The city government is now a landlord.

The Lake Oswego Redevelopment Agency has purchased the property at 525 First St. for $1.18 million from the Sei il Cho Trust and Cho Family Trust. The building now houses a travel agency, a salon and other tenants.

It's the second property acquired as officials piece together parcels for the North Anchor project, a major urban renewal effort that could transform the north side of downtown.

In February, the LORA board agreed to execute an option to buy 500 First St., which it had been leasing under an agreement reached with former owner Barry Cain. The agreement allowed the city to lease the property for two years for about $11,750, with an option to buy it for $2.35 million. While the former Lacey's bar remains vacant, the city's arts council is now temporarily using adjacent space for free.

The 525 First St. property has seven tenants that will generate about $100,000 in rent for the city each year.

'We expect to continue those tenancies in place until we're ready to move ahead with the North Anchor project,' said Jane Blackstone, Lake Oswego's economic development manager, 'at which point we would work with tenants on relocation - and of course they're entitled to relocation benefits.'

Officials can't yet identify a specific configuration for the North Anchor project, but they are focused on scenarios that include a new public library and parking facility in conjunction with private development around First Street and B Avenue. In addition to the parcels obtained so far, officials have considered using 530 First St., 545 First St., 41 B Ave., 27 B Ave., and land the city owns southwest of First and B.

'We continue to pursue the balance of the acquisition plan to assemble a site for the North Anchor project,' Blackstone said. 'There are still more acquisitions yet to be accomplished.

'Getting the Cho property does give us a buildable parcel, but it would be challenging to get the project that is the most feasible, with the best layout.'

Work completed a year or two ago found the best option for a new library was a 60,000-square-foot space with two levels, 'which is a really nice, efficient layout for the library,' she said. 'We couldn't accomplish that as efficiently on this site.'

It remains unclear exactly how much the overall project will cost, or whether a bond measure will be needed to finance it.

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