Merchants, city leaders cautiously optimistic about The Round's future
As a pioneer merchant of The Round at Beaverton Central, Michael Tocchini has his share of frustrations regarding the mixed-use development's rocky evolution.
The co-owner of Mingo restaurant, one of a handful of businesses at The Round's crescent-shaped, ground floor plaza, Tocchini would like to see more businesses - of any kind - move in. He'd also welcome more pedestrians strolling by on a daily basis. Furthermore, it's a downer to pass a debris-strewn dirt lot on his way to work every day, and he wonders if city leaders could do more to encourage development.
But if an opportunity to move his fashionable eatery presented itself tomorrow, Tocchini would stay put.
'I think it's a great spot,' he said, gesturing toward the elaborate fountain-centered plaza area outside Mingo's south entrance. 'This area, the piazza out here, suits us very well. It does fit our image.'
The Northeast Portland resident is putting his money where his mouth is. After more than seven years at The Round, Tocchini and his two business partners have extended their lease, guaranteeing three more years with an option to renew for another 10.
If Mingo maintains its loyal clientele - and the recent uptick in business keeps up - the decision to remain could be made for him.
'Customers think this is a great thing here,' he said. 'But they laugh quite a bit about the development. Everyone seems to think this could be a fantastic property if given the opportunity. We want to be sure it can reach its potential.'
Change in plans
'Potential' is a word frequently associated with the 8-acre complex, from its very conception in the mid-1990s to its latest sale and restructuring this year. Once the crown jewel of the city's downtown redevelopment plans, the partially completed, sporadically occupied office, retail and residential complex at 12725 S.W. Millikan Way 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 started the project in 1997. They declared bankruptcy in 2001, and the city took control. In 2002, Dorn-Platz Properties commandeered the project but 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 Realtors. Earlier this fall, 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 uncertain in whose hands the building will land.
While the city of Beaverton owns and operates The Round's Central Plant - supplying heating and cooling to residents and condominium tenants - it has no ownership role in the buildings themselves. Regardless, the future of The Round looms large in city leaders' vision for a revitalized, pedestrian-friendly downtown.
Councilor Ian King sees The Round as one - albeit high profile - piece of a larger redevelopment puzzle the city is addressing through its Civic and Visioning plans. A 30-year urban renewal plan based on tax-increment financing, which voters approved in November, provides much of the mechanism to set those plans in motion.
'Part of what the city does is make sure all these areas reach their full potential,' King said. 'It really is going to be a cohesive approach. There is not going to be a magic bullet to make The Round everything it could be. People may expect some single great event, but it takes a lot of little steps to get it where we want it to go.'
Seeing the light
The Round's retail plaza illustrates the paradox of the development's potential and current reality.
Mingo, Typhoon! and Mio Sushi - three stylish eateries featuring, respectively, Thai, Italian and Japanese-oriented fare - anchor The Round's inner sanctum. Real Food Real Life opened in July, and a 24-Hour Fitness outlet has operated since the summer of 2004. The newest tenant, Pacific Eye Trends, a state-of-the-art clinic run by Pacific University's College of Optometry, opened its doors to great fanfare in September.
Dr. Ken Eakland, the college's associate dean for clinical programs, served on the committee charged with finding a Beaverton-area location close to the MAX light-rail line. Despite some early misgivings, he's satisfied with where the school's sixth Portland-area clinic landed.
'(The location) was debated very heavily,' he said. 'We looked at three or four properties in the Beaverton area. This had all the advantages of what we needed: square footage, access to the MAX train, a centralized location. It had all the positives. But it had the negative, which was the historical, 'What's going on with The Round?''
Beaverton city officials were extremely helpful in terms of permit applications and otherwise clearing the bureaucratic path for the 3,119-square-foot clinic, he said.
'We talked with the city about what we were trying to develop and what our vision was. The potential risks were definitely outweighed by what I see as opportunities for the future,' he noted. 'If you go (to The Round plaza) on a Friday or Saturday summer night, any of those (restaurants), it's packed. I'm really thinking this is an opportunity for us.'
Some businesses, however, were unable to harness that opportunity. Between December 2007 and December 2010, Wine of Mine, Bias Salon and Spa and Nevada-based construction company Richard Joseph and Co. all closed their doors.
The success of Lofts at the Round, the development's residential component, is more difficult to gauge. Beverly Foster Chestnut, a representative with Norris, Beggs and Simpson, The Lofts' on-site property management company, declined to provide occupancy figures or comment about the 65 condominium units.
Up to date
Despite the empty spaces and stalled development, The Round's behind-the-scenes operations - including the city-owned Central Plant - appear to be on steadier ground these days. In 2008, the city was forced to take legal action to collect close to $1 million in delinquent utility payments.
Recent invoices from the city, covering a total of $97,250 in services for October, indicated the six entities contracted with the Central Plant - The Lofts condos, a parking garage operated by Fortress Investment Group and 24-Hour Fitness among them - had paid their utility bills in full through September. To prevent the earlier payment problems, the city added a safety clause to its Central Plant contracts.
'The safeguard for timely payments is the ability to stop providing services to the building when payment is not received,' said city Finance Director Patrick O'Claire.
The city leases property for the Central Plant - which is 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 year 2010-11, according to figures O'Claire provided. Since July, the Central Plant has operated in the black at about $10,000.
City Councilor Betty Bode said she stands by her 2005 vote authorizing the city to purchase the 1 million-square-foot capacity plant. 'The plant does make money,' she said. 'If we build out the other buildings, it will do even more. I don't buy the argument that we pay (too much) rent for the space in that building.'
Jim McCreight, vice chairman of the city's Urban Renewal Board of Directors, said a well-maintained Central Plant would likely prove its worth in the long run.
'My perception is there isn't any problem with the investment in the Central Plant that couldn't be covered with the development of the whole site,' he said. 'If enough sufficient-sized buildings become customers, the city could easily (recoup) its investment.'
New year's plans
While he's enthusiastic about the possibilities for downtown revitalization now that voters approved the urban renewal plan, Mayor Dennis Doyle admitted The Round has yet to fulfill the vision projected on it.'It's languished,' he said.
While he strives to counter the common perception that the city owns or controls the complex, Doyle said he and city leaders do what they can to bring attention to The Round's attributes and encourage development. The city collaborates with the Beaverton Arts Commission to sponsor the Last Tuesday summer concert series at The Round's plaza.
'We're trying to be as supportive as we can,' he said. 'There's only so much the city can do, and having events there is one of them.'
Doyle acknowledged growing space constraints at City Hall, including the Beaverton Police Department, as well as the need for a performing arts center. The city's business development team would not discount The Round and the adjacent 3.94-acre Westgate property as possible locations for expanded civic facilities.
'We're starting to earnestly look at space for City Hall and the police department, and we're looking for a performing arts venue,' he said. 'All those things are going to come up pretty heavily in 2012.
'We're not going to rule out anything in the city, whether it be reuse of an existing building or a lot of vacant ground. When an opportunity does come up - and we can move on it - we will. I think 2012 is going to provide some answers.'