The Salt Lake City Council has killed, at least for now, a low-income housing deal proposed by the incoming Salt Lake County mayor.

In a 4-3 vote, the council, acting as the Salt Lake Redevelopment Agency Board, turned down a deal by Peter Corroon's nonprofit development corporation to sell some low-income housing stock to the Multi-Ethnic Development Corp.

Corroon called the move "unfortunate" and accused the city officials Friday of talking out of both sides of their mouths. On the one hand city leaders say they want affordable housing but on the other they reject deals that would strengthen affordable housing stock, he said.

"Obviously they're putting some roadblocks in, which is unfortunate, especially when the city wants affordable housing and then will make it difficult for people to do that," Corroon said.

RDA board chairman Eric Jergensen, who voted in favor of the deal, agreed, saying the vote "was a little bit disturbing."

Corroon's group, Green Street Partners, this year opened a 25-unit complex at 925 S. 200 West. The development was put together after the RDA sold the land to Green Street. Corroon's group opened the project in April and was the only contractor to bid on the deal.

Six months after opening, in what appeared to be a win-win deal, Green Street decided to sell the property to the Multi-Ethnic Development Corp., which provides development, management and consulting services for affordable housing.

Corroon's group is set up to build affordable housing projects and turn them over to other nonprofits to run. The sale would allow Multi-Ethnic to move its corporate headquarters into the first level of the housing complex.

The only catch was that a loan from the Utah Community Reinvestment Corporation (UCRC) to Multi-Ethnic required that the RDA release some conditions.

One was that if the first-floor commercial area wasn't rented for 180 days, the RDA could lease it out for 75 percent of market value. Other requirements gave the RDA assurances that the property would be used for affordable housing.

Those assurances, Jergensen noted, are no longer needed because long-term investors in the project need the housing kept as low-income in order to get the tax credits they need.

"The RDA is owed no money" and the loss of the requirements "would not affect the RDA in any way," he said.

Corroon agreed, noting, "The RDA did nothing but sell us the land. We're getting nothing from the RDA, and they put all these restrictions on us."

Councilman Carlton Christensen, however, was one of four council members who were unwilling to waive the requirements, and he openly wondered if the City Council would make such exceptions for a nonprofit that wasn't run by Corroon.