Major Modification to Crestview Crossing

The company developing the residential and commercial property on the northeast side of town known as Crestview Crossing received approval from the Newberg Planning Commission on a proposed major modification, scrapping plans to build more row houses and instead build an apartment complex and community center.

In May, J.T. Smith Companies submitted a major modification proposal for the residential and commercial space north of town on 99W. This modification proposal comes two years into the project. After two meetings discussing the proposal’s benefits and drawbacks, the submitted modification was approved on June 8, 2023.

“We’re really excited to start the project,” said Jesse Nemec, Senior Project Manager at J.T. Smith Companies. “Obviously, the banking and lending industry is more difficult now than it was before, but we’re ready to meaningfully affect affordable housing options in Newberg.”

J.T. Smith Companies, based in Lake Oswego, Ore., is “one of the Northwest’s top residential developers with 30 years of comprehensive development experience,” according to their website.

What is the Major Modification?

Crestview Crossing was initially a single-family housing project to be built by Chad E. Davis Construction LLC. They proposed 299 units across the entire development, all row-style houses similar to those seen on Oregon State Highway 99W on the northeast side of town.

The major modification alters the plan for the 6.84-acre westernmost lot, where they were going to continue building more single-family housing. Instead, they will construct two large apartment buildings and a community recreation area.

This will increase the number of units in the area from 300 to 386. The units will be owned by J.T. Smith Companies and leased instead of sold to individual buyers.

“One aspect is we think we’ve got too many of these skinny homes,” Nemec said, pointing to the easternmost part of the development. “Selling single-family homes is kind of difficult to do right now.”

The major modification proposal is presented as the housing market shifts from a growth phase with low interest rates to a stall as mortgage interest rates double. Nemec said that J.T. Smith Companies explored a pivot in strategy in anticipation of a market slowdown.

When they were planning the houses, the market was in a very different place. Potential homeowners could secure a home loan from a bank with a 2.7% – 3% interest rate. Since the federal rate hikes, those interest rates have increased to over 7% today. That means payments on a mortgage for a $400,000 home loan would jump from $1,602 per month in 2020 to $2,736 today.

“Overall, things are selling steadily in that neighborhood,” said Zach Bernards, a Willcuts Company Real Estate Agent and the listing agent for the houses in Crestview Crossing. “The market overall has been consistent for the last six months or so, irrespective of fluctuating interest rates.”

According to the Crestview Crossing project site, 83 of the 97 currently available houses in the development are sold. As of this article, seven are pending, and seven are available.

“We certainly have a lack of housing in the area, particularly lower-cost, quality homes,” Bernards said. “I believe new construction is the only way to fix the inventory issue because we cannot control how often resale homes come on the market. And with the low interest rates, folks were locked into the last few years. I believe we won’t see as many homes come to the market this year.”

The planning commission meeting discussing the major modification lasted two sessions due to the topic’s density. The Planning Commission challenged the proposed modification to ensure it fit within the existing community. The amendment requests surrounded parking availability for the additional units, as well as landscaping coverage.

J.T. Smith Companies made amendments based on concerns surrounding the development, and the modification was approved 4-3. Nemec said J.T. Smith Companies is working on final engineering and then construction. There is no current timeline for project completion.

Affordable Housing in Crestview Crossing

In the initial plan, J.T. Smith Companies planned to set aside five percent of the homes to be sold at prices tied to the local Median Family Income levels in order to provide affordable housing in the development. Before the development started, the City of Newberg adopted the Construction Excise Tax (CET) in December 2020 and then the developers paid that tax.

Former Newberg Mayor Rick Rogers said the new tax would fulfill the same goal as the original plan of selling homes at reduced prices — the money from the CET could be used to provide affordable housing opportunities in Crestview. However, City Council voted to end CET on May 1, 2023.

J.T. Smith Companies at this point already paid into CET and is not receiving a refund, so the obligation and incentive to build affordable housing is absolved. 

“What we’re providing is more affordable than a deed restricted house,” Nemec said in the June 8 Planning Commission meeting. He added that the homes J.T. Smith Companies builds qualifies for Section 8 housing, and that roughly 15 percent of the units they’ve built in other communities are Section 8.

Section 8 housing is a federal government program that assists “very-low income families, the elderly, and disabled to afford decent, safe, and sanitary housing in the private market,” according to the U.S. Department of Housing and Urban Development.

The Section 8 vouchers are available to individuals and families that rent houses, meaning a homeowner in Crestview Crossing would need to rent their house in order for Section 8 to be applicable.

“I don’t necessarily agree with the entire altruistic perspective here that this is all for affordable housing,” said commissioner Mike Griffiths. “Why can’t we reduce the number of units so we’re not asking for a variance in the percentage of parking?”

Nemec responded, “We’re trying to provide needed housing, we’re less than the previous density, and we are providing affordable homes. We know that the city of Newberg, based on needed housing or the housing needs analysis, proves exactly that we do need more multi-family land in the city.”

What Else is Going On at Crestview Crossing?

The commercial spaces at Crestview Crossing are filling up fast. Several companies have either occupied or intend to occupy the commercial spaces at Crestview Crossing:

• Bed Mart
• Color Nails and Spa
• Five Guys Burgers & Fries
• Graze Craze
• Jersey Mike’s Subs
• MOD Pizza
• OnPoint Community Credit Union
• Starbucks (Open)
• T-Mobile (Open)

According to Dianne Danowski-Smith, APR, Fellow PRSA, a representative from Crestview Crossing’s Public Relations, there is about 37,000 square feet available in the commercial space.

“This has been a pretty popular development so far,” Danowski-Smith said. “A lot of businesses are seeing housing and apartments rising adjacent to the properties, and with that has come a lot of interest from retailers.”

Of the announced businesses, one is locally headquartered (Color Nails and Spa). However, Danowski-Smith said that’s not intentional, and they’re looking forward to welcoming more local businesses should they be interested in the development.

“There is always an opportunity for smaller, local businesses to come in,” Danowski-Smith said. “We love to work with small and local businesses and to provide them with space among other brand-name businesses.”