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Starting a BrickHouse


   By Tony Ahern
   Publisher
   It's one of the most exciting things to happen to downtown Madras in decades, yet it's coming with a tinge of controversy -- the sale of the Fourth-and-D property from the Madras Redevelopment Commission to the BrickHouse Group.
   It's a giant step in improving the look of downtown Madras. The developers have a fantastic three-story project planned, and they have to start building by June. Work on the newest showpiece building in Madras will be starting in a few months. That's the good part.
   The bad part? Several think the MRC sold the property too cheaply, didn't effectively market the property and were too quick to close the deal. Even the MRC chair abstained from voting on the approval over concerns.
   As for price, apples-to-apples comparisons weren't easy to find. There hasn't been a lot of bare land finalized purchases in downtown Madras along Fourth or Fifth Street recently. The buyers' timing was good. As their transaction was in the works, a piece of Fourth Street parking lot within a rock's throw from the MRC property, albeit substantially smaller, had been sold for about 75 percent higher per foot.
   As for marketing the property, the MRC appeared a little guarded, due in part to the many stipulations regarding development -- the type of business to go up, the rapidity in which they wanted development to start, etc. Their advertisement program consisted primarily of placements in the Daily Journal of Commerce.
   How about a sign on the property? Something, anything. The city's Bend-based realtor of record wasn't brought in on the project, though City Administrator Mike Morgan said he likely would have been soon had not the Brick House deal been reached.
   Marketing the property/project relatively quietly gives the impression of wanting to control who you deal with, whether true or not. Someone else may have been willing to give the MRC much more for the spot, even with the stipulations.
   If the MRC would have waited a little while longer, maybe gotten their realtor involved to better market the property, they likely could have gotten more for the land. Going by the BrickHouse plans, though, I doubt another developer would have committed to such a high-end building.
   Morgan also had another great point: Having such an upscale building on the site will allow them to get maybe $25 a foot for the remaining 24,900 feet.
   The other aspect of the MRC's land sale: making a profit wasn't really the target.
   From the outset, a primary goal of the MRC was blight removal, to improve the look of the town. That process itself is inherently controversial. It entails buying property, often including price-inflating structures that only have to be taken down, followed by the flattening and preparation for resale, all at a cost. When it comes time to sell the now-bare land, you can't get near what was invested in it.
   Blight removal -- both here and at the former Juniper Auto site on Fifth Street -- has been costly for the MRC. They've spent far more than they're making on selling the property. The blight removal commitments of the MRC have tied up its funds and made it impossible to provide loans to existing businesses for improvements -- the other primary reason for its existence.
   It was that aspect, the low-interest loans to existing businesses, that got the district off to such a rousing start early this decade, and helped invigorate our business community. One of the MRC's reasons for selling the property to the BrickHouse Group was to recoup some money -- now -- in order to have some to loan.
   Certainly the fact that a key member of the BrickHouse Group is Rick Allen hasn't cooled the fires of controversy. It was Allen, while mayor, who basically created the urban renewal district, which became the MRC, back in the early part of the decade. Seemingly a lightning rod for controversy, Allen shouldn't be unfairly lambasted over this. Yes, he more than anyone is responsible for the creation of the district, but he should be congratulated on that as the district has been very beneficial to Madras. Also, it should be remembered that Allen could have sought urban renewal funds to help with remodeling his Oscar's Building a few years back and did not. And, though the frontman, he is reportedly only 15 percent of the interest in the BrickHouse project.
   Over half of the BrickHouse Group is comprised of longtime Madras residents with strong business backgrounds. These people aren't going to build, lease and flee. Call it provincial if you will, but I find value in that.
   Like a good many governmental decisions, there is plenty to argue about and grouse over in this land sale. There are strong, legitimate points from both sides: those touting the MRC-BrickHouse Group sale as something to celebrate and those who think it was less than a stellar example of stewardship of public funds.
   When it all shakes out, the transaction will be a something to celebrate, a positive infusion for downtown, a commercial building to set a new standard for our community. In a few years, maybe even a few months, any cntroversy will disappear and an impressive building will sit as a centerpiece of town.