Vancouver will give them two years to make good on a string of commitments, including raising an estimated $43.5 million to build an ambitious mixed-used project on a city-owned block cater-corner from Esther Short Park.

The city council agreed Monday night to place a two-year “development hold” on the block, immediately north of Vancouvercenter, during which time the city will neither sell the property nor sign a long-term lease with other parties.

The council’s 6-1 vote gave only preliminary approval to the development hold. City officials will draft a formal agreement with Southwest Washington Center for the Arts and return for final council approval in the next month or so.

The group’s plans include a 1,500-seat auditorium, a 250-seat black box theater, an art gallery and the potential for a 300-seat rehearsal hall.

No city money would be used to build or operate the project.

Councilwoman Jeanne Harris said Vancouver is continuing to mature and needs a performing arts center.

“It has absolutely nothing to do with Portland and it has everything to do with Vancouver,” she said.

Councilman Pat Campbell, who cast the only “no” vote, said he thought the city had been reserving the vacant block in hopes of attracting a Fortune 500 company.

“I feel a little whiplashed on this,” Campbell said.

The final agreement with Southwest Washington Center for the Arts is expected to include some tough conditions.

The city will require the project to be at last 10 stories tall, cover the entire block and include condominiums or apartments, offices and ground-floor retail space on at least three sides, fronting Eighth, Columbia and Washington streets.

The project will need to have a parking garage because the city-owned underground garage in Vancouvercenter does not have the capacity to handle a performing arts center’s parking needs.

Vancouver will also require the group to meet a series of benchmarks during the next two years, including:

•  Secure 75 percent of the estimated $58 million cost to build the performing arts center, or $43.5 million. The entire project, including the housing, parking and other features, is expected to cost $100 million.
• Obtain 75 percent of the funds for an operating endowment whose revenue would cover at least 40 percent of the center’s annual operating costs, which are estimated at $1.8 million.
•   Create a business plan for year-round use and demonstrate the ability to manage the performing arts center.
• Substantially complete architectural plans for the project and work with the city to ensure those plans meet parking and other considerations to support downtown redevelopment.

Councilman Larry Smith said he expects the arts group to comply with each condition before the city sells the downtown block at market rates.

“I look at these numbers and I look at them as absolutes,” Smith said. “I trust the community, and I’m willing to trust the two-year process.”

Arlene Johnson, the group’s executive director, said she believe the requirements can be met.

“We’ve very carefully researched the project, the site,” she said before Monday’s council meeting. “We believe there is enough interest for the community to get behind this project.”

Johnson said her group will be looking to tap federal and state funding, foundations and individual donors during the next two years.

“We have not even begun to try to do that because we did not have the site secured,” she said.

Paul Christensen, the arts group’s treasurer and the founder of the development firm Realvest Corp., is offering to manage the project, build the commercial portions of it and donate proceeds from the sale of condos to the operations endowment fund.

Such a fund is considered essential because the performing arts center isn’t expected to generate enough revenue to cover its expenses.