City ponders purchase at The Round at Beaverton Central
The long, strange saga involving The Round at Beaverton Central takes yet another twist as the city of Beaverton considers purchasing an office building at the complex and acquiring a nearby lot considered a key parcel in its Creekside Development Plan.
The City Council was briefed during an executive session Tuesday night on the complex deal involving a $8.65 million purchase of the South Office Building from one entity, and the free-and-clear conveyance of the vacant Lot 3 - along with several other key elements - from another.
The council will consider the transactions at its meeting Monday at 6:30 p.m. in City Hall.
Brokered by Community Development Director Don Mazziotti, the pending deals with LNR Property LLC and Scanlan Kemper Bard Companies fulfill several city goals involving strategic property acquisition and spurring development at the controversial Round development.
The primary driver behind a proposed purchase of the Metro/South Office Building from LNR involves the city-owned Central Plant - which generates heating, cooling and hot water for the entire Round development - housed on the building's first floor. The city is obligated to a $400,000 yearly lease of the plant's building space for at least the next 13 years.
'The building has been through a metamorphosis of ownership in the last 10 years or so,' Mazziotti said Wednesday afternoon. 'It's not a good story. The building's about 25 percent occupied, but for our major asset, the building contains the Central Plant.'
While the building could be used in a number of ways to the city's advantage, including as a profit generator and the possibility of relocating City Hall's government offices there, Finance Director Patrick O'Claire said being relieved of the Central Plant lease - which over 13 years would total nearly $5 million - makes prudent financial sense.
'The reason we're buying the building is to get out from under the $400,000 annual lease,' O'Claire said Tuesday night.
The city is also working with Portland-based Scanlan Kemper Bard Companies, which has agreed to invest and collaborate to spur completion and improvement to other areas of The Round, among them the ground-floor retail space, undeveloped parking lots and the South Plaza amphitheater.
Significantly, the developer has agreed to purchase Lot 3, a parcel north of The Round abutting Beaverton Creek, from its owner and hand it over to the city.
'(SKB) will purchase Lot 3 from the current owner, pay the back taxes on the property, then deed that to the city, free and clear,' Mazziotti said of the property appraised at $253,000. 'Once that's completed, all that is owed to the city on The Round (from prior developers) will be satisfied.'
In other areas and further detail, SKB proposes to:
• pay the city - in cash and real estate - the approximately $990,000 its still owed for public improvements at The Round;
• improve some of the vacant lots for surface parking, meeting city design standards, at least until the real estate market makes it feasible to build structures on those lots;
• purchase one city-owned Lot 5 at its appraised value;
• donate a portion of a lot at The Round's northwest corner to extend Rose Biggi Avenue to Westgate Drive; and
• pay the city $250,000 to finish the aforementioned South Plaza on the south side of the light-rail tracks, completing the half-finished amphitheater area in front of the lofts building;
In addition, the city will keep about $117,000 already paid by a prior developer for public improvements not yet built and will receive an option for exclusive, free use of 220 parking spaces in the parking garage to be used for visitors and tenants of the South Office Building anchored by Coldwell Banker real estate offices.
The only buildings SKB will not acquire are the lofts condominiums and the South/Coldwell Banker Building the city is considering for purchase.
Mazziotti said the deals, if approved, could mark a turning point for a once-promising, high-profile development that became known more for its failures than successes.
'Having a project of this magnitude, involving both components, creates a catalyst that will, in my view, attract, encourage and substantially benefit new investment that will come into an area that currently needs to be redeveloped,' he said.
Mayor Dennis Doyle expressed confidence the council would support the projects in the name of moving the city forward and fulfilling the original promise of The Round.
'The Council and I are steadfast in our commitment to fixing this black eye,' he said. 'We are attempting to lift a very dark cloud that has been hanging over Beaverton's head for far too many years, and are absolutely thrilled that a Portland based company, SKB, has stepped up to join the city in a collaborative solution.'