AUBURN – Councilors could bailout a Stevens Mill condominium project by delaying $65,000 in property tax liens for another year.

Developer Travis Soule asked city councilors on Monday to hold off on liens for 2006 and 2007 property taxes, giving him more time to make his 20-unit development profitable.

“The problem has been the housing market,” Soule told councilors. “I don’t think anybody anticipated that it would have declined the way it did.”

Northeast Bank filed a notice of foreclosure on the project in June, but Community Development Administrator Reine Mynahan said the city negotiated the bailout.

Under that agreement, Northeast Bank will delay foreclosure for 12 months.

The city will waive foreclosure on property taxes due from 2006 and 2007. Soule must pay off the past due taxes and further drop the per unit sale price.

Councilors are scheduled to vote on the matter at the Aug. 4 meeting.

Soule planned to renovate and sell the one- to four-bedroom condos for between $125,000 and $140,000 each. Of the 20 units for sale during the past two years, Soule has sold four units. He’s dropped the price, to $118,000 and $125,000 each.

He’s also begun renting some of the condos, bringing in additional income. So far, he’s rented four units.

“We still plan to sell them, and we will keep most of the units set aside for sale,” he said.

The project was financed partly with a $250,000 affordable housing loan through the city’s HOME program, which uses federal Housing and Urban Development money to help low-income people.

According to the agreement, 10 of the units were to be set aside for lower-income families, those making 80 percent of the local median wage.

People who qualify for the moderate-income condominiums will agree to take on $25,000 of the HUD loan as part of the purchase price.

Mynahan urged councilors to put off closing on the liens to preserve the city’s investment.

“We will still get our money,” Mynahan said. “When people qualify and come in, they take over that loan and pay us back. That’s how we get repaid, so we’re not hurt by waiting another year.”