The Housing Kitsap Board of Commissioners agreed to postpone the sale of the 550 Madison Apartments to give Housing Resources Bainbridge 30 days to match the $2 million offer on the 13-unit apartment building that was made by a private developer.
The board voted 4-1 for the delay, with Commissioner Robert Gelder voting against the extension.
Commissioners, pointing to the dire financial condition of the Silverdale-based housing authority, said they wanted to get as much money as they could for the apartment building on Bainbridge, one of three properties on the island the agency owns that supplies housing to low- and moderate-income families.
Commissioner Rob Putaansuu, who is also mayor of Port Orchard, stressed that Housing Kitsap remains on a shaky financial footing, and recalled that agency officials had previously spoken with a bankruptcy attorney.
If Housing Kitsap was forced to file for bankruptcy, he said, it would not only affect those living in units owned by the housing authority on Bainbridge, but the more than 900 families who are tenants of Housing Kitsap across the county.
“I have to look at the big picture for the entire agency,” Putaansuu said.
“I know that I have to vote to get as much as we can,” he said.
Madison Avenue Development, a Bainbridge-based development company owned by Mike Burns, submitted an offer for $2,031,000 for the apartment complex.
But the potential sale has been highly controversial.
Affordable housing advocates said the sale of the property would mean the loss of affordable housing on Bainbridge, where rental units for low- and moderate-income residents are becoming increasingly rare.
And though Housing Kitsap officials have been talking in private about selling property to help ease the agency’s financial burdens, tenants of the 550 Madison Apartments were only told of the building’s potential sale earlier this month.
At Tuesday morning’s meeting of the board of commissioners of Kitsap Housing, Bainbridge Councilman Matthew Tirman urged his fellow board members to postpone accepting the developer’s offer — one of 13 made for a purchase of the property — and give Housing Resources Bainbridge 60 days to raise funds to close the gap between its offer of $1.5 million for the apartment complex and the offer made by Madison Avenue Development.
A standing-room-only crowd packed the commissioners’ board room for the vote. Some brought cardboard signs saying “SAVE Affordable Housing!” and “WE NEED MORE Not Less!”
Burns also owns vacant property on Madison Avenue that surrounds the 550 Madison Apartments. He said his development plans for his property have been problematic, and told commissioners he had approached Housing Kitsap in the past to explore ways of redeveloping the properties together, while keeping the same number of affordable units.
He also said the 550 Madison Apartments was in disrepair and had reached its “life expectancy.”
In a letter to the board, he noted his earlier discussions with Housing Kitsap’s executive director included the idea that Kitsap Housing could manage new apartments with “work-force” rate rents, or buy them outright.
Housing Kitsap has owned the property since 2001, and bought the apartment complex with a combination of grants and debts. The agency still owes $325,000 on the property, but restrictions that require the complex to remain as a low-income rental property expire July 21.
Commissioner Becky Erickson, who is also mayor of Poulsbo, repeatedly reminded her colleagues on the board that it would be premature to sell the 550 Madison Apartments, as well as another 6.3-acre property in Poulsbo, until an amended County Loan Agreement is approved by county commissioners.
Otherwise, Erickson said, any proceeds from property sales would go directly to the county, and not Housing Kitsap.
The 30-day extension, officials said, will not only give extra time to Housing Resources Bainbridge to submit a better offer for the apartment complex, but also allow county officials to update its loan agreement with the housing agency before any property sale is completed.
Tirman also called for the board to reject the offer from Madison Avenue Development, but that request failed on a 4-3 vote.