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City-owned McVey lots will go on the market

Lake Oswego will sell two McVey Avenue parcels it bought for a combined $1.7 million in 2009, although they likely won't bring in the same amount in proceeds.

At a meeting Tuesday night, the council voted 6-1 to put the two lots on the market, with Lake Oswego Mayor Jack Hoffman the lone vote in opposition.

The city acquired the waterfront properties at 706 and 716 McVey Ave. to make way for sewer construction across Oswego Lake. Mostly finished this year, the Lake Oswego Interceptor Sewer was reportedly the biggest public works project the city has completed to date.

It's unclear what the properties are worth now. When the city bought them, officials thought the Lake Oswego Corporation, which controls Oswego Lake, might be interested in acquiring the land later.

But it now seems Lake Corp. has only 'a passing interest' in the property, City Manager Alex McIntyre said.

And while some might see the lots as prime lakefront property, they are relatively small, and access to the water from each was apparently limited to the city's sewer project. Homes that were there when the city bought the parcels were razed.

McIntyre said he spoke with three Realtors who said the council would be wise to wait on a sale if it could.

The mayor said he thought property values were starting to creep up, which could lead to a better sale price in the future.

'My concern in selling the property now is it's probably at the lowest of the property values,' Hoffman said. 'It's basically a fire sale.'

Other council members said they didn't want to speculate.

'We don't have to accept fire sale offers,' councilor Mary Olson said. 'Just putting it up for sale doesn't mean we're going to sell it.'

Councilor Mike Kehoe said there's a chance the lots could appreciate in value, but 'they could just as easily depreciate more in the environment we're in.' And the city is losing property tax revenue it could receive if someone buys the properties and builds new homes there.

'I don't think we're in the land banking business,' Kehoe said. 'I don't think it suits us to sit here and gamble.'

Councilor Sally Moncrieff said she hopes the properties will remain residentially zoned, even if commercial buildings sit nearby.

'I want to always keep in mind consideration of the neighbor, who was such an excellent neighbor of the project all along,' she said, 'and make sure the zoning is residential and until it is sold it is maintained well.'

She also said she felt the properties had served their purpose, providing value in conjunction with sewer construction.

Officials will seek an appraisal before putting the properties on the market. The council will have the final say on the each property's ultimate sale price.

Because the lots were bought with money from the city's wastewater fund, any proceeds will return to that account.