The fate of a highly visible but unfinished residential development in Oak Harbor may be decided next week.

It’s been about five years since 20 acres of trees and a small farm were removed from a 20-acre property on the hillside next to the Walmart and Safeway commercial development to make way for a 192-house development that still hasn’t been built.

In March of 2020, the city and developer Scott Thompson of Pacific North Group Inc. entered into a unique development agreement that offered him a great deal of flexibility, especially in the timeline for the installation of infrastructure.

Yet it appears that only limited progress has been accomplished on the project over the years, with no homes actually built. And the development agreement and subdivision is set to expire at the end of the month.

At a workshop meeting on March 25, council members will decide whether or not to grant an extension of the development agreement. The item is set on the agenda as an action item.

Development Services Director David Kuhl sent Thompson a letter on Feb. 11, advising of the deadline and stating that the city was willing to let the agreement expire, according to the agenda packet for the meeting. Then on March 19, Thompson sent an email to the city asking for an extension.

In a response to Thompson the same day, Kuhl noted that Thompson hasn’t completed any of the steps necessary to be granted an extension. He wrote that Thompson agreed a year ago to provide a schedule of construction but then never did. In addition, Thompson needs to provide an engineer’s cost estimate of known public improvements planned in the next year and a map showing all the planned construction in the year.

City code allows for a one-year extension of the agreement, the agenda states. In addition, the unusual development agreement allows for a possible future code amendment to create an additional one-year extension.

Kuhl suggested that the council has four options.

The first option is agree to a 30-day extension while waiting for Thompson to hand over the necessary documentation. If the paperwork is provided, then the city could offer a longer extension.

The second option is to process a one-year extension; the third option is for a two-year extension.

The final option is to let the agreement expire. If it expires, the city could work with Thompson to create a new development agreement, the agenda states.

Prior to the hillside development, Thompson proposed the large Wrights Crossing project south of the city, with projected 1,000-1,500 moderately priced homes. The project never happened because it was located outside of city limits and Island County officials concluded that the Growth Management Act limited the extension of the Urban Growth Area. Thompson sued the county but ultimately lost in the state Court of Appeals.

The meeting is scheduled for 1 p.m. on March 25 at City Hall.