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City agrees to buy building at The Round

Developer in talks with Thai restaurant for Typhoon! space
by: Jaime Valdez The city is taking over ownership of the South Office building anchored by Coldwell Banker at The  Round at Beaverton Central.

If there's a tide of public opposition to the city of Beaverton buying an office building at The Round at Beaverton Central, nary a drop of it flowed into Tuesday night's City Council meeting.

In fact, the 30 or so minutes of public comment delivered a steady stream of positivity to rival what the mayor and five councilors offered before the unanimous vote to pay $8.65 million for the South Office/Coldwell Banker building at 21725 S.W. Millikan Way.

Here are some examples:

'This appears to be suitable conclusion and a satisfying outcome.'

'This is the kind of forward thinking we should expect from our elected officials.'

'This is a great opportunity to put our taxpayer money and thoughts to good use.'

'That we can all go forth and say, 'Yes, go and spend the money' is probably a good sign (of community support).'

'There seems to be a unanimous decision out in the Beaverton community.'

While time will tell if the latter is true, there's no doubt the council vote begins a significant new chapter in the often fraught relationship between the city and the stalled mixed-use development in Central Beaverton.

The city will use money from its $15.3 million general fund contingency account, coupled with a line of credit to offset the drawdown, to purchase the 108,000-square-foot, Class A office structure from LNR Properties, which is headquartered in Miami, Fla.

With no official plan in place for the monolithic, five-story structure's use, city leaders are eager to eliminate a $400,000 annual lease payment for ground-floor space housing a city-owned and operated Central Plant that serves the entire Round complex.

The city is on the hook to the building's current owner for up to 33 years, an expenditure that would amount to at least $13.3 million for the entirety of the lease. Although the city could technically opt out of its lease arrangement as early as 2025, it would also be obligated to dismantle or relocate the plant, or enter litigation over the plant's future, said Don Mazziotti, the city's community and economic development director.

Thai to the future

Tuesday's vote is the second landmark decision by the council this month regarding The Round.

On March 5, the council approved a collaboration with Portland-based Scanlan Kemper Bard developers to revitalize and complete several Round properties. With the exception of the South Office Building and the Lofts at The Round condominiums, SKB agreed to take over all remaining parcels; grant the vacant Lot 3 near Beaverton Creek to the city; work with the city to improve infrastructure, parking and landscaping; and remove $990,000 of the city's debt burden left behind by failed previous developers.

Speaking Tuesday night in support of the new public-private partnerships at The Round, SKB President Todd Gooding indicated his company is close to finalizing its deal. He said SKB is negotiating a lease with a Thai-oriented restaurant to take over the former Typhoon! space in The Round's north plaza. The Tigard-based restaurant chain closed its five remaining locations in early February.

'We have a letter of intent with a new Thai restaurant to backfill that space,' Gooding told the council. 'The tenants want to make it work. With new occupancy, we can make that living room we envisioned for The Round. We look forward to being your good neighbors.'

On Wednesday morning, Gooding said he expects to announce the restaurant tenant by late April.

Moving ahead

Calling South Office Building a 'fire sale-price' bargain, Councilor Catherine Arnold praised the work of city administrators and fellow councilors in bringing home the purchase deal.

'It's been in our interest to purchase that property for years,' she said after Tuesday's meeting. 'I'm just comfortable not to be losing money. It was a good price and one way to make a concrete plan out of the convolution that was The Round.'

Eric Janssen has lived in one of the Lofts' condominiums for nine years. Noting the condos are near full occupancy, he spoke favorably of the SKB and LNR plans and welcomed the city's intervention in the long-stalled Round development.

'I think the outcome is fantastic,' he said after Tuesday's meeting. 'I'm not sure what's going to happen (with the building), but I think this is a very positive development for the project and for the (condominium) owners.'

Janssen said he'd be fine with moving City Hall's government offices from cramped quarters on Griffith Drive to The Round, a prospect city officials have discussed and examined through feasibility studies.

'To me, it doesn't matter if the building is privately leased, but I think having City Hall there would be a good thing,' he said.

Susan Peter, who's lived at the Lofts for nearly five years, expressed her enthusiasm for the latest plans at last week's information session held at City Hall.

'I've always been optimistic about (The Round's) future, and look at the city making this purchase as being a good thing,' she said.

Adding she loves the complex's location on the MAX light-rail line, Peter said if The Round lacks anything, it's a 'sense of community. Which could easily be cured.

'I'm in this for the long term.'



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