Site work underway for 11-lot subdivision, plans nixed for 10 accessory units

Drivers breaking off from Highway 99W on to East First Street may have noticed a spate of new activity in recent weeks at the former location of Newberg Marquis after a long period of idleness.

That new activity has been site work on the property —which is now nearly complete — as a Portland-based developer trudges through delayed plans to build 11 single-family homes to be marketed as rental units specifically to George Fox University students. GARY ALLEN - Site prep and excavation has been completed for the site on East First Street that will become an 11-lot subdivision of homes where Newberg Marquis once stood.

First proposed as just an 11-lot subdivision in fall 2015, Portland Houseworks then proposed adding 10 accessory dwelling units — or ADUs — to the mix a few months later.

However, Sean Heyworth, a partner with the boutique real estate company and a GFU alumnus, explained that they have backed away from those plans since financing got too complicated between the relatively novel ADU concept and cautious lenders.

"It's just unconventional, it's a little challenging to finance, it requires more capital up front from the owner … we didn't really want to go bring more capital into the deal," Heyworth said.

An ADU is a secondary residential unit on the same lot as a primary residence, generally a house. It's a concept that's been around for quite some time, sometimes referred to as "secondary suites," "granny flats" or "mother-in-law apartments," but in recent years the development concept has taken off markedly in the Portland area.

The city of Newberg's Affordable Housing Commission has recently identified promoting ADUs as a way to increase affordable housing in the city and recommended easing restrictions and fees on houses built with such units. However, regulations at the time for the now-abandoned "Ursus Place" ADUs plan was proposed required it go through an additional review process beyond the base 11-lot development.

"(The city) seemed to like it, they seemed to be in favor of it, but, again, the financing got too complicated. So, it's unfortunate," Heyworth said.

However, the real reason for the delay has been with utilities, specifically a stormwater line city maps showed on First Street that doesn't actually exist, Heyworth said.

He explained that it took 10 months to come up with a stormwater solution that passed muster with the city and the Oregon Department of Transportation – both of which had to sign off – and another few months to get a contractor back on board.

"We got to the point in the project where there was no turning back, we've just got to get it done," he said.

Community Development Director Doug Rux confirmed in an email that the city has approved the plat for the subdivision and posted a bond to complete public improvements.

He said the next step is to submit building plans and permits to the city, which Heyworth said he plans to do in the next six weeks or so.

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