Whitewater Creek Inc., of Hayden Idaho, and the nonprofit Spokane Housing Ventures are working together on a $27 million deal to buy a struggling South Hill retirement complex and to develop 180 additional units of rental housing there for families and seniors, some of which would be low-income units.

The buyers have until June 30 to complete their purchase of the property, which includes 124 units of affordable senior housing called Clare House Apartments, 22 "bungalow" units called Clare House Bungalow Homes, and a vacant parcel of land designated as Clare House Second Addition, to prevent the properties from being sold separately at trustees' sales. They would pay $5 million for the property, Whitewater Creek and Spokane Housing Ventures say.

In a recent ruling, Spokane Superior Court Judge Greg Sypolt gave Spokane businessman Harry Green, who developed the complex, until June 30 to find a buyer for the entire development and avoid losing a low-income designation. Sypolt's ruling blocked trustees' sales that had been scheduled March 5 for the property.

If Whitewater Creek and Spokane Housing Ventures complete their purchase of the property, they then plan to develop jointly an additional 180 units of rental housing on the property, including 120 apartments for families and 60 additional units of senior housing for about $22 million. They say that development would be funded in part through a combination of tax-exempt bonds and federal low-income housing tax credits.

Helen Stevenson, manager of acquisition and development for Spokane Housing Ventures, says development of the new units would begin right after the acquisition of the property, assuming that's completed, and likely would use adaptations of designs Whitewater Creek has used in some of its other developments.

Altogether, Whitewater Creek owns and manages 1,500 residential units it has developed in Washington, Idaho, and Montana, including Hawkstone, a mixed-used planned community it's currently developing in Liberty Lake.

"Whitewater has a huge amount of expertise, and bringing them in was the best thing that could have happened," Stevenson says. "Without their participation, we don't think we could have saved it."

Spokane Housing Ventures owns and operates more than 500 affordable housing units, including the nearly completed Bel Franklin Apartments, at 225 N. Division, which it has been renovating. Spokane Housing Ventures will have a majority ownership in the rental units at the Clare House development, including the new ones that will be developed, Stevenson says. The bungalow units are owned separately.

Green, who developed the independent-living retirement complex, originally 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, owned by Clare House Apartments LP, whose principals include Green. The second phase of work included the construction of 22 bungalow units, which are owned by a separate company named Clare House Bungalow Homes LLC.

In September, the apartment building for seniors there was placed in custodial receivership pending a trustee's sale to satisfy a debt of $3.9 million owed on the property. Trustees' sales have twice been postponed on all three parcels as Green has sought to sell the properties as a whole, arguing that if Clare House doesn't continue to operate with a certain number of low-income units, he will have to reimburse Steadfast Cos., a limited partner in the venture, for the loss of low-income housing tax credits worth about $1.4 million.