administration recommended the action; staff said proceeds returned to the city for heat-pump replacement would be reinvested in similar energy-efficiency programs.