Developer breaks ground on 276-unit market-rate apartment complex

Published 7:00 am Tuesday, March 10, 2026

HERMISTON — Hermiston officials Monday, March 9, celebrated the start of construction of The Hub Hermiston, a new 276-unit market-rate apartment complex on Diagonal Boulevard.

The $50 million complex, developed by I&E Construction out of Wilsonville, will be at 963. E. Diagonal Blvd. and is expected to be completed next year. The complex will include multiple buildings. Management will start preleasing the units in July and hopes to have the first tenants moved in by the end of the year.

“Adding a significant number of market-rate apartment units will provide an on-ramp into the community for working professionals who we hope will eventually set down roots and buy homes in Hermiston, rather than exporting their salaries to the Tri-Cities,” Assistant City Manager Mark Morgan said.

Complex to include full gym, pool & spa

Tom Ivanov, asset manager for I&E Construction, said the complex will include one-, two- and three-room apartments with a mix of studio apartments. The complex also has a full gym, pool and spa as well as a pickleball court. There will also be a community room for the tenants.

The development comes after the city signed an incentive agreement last summer with the developer to pay a sizable portion of the its property taxes between now and 2031.

Under the terms of the agreement, the city will reimburse the developer 100% of the taxes it ends up paying for the property in 2026 and 2027, 75% in 2028, 50% in 2029 and 2030 and 25% in 2031.

When the agreement was signed in July 2025, Morgan said the developer will pay all of its property taxes which will allow other taxing jurisdictions to receive their tax revenue as normal.

“When the developer comes back to us every year and shows how much they actually paid in local property taxes, then the city will give them cash in an amount equal to a certain percentage of how much they paid in taxes depending on what year we are in the cycle,” Morgan said.

City to pay 66% of property taxes over 5-year period

When it’s all said and done, the city will end up paying 66% — or just more than $1.3 million — of the developer’s property taxes over the five-year period.

“Our incentive package works out to less than $4,000 per unit, which is incredibly affordable,” Morgan said. He said the new apartment complex “will yield dividends for local businesses as the community is expected to retain more than $20 million per year in household wages that can be spent supporting restaurants, retailers, and service providers in Hermiston, rather than the Tri-Cities.”

Tom Bivens, director of development for I&E Construction, said the company likes to build in under-served areas.

“We’re excited to be working with people who want to make this a better place to live,” Bivens said.

Filling a housing void

Market-rate apartment complexes are the one type of housing the city lacks in adequate numbers, Morgan said. Hermiston has averaged 108 new single-family homes each year since 2020. Since 2019, there have been an average of 27 income-restricted rentals built annually, but not a single market-rate apartment complex has been built in the city within the past 10 years.

“This type of market-rate apartment complex is what we really need,” Morgan said.

Morgan said the new apartment complex will accommodate a significant number of people.

“For a sense of scale, assuming our typical 2.5 people per housing unit, this means that at full-build-out, we expect that there will be more people in this apartment complex than currently live within the entire city limits of Echo,” he said.