Urban renewal project lags behind deadlines

by: VERN UYETAKE - The Lake Twin Theatre closed a year and a half ago in anticipation of renovations, which are now underway. Building owner Drew Prell this week received an extension to a deal with the city, which contributed money to his project in connection with development of Sundeleaf Plaza, seen to the right of the cinema.When it comes to the Lake Twin Theatre, city officials hope the fourth time is the charm.

If it's not then property owner Drew Prell may be on the hook for $200,000 to reimburse the city’s urban renewal agency under the terms of a development agreement approved in December 2010.

The Lake Oswego Redevelopment Agency Board on Tuesday approved a fourth extension to the deadline for renovation of the downtown theater, which has been closed for almost a year for remodeling. But city councilors, who make up the redevelopment agency board, made clear they don‘t plan to simply grant a fifth extension if Prell fails to finish interior work at the cinema by the new deadline of April 15.

“There is a public benefit expected,” councilor Lauren Hughes said. “That is to have the theater actually open and being used, and it’s been closed for quite a while. ... I’d like to see April 15 be firm.”

The city and Prell joined forces three years ago to provide a southern anchor at the city’s Sundeleaf Plaza, which now sits between the theater and Millennium Plaza Park, as well as to revitalize Prell’s building, at 106 N. State St., which houses both the cinema and Stickmen Brewery & Skewery.

The theater is part of downtown Lake Oswego’s urban renewal district, where revenue from increased property taxes is invested back into district projects such as public parks, updated streetscapes, grants to improve the facades of commercial properties and partnerships supporting new private development or redevelopment.

Sundeleaf Plaza, a LORA project completed in 2011, bears the name of renowned local architect Richard Sundeleaf, who designed the theater. And the city agreed to spend close to $450,000 on work that would improve the look of the building’s northern wall and result in a new outdoor seating terrace, a space that could be shared with the general public when a new café — planned as part of the cinema project but not yet built — is closed.

Prell did not attend the board’s Tuesday meeting but has provided status updates over time, said Brant Williams, the city’s redevelopment director. Although interior renovations were slow to start for the new café and to upgrade the auditorium space, which will have new seating and new audio and projection equipment new audio and projection equipment, they’re finally underway.

“I feel fairly confident the work is moving forward at this point,” Williams said, noting Prell now hopes to finish by mid-February, ahead of the new deadline.

Williams stressed that urban renewal agency money went only to exterior improvements already completed at the location and not the improvements now taking shape inside.

While the agency could impose a $200,000 penalty on Prell for not holding up his end of the agreement, doing that could risk the public benefits the city hopes to see once the theater reopens, Williams said.

“It’s pretty significant,” he told the board. “It could put an end to the project.”

Councilor Jon Gustafson voiced concerns about the precedent the redevelopment agency might set if it didn’t require a developer to hold up his end of the bargain. For example, the board recently approved another agreement for redevelopment of a whole city block owned by Gene Wizer next to Lake View Village. That project’s failure would pose far greater consequences.

“I feel like that sets a pretty bad example for our future development agreements,” Gustafson said. “Can you imagine another project that’s perhaps bigger, maybe a couple of blocks away, that somehow got stopped midway, and we were left with a hole in the ground that we had committed to?”

Gustafson said he’d support trying to add language to the agreement “to let this developer and future developers know there is a limit to our patience when it comes to these agreements.” At the same time, he noted, he didn’t want to sour relations with other developers and put a damper on future prospects.

Councilor Donna Jordan said the board should remember that Prell faced much tougher financial circumstances than anticipated. When he approached the board for an earlier extension, he attributed the delays to a feeble real estate market. He had been trying to sell other commercial property he owned elsewhere to finance the theater project in Lake Oswego.

Jordan added that the project itself presents a unique situation. It’s the only venue of its kind in Lake Oswego and is important to many in the community, she said.

“When Mr. Prell undertook this, he was very excited about his plans and what he was going to do, and the financial market for supporting this kind of development was a little tougher than he may have thought it was going to be,” she said. “I think we have to recognize that financially this is sort of a pet project for him.”

Contract Publishing

Go to top
Template by JoomlaShine