PENDLETON — A long-gestating housing project is coming together, but not before the city of Pendleton and the project’s developer part ways.

At the Tuesday, July 21, meeting, the Pendleton City Council will be asked to buy a property behind the Pendleton Heights development off of Tutuilla Road and sell it to Chrisman Development to turn it into an 80-unit affordable housing complex.

Newburg developer Saj Jivanjee had long intended to use the bare land for a 100-unit apartment complex that would complement the neighboring 32 townhouses he’s already built. According to City Manager Robb Corbett, the situation changed when Chrisman approached Jivanjee about buying the property. The city had long been involved in Pendleton Heights through an infrastructure cost-sharing agreement, and under the new owners, the city and state plan to target the area for flood relief.

Significant flooding along the Umatilla River in February completely destroyed several mobile homes in Pendleton’s Riverside neighborhood, prompting the Oregon Legislature to allocate $7.5 million to rehouse residents displaced by the floods and build new permanent housing to replace the homes that were lost.

Under the agreement, the city will use part of the state’s money to pay Jivanjee $500,000 to repurchase the property, and then turn around and sell it to Chrisman for $533,000. Jivanjee will retain the 32 units that comprise Pendleton Heights.

Corbett said the city will take a $6,000 hit from the deal. The agreement with Jivanjee will wipe away $118,000 in infrastructure costs he still owed the city, but Pendleton will also avoid a provision in the agreement that would have required the city to pay Jivanjee $112,000 for completing the project.

But Corbett said the loss was negligible compared to what the city could gain in new, affordable housing. Corbett said the state will subsidize the cost of developing the housing in exchange for Chrisman capping the rates at 60% of the median household income, which is $49,671, according to the U.S. Census Bureau.

A Chrisman representative didn’t return a request for comment on July 17, but the Enterprise-based business advertises itself as a specialist in affordable developments.

Locally, Chrisman owns Indian Hills Apartments, a 46-unit affordable housing complex that was rehabbed in 2008. Other local developments include Buttercreek Apartments in Hermiston, The Greens at Montclair and Washington Park Apartments in Milton-Freewater, and the Boardman Apartments in Morrow County.

Corbett said Chrisman provided him with a two-year timeline to complete the project once they officially acquire the property.

If the council approves the agreement, the city will end a tumultuous eight-year relationship with Jivanjee.

Jivanjee began the Pendleton Heights project in 2012, and as he built and completed 32 townhouses at the site, the city heralded him for building new housing in a market where demand far outstripped supply.

But the project stalled after 2016, when Jivanjee announced he would build 100 apartments to complete Pendleton Heights.

His relationship with the city council occasionally grew contentious as he repeatedly asked the council to restructure the incentive agreement and sometimes missed infrastructure payments.

Although construction on the apartments never started, Jivanjee said he still intended to follow through on building them, but he was feeling “burned out” from trying to get the project done.

Jivanjee felt the city and state prioritized other developers over him despite his commitment to the community.

Jivanjee said the state denied his previous request for funding, but got involved once Chrisman got on board. He also felt that the city granted a more robust incentive package to I & E Construction, a Wilsonville business that’s in the midst of developing a 200-unit apartment complex on Westgate.

But in reviewing his time working in Pendleton, Jivanjee said his goal was always to provide housing to the “working people” who were getting a “raw deal” in the local housing market.