Round and round it goes
Beaverton city leaders hope central plant investment will pay off at stalled development
There is perhaps no more prominent a symbol - in the hills west of Portland, at least - of the lingering economic malaise enveloping Oregon and the rest of the country than The Round at Beaverton Central.
Once a crown jewel in the city's downtown redevelopment plans, the partially completed - and sporadically occupied - office, retail and residential complex stands as a hulking reminder of boundless optimism cast asunder by harsh financial realities.
The Round's property and four buildings have negotiated a virtual maze of ownerships, sales, bankruptcies and foreclosures since Selwyn Bingham and Sylvia Cleaver first started the project in 1997. They declared bankruptcy in 2001, and the city took back control. In 2002, Dorn-Platz Properties took over the project and failed to complete the development.
Most recently, owners Beach Metro-Oregon LLC and Nebraska Partners-Oregon defaulted on The Round's lot nine, a five-story office building anchored by Coldwell Banker. As recorded by the Washington County Department of Assessment on Sept. 26, a trustee's deed indicates the property was foreclosed upon and sold to an entity identified as Millikan Way LLC for its highest bid of $14.6 million.
The property is expected to go back on the market in the coming months. Beyond speculation, it's difficult to say in whose hands the building will land.
While the city of Beaverton has no ownership role in the building or property itself, the future of The Round looms large in city leaders' vision for a revitalized, pedestrian-friendly downtown.
'It was an ambitious project that didn't quite come off,' says City Councilor Marc San Soucie, adding that even a stalled development is better than what it replaced. 'The property tax collections we get from it are significantly more than the sewer plant that was there before it. Those are good buildings. It's a great location. There is still great potential for that to turn into a benefit to the city.'
While the city may not own The Round, it does have a crucial stake in the development's success that goes beyond the conceptual realm.
Since 2005, the city has owned and maintained the 1 million-square-foot capacity central plant that supplies heating, cooling and hot tap water to most of The Round complex.
Deeded to the city in the wake of The Round's first phase of ownership shakeups by a subsidiary of the failed Enron Corp., the City Council - under then-Mayor Rob Drake - saw the central plant as an investment opportunity that, in the long run, would reap dividends as the complex grew and added tenants.
And despite stalled development and some hiccups, most notably legal action the city undertook in 2008 to collect close to $1 million in delinquent utility payments, the arrangement has worked, mostly, to the city's advantage.
The city leases property for the central plant - now operating at a third of its potential capacity - at $400,000 a year. The agreement is up for review after 20 years, at which time the council could continue the 40-year contract or unload the plant.
For the past three fiscal years, utility payments have netted the city at least small surpluses.
In 2009-10, the plant generated about $48,000 in income, which increased to around $88,000 in fiscal 2010-11, according to figures provided by city Finance Director Patrick O'Claire. Since July, the central plant has operated in the black at about $10,000.
'It hasn't turned into a goldmine at all, but it's holding its own,' says Councilor Betty Bode, who supported the city taking over the central plant in 2005. 'When the central plant was put in, the notion was we would have the follow-up buildings and the plant would be able to service them also.
'Since that didn't happen, we've only been able to generate revenue from the condos and one (office) building.'
Bode stands by her vote. It is at least, she maintains, a common-sense measure to keep the plant operational for existing tenants. At best, it's a future revenue generator for the city.
'I voted affirmative to pick up the power plant, to provide heating and cooling service to the tenants,' she says. 'Every other councilor who voted owns it too. It didn't turn over as fast as we hoped or wanted.'
Running hot and cold
At 13 years of age, the central plant - a surprisingly sparkly collection of boilers, motors and Dr. Suess-like tangles of large colored pipes housed in the Coldwell Banker building - is still considered state of the art and energy efficient.
Stan Maier, facility director for Linc Facility Services, the company the city contracts with to operate and maintain the plant's daily operations, says it's his job to conserve energy as well as expenses.
'We're always looking at opportunities to save energy,' he says. 'It's not your typical on-off operation. The other goal we have is to maintain the equipment. It's still fairly new technology, and we constantly look for better stuff.'
While it's difficult to calculate in dollar amounts how much energy is expended to maintain steady temperatures in The Round's vacant spaces, Maier says it's essential to do so in such an operation to protect water pipes and maintain air flow.
Temperatures in vacant spaces are maintained at nighttime 'setback' levels. In the winter, that translates to the low- to mid-50s. When the summer sun shines, the empty areas are not allowed to get much hotter than the mid-80s.
'It's just good maintenance practices,' Maier says. 'You want to keep a minimum of freshness in that space or it may impact other areas.'
Advanced electronic controls, he adds, make it possible to vary heating and ventilation to highly specific degrees.
'With digital controls now, and they're evolving all the time, we're taking advantage of that and maximizing that technology to get all the energy savings we can,' he says. 'All the systems have different operating hours, and we schedule them accordingly, based on businesses and uses, to capture as much savings as possible.'
Those energy-conscious goals are set by the city's Sustainability Program, headed up by Cindy Tatham. Tatham and Senior Planner Tyler Ryerson would like the entire Round project - from the central plant to the banks of nearby Beaverton Creek - be designated as an 'EcoDistrict.'
Still in its formative stages, the city-conceived designation would place a priority on inter-related improvements such as stream restoration, mass transit access and energy-use management.
Surveying The Round from the roof of the Coldwell Banker building and the landscaped property near Beaverton Creek, Tatham and Ryerson are optimistic the stalled project will grow innovatively as well as commercially.
With its MAX light-rail station and central plant operations already in line with proposed EcoDistrict goals, Tatham sees The Round as a potential magnet for grant money and an urban model for green-friendly development.
'I think the city's headed in the right direction,' Ryerson says.
'The potential is obviously right here,' adds Tatham. 'It's all in the package.
'I like to call it a diamond in the rough.'