The City Council turned down a developer's proposal to build 10 affordable apartments downtown at no cost to the city.




On Tuesday night, Allan Sandler laid out his idea to build the apartments above a small city-owned parking lot on the south side of Lithia Way.




He proposed that the city lease him the lot for $1 per year so that he could construct five two-bedroom apartments and five one-bedroom apartments. Sandler said he would pay the estimated $1.5 million cost of construction and would make, at most, 2 to — percent on his investment.




Sandler owns buildings that house several businesses, including Kat Wok and Martino's. He said he loves Ashland and the opportunities it has given him and wants to have a chance to give back by providing affordable workforce housing.




"I have buildings downtown and people who work downtown need places to live," he said.




Under his proposal, the ground level of the parking lot would have remained the property of the city, which could have retained it for parking, leased or sold it for business use. Sandler wanted the opportunity to match any business offer and turn the ground floor into an affordable child or elder care center.




Previous attempts




Sandler first proposed using the space above the parking lot for affordable housing several years ago. The city then invited developers, nonprofit groups and government agencies to submit proposals for developing housing there. The council ultimately selected Kendrick Enterprises and ACCESS, Inc. for the project, but the company and its nonprofit partner ran into a number of hurdles, including a state requirement that applicants for affordable housing grants submit costly, detailed building plans just to apply for a grant. The council rescinded the selection of Kendrick Enterprises and ACCESS, Inc. in October 2007.




To avoid a repeat of financing problems, Sandler proposed paying for the project without using any government funding. He asked the city to deal only with him on the project, rather than seeking new project proposals. However, Sandler said if the city preferred, he would back off and let another developer or organization go forward with the project &

as long as the developer or group could prove it had money available.




Negotiating a deal




In a letter to the council about his idea, Sandler said that approach would be "an effort to get affordable housing for the City of Ashland either by me or someone else without all the red tape and process of the past."




But some councilors were uncomfortable with allowing one developer to build on the site without opening up the process for other developers and groups to make new proposals.




"A sole source contract with an individual developer is not a healthy way to do business as a city," Councilor Eric Navickas said.




Councilor David Chapman said he would like the city to continue on the path previously set by the council to explore incentives for building apartments and to identify what regulatory barriers may be stopping apartment construction.




Councilors invited Sandler to submit his proposal later if the city opens up the process again and asks for new development proposals for the lot.




Dejected




Obviously frustrated, Sandler responded that he was no longer interested in pursuing his proposal. He said he has already spent $25,000 on architectural designs and other work to flesh out the idea.




"I withdraw my proposal. It's no longer on the table anymore. You don't have to worry about it anymore. It was a gift," he said.




Mayor John Morrison said he would have liked the city to explore Sandler's concept. Sandler had not asked for approval of the idea on Tuesday night, but only for the council to direct city staff to work with him to more fully examine the proposal.




"I consider it to be an opportunity lost," Morrison said after the meeting.




Staff writer can be reached at 479-8199 or vlaldous@yahoo.com.