Restaurant owners considered closing doors for good due to delays and other setbacks

by: TYLER FRANCKE | WOODBURN INDEPENDENT - The new location of the KFC restaurant in Woodburn is seen, as workers with a Salem-based contractor toil on part of the Interstate 5 Interchange Project in the foreground.After the months of delays, setbacks and bills started to pile up, the owners of the KFC restaurant in Woodburn nearly decided to close their doors for good.

“For a while, we really didn’t know if we were going to have to just walk away from the project and not rebuild here,” admitted Katie Roberts, marketing director for the restaurant and daughter of the owners, Fred and Lisa Jackson, who purchased the Woodburn store in 1993.

The Jacksons, who also own three other KFCs — all of them in Oregon — through their company, Graja Inc., had to vacate their former premises last June in conjunction with the Oregon Department of Transportation’s Woodburn Interchange Project.

The location of the previous restaurant lay directly in the path of the expanded roadway for Highway 214.

“It would have been coming through our lobby,” Roberts said.

The two main difficulties the Jacksons faced at the time was, No. 1, they didn’t own the building they were vacating. As lessees, they were potentially entitled to relocation and moving expenses, but their compensation was far less than it might have been if they owned the property.

Roberts declined to discuss specific figures, but she acknowledged that the compensation offered by ODOT was only “a small fraction” of their total expenses related to the move.

To avoid such a situation in the future, Roberts said Graja purchased the land and built the new location on 214, which is adjacent to the former site. But at the time they had to move out, the Jacksons had yet to secure the construction loan.

The second and related difficulty was that the restaurant moved out to make way for the interchange construction, it did not have a new location to move into.

Roberts said her folks knew the interchange was coming, but the timeline was not entirely clear. They had been scouting locations for years, but were reluctant to lease a deal without knowing exactly when they’d need to vacate the old location.

“We couldn’t really find a new building without paying two leases,” she said. “It was a juggling act.”

She said the restaurant learned of the June 15, 2014, deadline just a few months in advance. Due to construction delays (most of them weather-related) and other setbacks, KFC’s new location didn’t open until early April, meaning the restaurant was out of business more than nine months.

Roberts said the eatery’s staff of 25 had to be laid off in the interim, and the majority of them have since sought employment elsewhere. She would not disclose figures related to the lost revenue over this period, but she did say Graja had to continue paying monthly royalty fees in order to keep its franchise status.

“We still had bills going out with no money coming in,” she said. “It was getting to the point where we were really wondering if the company was going to make it. It was very stressful.”

She said ODOT policy does not permit the agency to reimburse companies for lost revenue stemming from a move. And while she said she and her parents worked with a number of good representatives and have no desire to disparage the agency, overall, they felt like their concerns and interests weren’t being fully taken into account.

The process “had some flaws,” she said.

“We felt like we were just a building that had to be moved,” Roberts said. “For us, it was personal. We had a whole crew depending on us. But for ODOT, it was like we were just in the way.”

In response to the situation, ODOT spokesman Lou Torres said that right-of-way (ROW) negotiations for the majority of properties take 12 to 16 months, but it often feels like less time to the displaced property owners.

“While the surveying, appraisals and negotiations can take months, the timing and deadlines for relocating and actually moving can feel rushed at the end of the process,” he said.

He said there is usually a similar perception when it comes to financial compensation.

“Negotiations to purchase properties can be difficult and contentious,” he said. “The vast majority of property owners who are compensated almost always feel that their property is worth more and should have received greater compensation.”

However, he noted, that such negotiations are governed by state and federal laws, which require ODOT to pay property owners fair market value for their land, based on independent appraisals.

“We can also compensate the property owner for moving and relocation expenses,” he said. “In this case, KFC received a full range of compensation. We believe that we negotiated a fair settlement and that the property owner received what he or she is entitled to.”

The KFC was one of 27 commercial properties whose rights of way ODOT needed to acquire for the interchange project. When it’s all said and done, the agency will have spent between $21 million and $22 million, Torres said.

Despite the challenges, both parties were in agreement on at least one point: being glad that KFC was able to remain a viable part of the Woodburn community. In its first two weeks of reopening, the Woodburn location was in the top three of sales for all Oregon KFCs, Roberts said.

“The welcome back by the community has just been amazing,” she said. “That’s what we’re trying to focus on: We are open, we have a great location now, and we’re glad to still be in Woodburn.”

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