After months of negotiation and several minutes of unexpected uncertainty, the Oregon Village Board approved a developer agreement Monday for the construction of a downtown apartment complex.

The village will contribute almost $1 million, including $800,000 in the form of a pay-as-you-go tax-increment financing obligation, plus 5 percent interest. That means the amount the property taxes increase after the building is erected will be diverted to a district, which will then return all the taxes paid – including those to other jurisdictions – until the pledge is paid off.

The village will also pay for the burying of utility lines and the rebuilding of the parking lot, two items the developer will arrange to have done and then seek repayment.

The “pay-go” amount hasn’t been in question for quite some time. It went through an analysis by the village’s financial adviser, and trustees have been on board with the idea of paying to tear down an old building for downtown redevelopment. But the board considered putting the agreement on hold in order to settle an unknown question of whether the site has any contamination that must be dealt with.

The lot, on Jefferson Street, was for a long time an auto repair shop, which means there could be various sorts of chemicals that have leaked into the ground. By state law, new construction on the property would be forbidden until such contaminants are cleared.

Consultants and village staff found no reason to think there are significant amounts of pollution, as testing in 2003 indicated the site outside of the building was clear. If anything, they said, the costs would be in the “tens of thousands,” rather than the millions some sites have had.

Still, because there could be legal consequences of a land swap between the village and developer, some trustees were cautious.

“You never know what was there before, and you wouldn’t want to remove a building later,” said Trustee Jerry Bollig. “I would like to test (first).”

The debate finally ended after the Spanrie Properties general contractor Mike Montalto offered to take village staff to the site and dig a hole with an excavator to check out what might be underneath.

“I feel confident it’s OK,” he said. “We can just dig the hole. I just want to make sure everybody’s comfortable in the conditions there.”

A provision of the zoning will require a parking plan for contractors, which everyone was comfortable with after having debated the issue at length two weeks earlier. Developer Brian Spanos explained that contractors are carpooling now in order to fit onto existing spots and when more people are on site – in June and July – they’ll work out an arrangement with BMO Harris, which has an extensive parking lot.

Village staff had previously suggested taking the initiative to lease 20 or more spots from the bank for the summer, but trustees preferred leaving it to the developer, and Spanos suggested it would be 10 more spots at the most and just for a few weeks.

Village attorney Matt Dregne also pointed out the agreement contains cross easements which make the private parking public to drive on and a breakdown of responsibilities for snow removal.

Trustee Jenna Jacobson was the lone vote against the deal.

Email Observer editor Jim Ferolie at oregonobserver@wcinet.com.