The missing middle: Local developers moving forward with project to bridge Sterling’s housing gap

A group of local developers is one step closer to bringing some much-needed housing to Sterling.

Tyler Tarlton, Lou Pignatelli Sr., and Lou Pignatelli Jr. of Tarlton & Pignatelli LLC plan to construct multiple duplex-style townhomes, with one cluster planned for the 200 block of West Seventh Street and Avenue B, and another set at Lynn Boulevard and 16th Avenue. Each 1,200-square-foot unit will include two bedrooms, two bathrooms and a one-car garage.

The first phase will feature two duplex units - a total of four townhomes – at West Seventh Street and Avenue B, expected to be completed in early 2026. That site became available after the Sterling Industrial Development Commission recommended selling the vacant properties to T&P for $1 last November. A third unit, positioned between the first two to form a U-shape, will follow immediately afterward.

The second phase will add four to five duplex units at Lynn Boulevard and 16th Avenue, with completion targeted for late 2026. The project is designed to fill Sterling’s “missing middle” housing gap, and the developers are offering incentives that could make the homes more affordable.

Tenants will have the option to purchase or rent-to-own the pre-fabricated properties, with in-house financing available through Teddy Pendergrass Capital. Qualified buyers may also receive customizable incentives, including reduced down payments, zero money down and lower closing costs. Other incentives for qualified buyers could include:

• FHA loans with low down payment – as little as 3.5% required.
• Conventional loans with competitive rates and down payments as low as 1% .
• Seller assistance covering up to 4-5% of the home’s total cost.

“We can cover a lot of the initial cost because we understand that this market needs homes,” Tarlton said. “And we can’t price people out of the market that they actively live in. So we have things in place that will allow them to go into these homes comfortably.”

The Sterling City Council approved the company’s request to waive nearly $10,000 in building permit fees, minus the sewer connection fee, during its regular meeting Aug. 4. The decision followed heavy hesitation and debate among council members and city officials.

Building and Zoning Superintendent Amanda Schmidt said she was nervous that approving the request could set a costly precedent.

“It’s a slippery slope. The next person that builds a house is going to want to have their fees waived,” Schmidt said. “It is not something other municipalities haven’t done in the past. In the 14 years I’ve been here, we haven’t done that...It does make me a little uncomfortable, and I know I’m going to have people at my front counter asking to waive building permit fees.”

Alderman at-Large Allen Przysucha, who was the only member of the city council to vote against the request, told Shaw Local that while he fully supports the project, he shares Schmidt’s concerns.

“There was no precedent that had been previously set on this topic. On top of that, there is no policy that dictates who can apply, what amount can be waived and how many times a waiver can be applied for,” Pryzsucha said. “Unfortunately, we have now set the precedent that any builder or developer can have their permit fees waived. Is it best for the city to waive money generated that could go to pay for another firefighter or police officer? Put towards another street being repaired? I don’t think so.”

Ward 2 Alderman Joe Strabala-Bright suggested approving the motion while developing official guidelines for similar requests, but City Attorney Tim Zollinger recommended establishing those guidelines first. Ward 3 Alderman Josh Johnson countered that the long-term benefits outweighed the short-term loss.

“The one-time waiving of fees equates to almost $9,900 – for six units on these properties, we’re likely going to make that back in taxes within one or two years,” Johnson said. “So the benefit, I feel, far outweighs the risk...and we are going to make that money back in the long term.”

Pignatelli Jr. said that while he respects those concerns, he sees the fee waiver as a sign of the city’s confidence in the project’s value.

“We’re meeting their master plans by providing housing for the missing middle, while at the same time, we’re recognizing what a great strategic partner we have in the city of Sterling to give us the opportunity to develop those locations,” Pignatelli Jr. said. “We’ve had a warm reception from Sterling, and our product meets their needs really well.”