POULSBO — When Poulsbo’s former city hall property was sold in June 2014, the buyer expected to build a hotel on the site. Those plans have changed.

Poulsbo can expect to see apartments added to the downtown landscape.

“The plan right now is to build apartments, which I think is really cool,” Mayor Becky Erickson said. “The idea of having an apartment downtown is pretty alluring.”

“There’s a market there, where people want to live in a downtown area but they can’t afford to go and buy a house,” she said. “They want to live close to the downtown core and this will give them a chance to do that — to live downtown with covered parking, and the bus will go right by there. It’s alluring, not only to younger people but elderly people as well.”

According to Erickson, discussions for the apartments describe a three-story building, with underground parking, retail on the first floor, and an interior courtyard.

The change in plans from hotel to apartments happened late in 2014.

“If we wanted to, we could use the same building for either use,” said Jim Laughlin, who is handling the sale for buyer Michael Burns. “But they did some market studies on both apartments and a hotel, and the apartments came back more sustainable and viable at this point in time.”

Burns — a Bainbridge Island businessman — purchased Poulsbo’s former city hall property at 19050 Jensen Way in June 2014 for $1.2 million. The idea at the time, according to Burns, was to build a hotel with retail space and underground parking.

Earnest money of $25,000 was paid to start the process, which came with contingencies, such as having a plan for the site within six months. But planning became more difficult than expected and, on Feb. 4, the City Council voted to extend the contingency timeline for another six months.

“Their timeline was pretty aggressive” Erickson said. “They’ve been working with an architect and they needed a little more time.”

The extra time will allow for Burns and his architect — Jim Cutler of Bainbridge Island — to draft plans that meet city codes for downtown development.

“The city has some design guidelines and they didn’t like our original plan so we went back the drawing board,” Laughlin said. “We’ve been trying to get it to a point that they will like.”

The main design conflict was a small one, Laughlin said, and had to do with setbacks for the height of the three-story building. Designs are being altered to meet the code.

“We hope to get an application in within the next few weeks so we can move forward,” Laughlin said.

The designs that have been tossed back and forth between the city and the architect have yet to be made official, and have gone through a variety of changes. But Laughlin and Erickson, who have seen the plans develop, said the building looks promising for downtown.

“The stuff I’ve seen is really attractive,” Erickson said. “I think they will have a waiting list for people to get into those apartments.”

The former city hall property is one of two city properties that have recently sold to buyers intending to place apartments downtown. The city has been in negotiations with Sound West Group of Bremerton for the purchase of Poulsbo’s former police station on Hostmark Street. While no plans for the police site have been made official, and the sale has not been finalized, the construction of apartments were part of the discussions for the sale.