Jim Thorpe Borough Council has determined that a 270-lot residential development on top of Flagstaff Mountain can legally move forward.

Council voted unanimously last week to grant preliminary plan approval to developer Jake Arner for the proposed Canyon Rim Estates subdivision. The project still needs final plan approval from council before construction could begin.

Arner first proposed the development in 2005 with 84 lots for much larger homes.

Arner’s attorney told council last week that the “McMansion” style of development is no longer possible for the project following the 2009 real estate crisis.

“Now the market bears small lots, small houses. It’s likely where we’re going to be for a long time. It’s geared toward millennials and also those who want to downsize their homes as well,” James F. Kratz said.

Despite the changes to the plan, council agreed to uphold a 2005 agreement which says Arner will contribute $240,000 to help repave Flagstaff Road when the project is done.

The development is proposed on 359 acres, which are currently the site of the 100-mile view overlooking the Lehighton area.

Much of the discussion before council’s vote revolved around whether the 2005 agreement still applies to this new plan.

When both sides signed the agreement in 2005, Arner agreed to pay $153,000 for the road improvements. In exchange, the borough agreed to relax requirements on streetlights and sidewalks.

Arner and his attorney used an inflation index from the publication “Engineering News Record” to determine how much the same road improvements could cost today.

Arner said it should only cost the borough about $150,000 to repave its 2.1-mile section of Flagstaff Road, and it can spend the rest to construct guide rails along the road.

Borough officials said the materials alone to complete the project would cost more than $150,000. On top of that, the borough would have to pay someone — either borough workers or a contractor — to do the paving.

“My road contribution that we’re offering up would pave Flagstaff Road. Even at your high figure,” Arner said.

Councilman John McGuire asked if the traffic from a development with 270 lots would have more impact on Flagstaff Road than one with 84 lots, both during construction and when the project was finished.

“The agreement was written for an 84-lot subdivision, now it’s 270. What’s the difference, and what effect would that have on the road?” McGuire said.

Arner responded that the traffic from the development would be minimal compared to the number of cars currently using Flagstaff Road as an unofficial detour, while Route 209 is closed for work on Mansion House Hill.

“We currently have 2,000 residents driving over Flagstaff from 9-3:30, and you can see the wonderful improvements you made on Flagstaff Road, those are holding up fine,” he said.

In their vote, council said that the borough will not take over the streets inside the development. That means Arner, or a homeowners’ association, would be responsible for maintenance and snowplowing. Arner said he would like the borough to take over the streets, and would build them to their standards. However, he said he would agree to council’s terms if it helped the project move forward.

“If you have super roads built to super standards and the people are paying their taxes, I think it’s fair that the roads are taken over. I do leave that to you — I don’t want it to be a sticking point.”

Council’s preliminary approval allows Arner to move forward in seeking final approval for the project. He must first get approval from the borough and the state for the sewage and stormwater facilities on the site.

Arner has proposed building a community sewer system, with its own sewage treatment plant near the site. The borough’s attorney, James Nanovic, said he believes the project will be required to hook up to the borough’s public sewer system.

Around the same time that Arner proposed the 270-lot residential development, he also submitted another proposal with about 275 campsites in place of the residential lots. That plan is still being considered. Council and Arner agreed to a time extension for the review of those plans.

Arner also has approval to sell wine from a farm stand tent on the property.