PORTAGE | The declining housing market has hit the city's downtown revitalization efforts.

Tim Hill, of Sunquest Development, told the Redevelopment Commission on Wednesday afternoon that there just isn't a demand for residential construction in the city at this time. So far this year, Hill said, the city has issued only 21 residential building permits. That's down 90 percent from just a couple of years ago when the city issued more than 200 building permits.

Hill had signed an option to buy slightly more than an acre in the downtown redevelopment area earlier this year for $175,000. He had intended to build nine or 10 single-family homes.

Hill said because of the decline in the housing industry locally and nationally, he wanted to void his offer to buy and change it to an option to buy the property. Hill said he would pay the city 2 percent of the purchase price of the property to hold it for 12 months. If the project moved forward within the year, he would pay the remaining money. If the project didn't move forward, the option would expire and the city would keep the $3,500.

"The economy is terrible. The housing industry is terrible," said commission member Ed Gottschling, adding that taking the offer was better than not having an offer.

The commission agreed.

In other business, the commission approved advertising for bids for the environmental remediation and demolition of the former Dollar General store on Central Avenue. Economic Development Advisor John Shepherd said nothing unusual was found in the environmental analysis of the building.

The remediation will take place in late September or early October, with demolition to follow.