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City agrees to buy additional property for police/911 facility

Purchase of building at Third Street and A Avenue will provide more room for parking, personnel and other 'active uses'

REVIEW PHOTO: GARY M. STEIN - Over the past year, the City has negotiated to buy two pieces of property next to City Hall (which rises in the background) for a new police/911 center: the building next door, which houses medical offices; and the building at the corner of A Avenue and Third Street, which is home to LexiDog Boutique & Social Club.The Lake Oswego Redevelopment Agency approved an agreement Tuesday night to purchase a downtown building and property on the corner of A Avenue and Third Street for the future location of the City’s police headquarters and 911 dispatch facility.

City officials have been pursuing the sale for several months, and the eventual design of the new police station has largely depended on whether the City could acquire the property.

The approval marks the start of a 45-day due diligence period, during which LORA will perform inspections on the land and building and review the existing leases. The final sale will take place “no later than 20 days” after the end of the review period.

The City will pay $1.5 million for the property, which has an appraised value of roughly $700,000. LORA also will pay the entire 5-percent real estate commission, according to the agreement.

SUBMITTED MAP - This week's agreement to purchase the property at 366 Third Street for $1.5 million will allow the City to build a new police/911 center that stretches from City Hall at 380 A Ave. to the corner of A Avenue and Third Street. The City bought the property at 320 A Ave. in April 2015 for $1.15 million.The property is currently owned by Frank Gemignani Jr. and Eileen L. Gemignani, but the building is leased to the canine daycare business LexiDog Boutique & Social Club. The lease terminates in 2018, but LexiDog has an option to renew it until 2023.

“Once the review period is over, we will have committed to purchasing the property, assuming we do that,” Redevelopment Director Brant Williams told The Review. “And then we have to make some decisions on the timing of the police facility and working closely with the tenant, hopefully trying to find them a place somewhere in the downtown area that meets their needs.”

The property actually consists of two parcels: 366 Third Street, which is the commercial building currently leased to LexiDog; and 306 Third Street, which is the building’s parking lot. Williams said finding a new home for LexiDog will be a high priority for the City, although — depending on how the deal proceeds — the business could remain where it is for a while, even after the sale is finalized.

“The lease will become the City’s lease at that point. We’ll be the owners of the property,” Williams said. “So then the redevelopment agency will have to decide how it wants to handle that. We still need to get info about the lease itself. That’s part of the due diligence period.”

Since the plan is to eventually replace the current building with the new police station, Williams said the City isn’t too concerned about any long-term problems with the existing structure. What would be more likely to derail the deal, he said, is if the inspections uncovered costly short-term problems with the building that the City would have to fix.

“If we decided to not build a police station for another five or 10 years, until the lease was up, then we would have to incur whatever those (maintenance) costs were, and we might decide that we don’t want to incur those costs,” Williams said.

Assuming no issues arise during the review period, this week’s deal will be the second major property acquisition for the new police facility. The first took place in April 2015, when the City purchased the medical office building at 320 A Avenue. But officials said that property alone wasn’t quite big enough for the future station, which would have ended up sandwiched between City Hall to the west and the LexiDog building on the opposite end of the block.

“Building a new police/911 facility on the single parcel at 320 A Avenue would result in certain construction challenges and operational deficiencies for the police department,” Williams told LORA in a report. “This relatively constrained site would require connecting the new facility to the existing City Hall, which already has structural and building envelope problems.”

Additionally, the new station’s garage would have been too small to hold all of the department’s vehicles, Williams said, and it would only have been accessible by driving through the adjacent City Hall garage and rear lot. The police department already has to deal with cramped conditions in its current location on the second floor of City Hall, and no one has been eager to build a new headquarters with the same space issues.

“We’ve got terrible facilities now, and to move to something that’s much less than ideal — I was hesitant to recommend it,” Police Chief Don Johnson told The Review, citing concerns about the lack of parking and public areas in the original design. “Public space is really important for me to see in there.”

If the latest purchase moves forward, the City will own the entire northern side of the City Hall block, which will allow the new police station to be large enough to “meet all the needs of the police department,” Williams said. He also noted in his report that police vehicles will have direct access to the station garage via Third Street, and that the larger building will free up street-level space for more “active uses” such as retail, a public meeting space or even a new home for the Arts Council.

According to Williams’s report, the police department’s current location has been considered insufficient since 2001, and the search for a new location began in earnest in 2011. The options were narrowed down to two locations: the West End Building — which was owned by the City at the time — and the City Hall block downtown. Once the City decided to sell the West End Building, the City Hall block became the final location.

Williams said the sale will likely be closed sometime in the middle of May, if everything goes smoothly. He estimated that construction could begin in late 2017, assuming the City can find a new home for LexiDog by then.

“It’s certainly not finalized, but if you assume a year for design and going through the development review process — I would say probably more like 18 months to do that,” he said. “So construction could start in a year and a half. (That) would be a reasonable time frame. Late 2017, probably.”

The property at 320 A Ave. was purchased for $1.15 million, bringing the project’s total property acquisition price to $2.65 million. The addition of the new properties doubles the total area of the site to 20,000 square feet.

One point of contention has been the source of funding for the property acquisition. In February 2015, LORA voted to add both parcels to the Civic Center project, enabling money from the downtown Urban Renewal District to be used to purchase the properties. Councilor Joe Buck has long objected to that plan, saying that a new police center is not an appropriate use of urban renewal money. He raised those objections again at Tuesday’s hearing.

“I’ve been opposed to the purchase — this project in this location — throughout the process,” he said. “I think it’s the only option left on the table because all the better ones were removed.”

In an email to The Review on Wednesday, Buck said removing two properties from the tax rolls indefinitely and displacing businesses that bring traffic into downtown “is actually harming the economic vitality of the district.”

“Doing this with the very funds meant to improve economic vitality downtown is an improper and foolish use of those resources,” he said.

Councilor Jon Gustafson said he shared Buck’s concerns, but believed that the presence of the street-level public and retail space mentioned by Williams would be enough to make the project a reasonable use of urban renewal dollars. Councilor Jackie Manz also said she considered the A Avenue frontage to be “extraordinarily important.”

“I can support this,” Gustafson said, “but I sure as heck am expecting that we have a ground floor there that’s something other than a police station.”

Councilors Charles Collins and Skip O’Neill both said they supported the project because of the importance of making sure Lake Oswego has a “first-class” police station, and Councilor Jeff Gudman added that taxpayers would appreciate the source of funding.

“The benefit of using urban renewal dollars for an approved project on our list is that we are going to be able to build this without having to ask our residents for one additional dime,” he said. “And I think that’s incredibly important in these times, to be able to provide a needed public service without asking our residents for additional money.”

The final vote was 6-1, with Buck as the sole dissenting vote.

In his email to The Review, Buck stressed that he recognized the need to replace the police station currently housed in City Hall. He only objects to the new location, he said, and to the funding mechanism being used.

“No one can disagree that any new police station is an improvement over the space we have now,” he said. “My primary objection is the use of urban renewal dollars for the project and the fact that we are paying over twice the appraised value for this property while, at the same time, the council discarded better options in the past.”

Contact Anthony Macuk at 503-636-1281 ext. 108 or This email address is being protected from spambots. You need JavaScript enabled to view it..