The Bainbridge developer who is hoping to buy the 550 Madison Apartments has already signed a purchase-and-sale agreement for the property — as have the owners of the building — in preparation for a speedy sale of the apartment complex.

The 13-unit apartment building on Madison Avenue is owned by Housing Kitsap, a nonprofit housing agency, and the potential sale of the property has alarmed advocates for affordable housing on Bainbridge Island.

Housing Kitsap officials have said the agency needs to sell 550 Madison Apartments — one of three properties the housing authority has on Bainbridge — to get revenue that would help sustain the financially troubled nonprofit. Officials said the sale of the building wold provide more than $1.6 million in unrestricted cash that Housing Kitsap could use to support operations and pay off outstanding debt that will come due in the next fiscal year.

The sale of the apartment building, however, has prompted much despair, dismay and outrage on Bainbridge, where affordable housing options are limited and the median price of a single-family home is more than $800,000.

Though the Housing Kitsap board has been mulling a potential sale of the property for months, residents of the 550 Madison Apartments were only told of the sale June 5.

A community effort — led in part by Housing Resources Bainbridge, which hopes to buy the property and keep it as low-income housing — was launched soon after the public became aware of the potential sale. A letter-writing campaign has been underway for weeks, and a Facebook page, Save 550 Madison, has also been created to urge residents to contact Housing Kitsap commissioners about the sale.

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.

The quick nature of the sale — which caught residents of the 550 Madison Apartments and much of the Bainbridge community by surprise — may be finalized at Tuesday’s meeting of the Housing Kitsap Board of Directors.

Sales documents have already been signed, according to Housing Kitsap officials, “to not delay the dues diligence and feasibility review and approval.”

Madison Avenue Development, a development company owned by Bainbridge businessman Mike Burns, has offered $2,031,000 for the property.

Burns signed the sales agreement June 6, and the contract has also already been signed by Housing Kitsap executive director Stuart Grogan, on June 11.

The listing of the 500 Madison Apartments was met by a crush of potential purchasers, records show.

A total of 13 entities, including Housing Resources Bainbridge and Madison Avenue Development, are interested in buying the property.

Housing Resources Bainbridge has offered $1.5 million for the property, as well as a commitment to keep rent at levels affordable to low- and moderate-income families. No other potential purchaser has made such a promise.

Grogan, executive director for Housing Kitsap, is recommending the board approve the sale to Madison Avenue Development.

Offers on the property ranged from $1 million to the high of $2,031,000 set by Madison Avenue Development.

The offer by Housing Resources Bainbridge did not make it into the top four that were ranked by Housing Kitsap staff.

The Madison Avenue Development offer was followed by offers by other parties of $2 million; $1.8 million; and $1.65 million.

Beyond the 13 entities that submitted offers, three other parties were also interested in a purchase, but only one submitted a letter of intent (with an offer of $1.4 million).

Housing Kitsap has said it is unlikely that the agency will be able to buy another parcel with development potential in the Winslow downtown area “in the foreseeable future.”

Housing Kitsap officials also said the board of commissioners could elect to keep the property and refinance the debt, but that rents would be raised to market rents.

Another option for Housing Kitsap is to keep it as affordable housing, and apply for a new loan and grants to pay for deferred maintenance that’s needed as well as debt refinancing.

Housing Kitsap officials also note that “it would be difficult” for the agency to keep the property given the capacity of its staff and the organization’s ability to secure a loan.

The 550 Madison Apartments has 11 one-bedroom units and a pair of two-bedroom units. There is also a laundry room and parking for the complex on the property.

Whether a new owner would keep the property as-is is uncertain.

Housing Kitsap has said that maintenance of the building has been put off, and a rehab may be necessary to rent the apartments at market rates.

The housing authority notes the site has development potential that could nearly double the existing density on the property.