City wants two homes for LOIS

Two houses on McVey Avenue will soon belong to the city of Lake Oswego, even if the city has to condemn one to get it.

Lake Oswego officials have been negotiating to buy the properties at 706 and 716 McVey Ave. since October. Both are currently for sale. The city intends to clear the houses from both properties and stage construction of the Lake Oswego Interceptor Sewer from the land.

The properties sit adjacent to Oswego Lake and are located just west of the Lake Oswego Corporation's dam on Lakewood Bay. Engineers plan to load pipe into the lake from the area, then assemble it in the water.

Property owners at 716 McVey Ave. have agreed to sell to the city. The owners of a neighboring property at 706 McVey Ave., however, have not.

The city has offered $790,000 for the three-bedroom, two bathroom home. It has been listed for sale for $949,000 since July 2008.

According to Councilor Frank Groznik, 'The only reason they don't want to sell this property is they don't like the price that's being offered because of real estate market conditions.'

But the city intends to have the property even if owners Robert and Gail Matthews don't agree to sell.

On Monday, the Lake Oswego City Council voted to send what is called a 40-day offer letter to the Matthews. In it, the city will formalize its offer and set an expiration date after 40 days.

'The letter will say the city will consider condemnation if they don't accept the offer … Condemnation requires a 40-day letter but it would be premature to call it condemnation (at this point),' said David Powell, attorney for the city of Lake Oswego.

Discussion among the Lake Oswego City Council at a meeting Monday, however, made it clear the city intends to condemn the property quickly if an agreement cannot be reached.

Once the 40-day offer expires, condemnation would require another 90 days notice to the homeowners while the city worked to relocate them.

If negotiations dragged on, the timeline would interfere with the construction schedule to replace the Lake Oswego Interceptor Sewer. The city is under order to replace it because it leaks into Oswego Lake, violating the federal Clean Water Act.

The city is including relocation costs in the 40-day offer to the Matthews, aiming to sweeten the deal by covering the same costs the city would absorb in a condemnation.

'The house has been on the market and we need to do something to get the waste out of the lake. It is our responsibility to do that,' said Councilor John Turchi.

Previous plans to stage the construction from the Lake Grove Swim Park met with such resistance that threats of litigation forced the city to look elsewhere. Construction has since shifted to the canal area but the city has continued to search for vacant land to ease pressures on homeowners there.

Interest turned to McVey Avenue after 706 McVey Ave. came on the market last summer. The neighboring property at 716 McVey Ave. has been for sale for two years.

Owners Anthony and Eugenia Benavente of Arizona have accepted $800,000 from the city for that property, though it is listed for sale for $959,998 and has been priced as high as $1.249 million. The city's offer was the highest of two appraisals.

The Benaventes have owned the three-bedroom, two-bath house since 2006 and have struggled to sell it since January 2007, even after a renovation that included new windows, plumbing, cabinets, roof and hardwoods.

Conversation at the council meeting Monday indicated that the Matthews, who have owned 706 McVey Ave. since 2001, have sparred with the city over its value. The city's offer on that property was also the highest of two appraisals.

The council approved related agreements Monday. In the agreements, the Lake Oswego Corporation granted the city unprecedented access to the east arm of the lake for construction. The city, in exchange, will allow the Lake Oswego Corporation to stage construction on its dam from 706 and 716 McVey Ave. in 2010.

The agreements are being held in escrow as negotiations continue on the property acquisitions.

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