In an 11th-hour decision, the Oak Harbor City Council Tuesday narrowly approved the permits for a controversial affordable housing development to be built on Pioneer Way.

In a 4-to-3 vote, the council allowed the nonprofit developer Low Income Housing Institute, or LIHI, to move forward with a planned 51-unit, mixed-use development downtown.

The application was submitted nearly a year ago, and the project was discussed at heated community meetings, reviewed by the city hearing examiner and received hundreds of comments from the public.

Tuesday’s meeting happened at the city’s deadline to grant or deny the permits.

Council members against the approval said the low ratio of commercial space compared to residential in the structure didn’t fit the intent of Oak Harbor’s central business district.

Those voting to approve the permits for LIHI said they needed to follow the city’s code as written and listen to the recommended approval from experts, regardless of whether they “like” the project.

A proposed affordable housing development downtown will include retail space facing both Pioneer Way and Bayshore Drive. Image provided by Low Income Housing Institute

“It is the rule of law which makes our ordinances and codes meaningful and enforceable and provide predictability and a level paying field for an applicant, ” Councilman Rick Almberg said during the meeting. “And without that, we will succumb to chaos in our planning department and our planning process.”

The packet reviewed by city council members before the quasi-judicial proceeding Tuesday evening totaled approximately 1,100 pages of application materials, project information, staff notes, the hearing examiner’s comments and public input.

Though no new comments were allowed during the closed-record review, the audience at times applauded, mumbled criticisms or loudly responded to council members’ comments.

Households that earn 60 percent of the area median income or less will qualify to live in the nearly 40,000-square-foot structure. Approximately 20 units will be reserved for veterans. There will be 1,000 square-feet of retail space, some of which will front Pioneer and the other space will face Bayshore Drive.

Councilman Joel Servat-ius acknowledged the city’s need for affordable housing, but said he wouldn’t support the development because of what he saw as an “aversion” to adding commercial space by the applicant. He added that the proposed boundary line adjustment would create a unusable lot on Pioneer Way.

“I feel that the applicant has manipulated our code from the onset to rob this district of its primary purpose, which is commerce,” he said.

In response to questions from members of the council, Development Services Director Steve Powers said there is no ratio or number that dictates what is considered mixed use and therefore allowed in the district. Strictly residential dwellings are not permitted in the central business district.

Hearing examiner Michael Bobbink noted the lack of definition of mixed use in his recommendation for approval.

Bobbink wrote that the developer provided “significant information and evidence” demonstrating how their design will fit in with the “past, present and anticipated future” of the area.

Councilwoman Beth Munns called the project “barely mixed used.” She also questioned staff regarding concerns she had with the traffic study, landscaping, handicap accessibility, the developer’s plans for soil testing on the site of a former gas station, and the planning department’s reasoning for determining the design fit within the district.

Many of the central business district guidelines were written around 2000, Powers said in response to Munns.

Since then, he said, there have been three proposed new developments in the area that reached the project approval stage — Frasers Gourmet Hideaway, a project that never got built and the LIHI project.

“We are in the infancy of understanding what our codes actually produce, because we have not seen that building activity in the downtown,” Powers said.

Munns added that the downtown area is supposed to be walkable and argued that people residing there wouldn’t necessarily be walking through the district. She later added that it’s possible the residents would go to coffee shops or nearby restaurants.

Robin Amadon, LIHI housing development director, said that the project is designed to make the area more pedestrian friendly.

“We think that the careful design of our proposed project on Southeast Pioneer Way will do well to fill a long-vacant and very challenging downtown site, provide a pedestrian connection to Hal Ramaley Park and the waterfront, and strengthen the look and feel of downtown Oak Harbor,” Amadon said in an email.

The decision seemed difficult for some members of the council as they deliberated for almost two hours on the subject.

Councilman Jim Woessner went back and forth between his belief that the percentage of retail space was too low and that the facts before him seemed to indicate the applicant followed the city’s rules as written.

Councilwoman Erica Wasinger originally said she didn’t feel comfortable making a decision because of fear of personal liability, then later said she didn’t think the project fit the intent of the district and that there are other ideas better suited for it.

City Attorney Nikki Esparza said council members don’t have legislative immunity when it comes to decisions made in quasi-judicial proceedings that affect individual property rights.

Council members Tara Hizon, Bill Larsen, Almberg and Woessner voted to approve the permits. Servatius, Munns and Wasinger voted to deny it.

Amadon said construction is expected to begin in early November.