The Washington state Housing Finance Commission has agreed to issue $9.5 million in tax-exempt revenue bonds for a multifamily affordable housing project at the Clare House retirement complex on Spokane's South Hill.

Whitewater Creek Inc., of Hayden, Idaho, and the nonprofit Spokane Housing Ventures are working together on a $27 million deal to buy the struggling retirement complex, located at 4827 S. Palouse Highway, and to develop 180 additional units of rental housing there for families and seniors, some of which would be low-income units. They originally had sought $11.3 million in revenue bonds from the commission.

Todd Prescott, president of Whitewater Creek, declined to comment on the closing or project timeline, but Helen Stevenson, manager of acquisition and development for Spokane Housing Ventures, says the partners are very close to securing the needed funding for the first piece of that development, a planned 120-unit multifamily affordable housing project. Sixty additional senior-living units would be added later.

Funding for the multifamily apartment project would include the revenue bonds plus low-income tax credits, says Tia Peycheff, director of capital projects for the Housing Finance Commission. The state Department of Commerce's housing division has requested a release of tax credit assistance program funds from the U.S. Department of Housing and Urban Development on or about Dec. 2 for the project. Stevenson says those monies are expected to be around $500,000.

Peycheff says that if the revenue bonds can be issued by Dec. 31, the project also could involve a new program the Housing Finance Commission is administering. In that program, the U.S. Treasury would likely buy some or all of the bonds issued for the project with federal stimulus money. Peycheff says the Housing Finance Commission has requested an allocation under that program for the Clare House multifamily project.

Peycheff says that if the Dec. 31 deadline isn't met, the bonds would be sold through normal channels.

The commission doesn't typically pass a resolution to issue the tax-exempt bonds unless a project has a "high certainty" of moving forward, Peycheff says.

Spokane businessman Harry Green, who developed the retirement complex, originally had planned a multiphase, 418-unit campus on 18 acres along the Palouse Highway, just southeast of the Southgate commercial district. The first phase of that project included construction of the Clare House apartment building, as well as a community building and other amenities. The second phase of work included the construction of about two dozen bungalow units, which are owned by a separate company named Clare House Bungalow Homes LLC.

More than a year ago, the properties fell into foreclosure. Several times, scheduled trustees' sales that would have involved pieces of the development separately have been stayed by court actions as Green has sought to sell them as a whole to preserve their value. Trustees' sales were blocked again when Clare House LLC and Clare House Bungalow Homes LLC filed for bankruptcy in August.