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Bond committee recommends Council consider $1.37 million boost for Neighborly Development project
Summary
The Salem Bond Oversight Committee voted July 23 to recommend that City Council consider up to $1,368,762 in additional bond funds and a waiver to count a planned phase 2 toward scoring for the Neighborly Development Casa Loma project; committee members debated whether allocating a large share of the $10 million bond pool now was prudent.
The Bond Oversight Committee voted July 23 to recommend that City Council consider awarding up to $1,368,762 in additional bond funding to the Neighborly Development Casa Loma affordable housing project and to waive a phase‑limit in the new bond scoring criteria so planned phase 2 production may be counted.
Michael Brown, Community Planning and Development staff, told the committee council adopted new bond scoring criteria last month and that the applicant had two fixes to meet the new minimum score: counting phase 2 toward production and tripling the required type A accessible units. "Council approved the bond scoring criteria last month, and, therefore, it's now in effect," Brown said during the committee briefing. Brown also said the original application two years ago had sought $3,000,000 and that the applicant has since asked for supplemental funding to address increased costs.
Committee members split on whether the additional award would usefully advance housing production now or prematurely lock up too much of the $10 million bond pool. One committee member said council reasons and competition made her "really struggling with this vote because we don't know what other developers may need," while a proponent noted the project would house 183 households and the city currently has a wait list of roughly 600. "This is a good project," another member said, adding that rising construction costs argued for front‑loading funding.
Staff and the applicant described why the requested increase grew: more detailed engineering drawings, two years of inflation and a change in the OHCS application process that delayed and complicated financing. The applicant noted a tax credit investor offer had fallen from $0.85 on the dollar to $0.75, widening the funding gap.
After discussion and a motion to refer the matter to City Council for a formal vote, the committee approved sending the recommendation to Council by voice vote. The recommendation package includes the waiver to count phase 2 and the supplemental funding request; Council will consider the formal action and any public hearing as part of its agenda process.
