TRUCKEE, Calif. – The Truckee Town Council on Tuesday approved a plan for the Town to provide a $2.7 million construction loan for the Edmunds Loft workforce housing project, allowing the development team to move forward with construction this season.

The Council authorized the Town Manager to execute the financing and loan documents, approved a $2.7 million General Fund budget amendment to fund the loan, and added $15,000 to a capital improvement project to cover loan administration and legal costs.

The Edmunds Loft project is a partnership between the Town and Paradigm 8/Sagemodern to develop up to 12 deed-restricted workforce housing units on Town-owned land at 11860 Edmunds Drive. The site was provided to the Town as part of the workforce housing requirement associated with the High-Altitude Fitness development.

Rather than sell the property outright, the Town used the site to test a public-private approach to workforce housing development. The project was selected through a competitive process and is intended to help inform the Town’s Homegrown Housing Program.

The project experienced delays while the development team worked through site constraints, construction costs, financing and deed-restriction requirements.  The project was originally expected to break ground in late 2025 and later in summer 2026. Most recently, the private lender the developers planned to use could not meet the Town’s subordination requirements.

Town staff said the town’s loan is not intended to serve as a pilot program or model to be scaled for other housing projects. Rather, the approach is intended to expedite development because the town owns the land and the project represents the town’s first locally developed housing project.

Town staff said finding another lender could push construction to 2027. As a result, the Town explored becoming the lender itself, allowing the project to move forward while staff works with local financial institutions to identify lenders that can participate in future Homegrown Housing projects.

The construction loan will have a 24-month construction period followed by a six-month stabilization period, with interest-only payments. The loan is expected to carry an interest rate between 6% and 6.75%, depending on market conditions when the documents are executed.

The Town will initially provide the $2.7 million through periodic construction draws from General Fund cash reserves over the 24-month construction period.

Once construction is complete, approximately $800,000 to $850,000 of the loan will be paid down through the Town’s previously contracted purchase of the project’s workforce-housing deed restriction at certificate of occupancy.

If the developers refinance, the Town would receive the remaining loan principal earlier. If refinancing does not occur, the Town could continue holding the permanent loan and collecting interest for up to 25 years.

Edmunds Loft is the first project to use the Town’s Homegrown Housing Program. The program provides developers with financial and nonfinancial incentives, including a Town Density Bonus, to encourage workforce housing consistent with the Town’s 2040 General Plan.

The Council ultimately expressed support for providing the loan to Edmunds Loft, with all councilmembers voting in favor of the measure. The motion passed unanimously.

Councilmember David Polivy emphasized that while he supported the loan as a solution for the current project, he did not want the Town to become a long-term lender for future housing developments.

“This is not normally something we do, and it’s not a business we want to be in. I applaud our staff because they creatively brought up this solution, but I want to make sure our very near-term Homegrown Housing and work plan activities are positioned to find ways around this, so we don’t have to make future loans,” Polivy said.

Town staff said lessons from the Edmunds Loft project are helping shape revisions and expansion of the Homegrown Housing Program.