City council sends proposal back to planning commission

by: REVIEW FILE PHOTO - The city hopes to sell the West End Building on Kruse Way to a private developer, but the deal hinges on rezoning the site from office campus to general commercial. Planning commissioners will consider that idea for a second time in March.The Lake Oswego City Council is punting plans for the controversial West End Building back for a second shot with the planning commission in hopes that more information will lead the board to change its mind about the proposal.

Near the end of last year, the commission rejected the city’s own proposal to rezone the WEB property, at 4101 Kruse Way, from office campus to general commercial. The rezoning is a key element in a deal the city has with a private developer aiming to buy the property, long considered a poor public investment and an ongoing drain on tax dollars.

But planning commissioners found the prospective developer, Kensington Investment Group, hadn’t demonstrated there was a public need for more commercial space in the city, especially with the Kruse Village retail center being developed nearby. Without a specific plan for the 14-acre WEB site, it was difficult to determine whether the future development would be compatible with adjacent properties or cause traffic problems, they said.

Council members could have upheld or overturned the denial. Instead, they voted unanimously this week to remand it to the planning commission after Kensington’s Bob and Robert Jensen agreed to provide some more detailed information about their plans.

“The proposal, without telling us more about what’s going to happen, is not acceptable,” Councilor Jeff Gudman said Tuesday, stressing that any new information should be vetted by planning commissioners. “The planning commission is where these things are normally worked out.”

The proposed zone change would allow for automobile sales and repair facilities, restaurants with drive-thrus, car washes, light manufacturing, hotels and grocery stores larger than 25,000 square feet. It would also allow for an additional 41 housing units, according to the city.

To date, Kensington representatives have offered some general notions of what might happen on the property — ideas include building multifamily housing on part of the site and a gym or specialty food store closer to the main road — but they haven’t publicized a concrete plan.

Councilor Jon Gustafson expressed reservations about giving the proposal a second chance.

“I don’t think you go back to the planning commission for second chances because you didn’t make your case fully the first time,” Gustafson said. “That being said, I do think the community deserves more information on this proposal.”

Councilor Donna Jordan said the proposal may have just needed more time to fully develop.

“If this is going to happen, it would be better that it have a little bit more time to maybe meld the stew and season it a little bit more, and give everybody an opportunity to see what’s coming,” Jordan said.

Councilor Lauren Hughes said she hopes the planning commission will benefit from more background information this time around.

“But it is a huge question mark to everybody in the community why someone would pay over $16 million for a property and then be so unsure about what they’re going to do with it,” Hughes said.

Kensington Investment Group has agreed to pay $16.5 million for the property, which the city bought from Safeco Insurance for $20 million in 2006.

The WEB’s value plummeted soon after its purchase, and plans for building a community center there never came to fruition.

The city government has long considered selling the site in hopes of cutting its losses and returning the property to tax rolls. The city now spends about $1.5 million annually on loan payments, maintenance and operating costs at the WEB. Meanwhile, the water partnership offices and parks and recreation activities now housed in the building are unable to fully utilize the available space.

The planning commission is set to reconsider the rezoning proposal March 10.

In other business Tuesday, the council directed Finance Director Ursula Euler to move the city toward a monthly utility billing system in hopes of improving water conservation efforts and making residents’ high costs easier to swallow. The city now bills on a bimonthly basis.

Background reading:

West End Building sale, zone change remain in limbo; council approves extension to agreement with Kensington Investment,” Jan. 16, 2014

Future of West End Building remains unclear; planning commission rejects zone change,” Dec. 5, 2013

Council votes to sell West End Building; deal hinges on zone change,” Oct. 10, 2013

Council delays vote on selling the West End Building; concerns remain about future needs, zoning change,” Sept. 26, 2013

City considers selling West End Building for $16.5 million; property's long-term fate unknown,” Sept. 13, 2013

Kara Hansen can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. and 503-636-1281, ext. 107. Follow her on Twitter, @LOreporter.

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