AUBURN – Developer Travis Soule will get two years to make his Stevens Mill condominium development a success, councilors agreed Monday.

Councilors voted to waive foreclosure on Soule’s project. Soule owes the city $65,000 in property taxes and the city had a lien.

But the project also has $200,000 in federal housing funds tied into it, money loaned by the city. That $200,000 would not be repaid if the project fails, City Manager Glenn Aho said.

“I think there’s a good likelihood we would have to pay that back, with taxpayer dollars, if this project fails,” Aho said.

Councilors agreed.

“You took a risk, and we took a risk on you,” Councilor Dan Herrick told Soule. “I’m going to support this now, but I just hope we won’t be back here in 24 months, looking at it again.”

The project was partly financed with a $250,000 affordable housing loan using city managed Housing and Urban Development money, and the city could lose that if the development fails.

Soule blames a downturn in the housing market for the problems. 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. That’s left him on the verge foreclosure, with mortgage payments due to his bank and $65,000 in city property taxes past due.

Northeast Bank filed a notice of foreclosure on the project in June, but staff and the bank negotiated a deal to give Soule more time. According to the deal, the bank will delay foreclosure and 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.

Monday, Soule said the units would sell for $99,000.

“What that does is get the bank whole, and get the city whole,” Soule said. “It doesn’t get us whole, but it’s not a complete train wreck, either.”

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