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home : premium content : news May 29, 2016

1/23/2013 1:42:00 PM
Community support helps save Upper Valley M.E.N.D.'s Meadowlark project

Ian Dunn

Last year, when Upper Valley MEND and the city of Leavenworth applied for a Community Development Block Grant from the state, a lot was riding on it. The $750,000 was to be used to bring utilities to the 15 acre Meadowlark affordable housing development off Titus Road in Leavenworth.

The grant was denied, and it nearly killed project. Now, as MEND and the city are ready to apply again for the grant, it is truly remarkable to look back to see what happened to keep the project alive.

"In May, we got word the CDBG grant didn't work out," said John Agnew, president, Upper Valley MEND Board, at the Jan. 8 city council study session. "It blew a big hole in the project. I remember getting interviewed and asked, what's the implication of this? The board was saying, we literally do not know if the project can survive this or not."

The following June board meeting was all about risk, he said. How much risk is involved and can the board tolerate the level of risk it would take to get the project moving forward? The board's conclusion, he said, was to take couple months to see if they can find funding. They needed a business plan that worked without the CDBG grant.

"We need a business plan that is believable and that worked. The key element in this plan, infrastructure costs and construction costs on homes," he said. "And on the other side of the equation, price points on affordable homes, price points in the near market arena and the absorption rate for both."

Agnew said they attacked both sides of the equation. They went out and got formal contractor bids on infrastructure and competing bids on the preliminary home plans. Price points were adjusted on both the affordable homes, the near market homes and their absorption rates.

They tweaked those four categories and did some value engineering on the infrastructure pieces. That was all brought back together last November.

"It was not without risk, but it appeared to be a doable thing," he said. "However, we were out of money. And we were not willing as a board to put MEND out there on a limb to move forward, even though we had a plan that made sense. Because it relied on six to eight months of pre-development work. We had no cash to fund that."

From there, the plan was to get 40 to 50 people together in a room at different times and show them the numbers, the pro-forma and the spreadsheet. They people would be asked, if they were the board, what would they recommend?

And finally, they needed to raise $150,000, which would be the first deposit on a $500,000 capital campaign.

"That's what we did. The three weeks between Thanksgiving and Christmas we had a dozen meetings with 40 community members," Agnew said. "At the December board meeting, the team reported to us, success on both fronts. Yes, you should do this and they wrote us checks to fund the next six months of pre-development."

With that, the board decided to press ahead. Agnew said that everybody on the board drinks the Kool Aid about the importance of the project. They all really want it to happen. Because of that, he says they risk making a bad decision.

"We know that. That is why we wanted to take this to the community. If we are going to do this, we wanted to make sure if we told this story in realistic ways, with realistic numbers and asked people what they thought...what would they say?," he said. "Where would they come down on this? That gave us the comfort level to make this decision in December."

Board member Chuck Reppas said the support in the community was overwhelming.

"We actually intentionally had a few people that were naysayers about the project that we presented this to. At least one or two of them actually contributed money at the end," Reppas said. "It gave us a good deal of confidence we were doing the right thing."

Last year, prior to applying for the CDBG, MEND was 30 percent complete on plans for the homes and utilities. Now, they are at 50 percent complete for the homes and 60 percent for the utilities.

This allowed the builders to take the guess work out of it, said Brian Thompson-Royer, executive director, Upper Valley MEND. He believes there is more savings to be attained. The other part of the project, when looking at overall cost, is dependent on sales.

"We've been working with Leavenworth Properties now for two plus years," Thompson-Royer said. "We need to adjust the price to a point that is doable and reasonable in terms of the market. The first is the affordable homes on the land trust, generating $5.2 million in sales. Then the market rate units, the prices are significantly greater because it includes the land. They are not part of the land trust model."

The market in town for homes does not generate huge numbers every year, said realtor Lynn Stoddard. The average home is older and typically needs a lot of work. The Meadowlark homes would be a brand new home, not requiring $20,000 in repairs.

The homes would be a little larger. Most homes in town are two bedrooms.

"To see three and four bedrooms options... south of $300,000 is a comforting number for me to promote," Stoddard said. "Overall, I think absorption rate will work and the market is getting stronger. I think it is a great product that has never been here before. Keep the pace going in terms of the rates they are sold. I think we will have people lining up to buy them."

To purchase an affordable home, you must meet the income requirements set by the federal government. Currently, for a family of four, the maximum income in $47,000. The 22 near market homes currently don't have a limit. Thompson-Royer said it is around 80 to 120 percent of median income.

Having the affordable and near market homes in the same package creates an ideal situation for a realtor, said Leavenworth Mayor Cheri Kelley Farivar.

"I can't sell you this house because you make too much money. It is an affordable house. Thereby, I am going to move you to the near market home, which you certainly could qualify for," Farivar said. "Surprisingly, the two together create a situation which is market heaven for a realtor."

Stoddard said it is kind of exciting to be able to show something to somebody who did not think they could afford Leavenworth.

"They can in the affordable arena or trade them up if they don't qualify. It is a great, terrific, hopeful thing and I hope it happens," Stoddard said.

Ian Dunn can be reached at 548-5286 or

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