Property's long-term fate unknown
The city of Lake Oswego plans to sell the beleaguered West End Building for $16.5 million to an investment company based in California.
The city council will hold a public hearing at 7 p.m. Sept. 24 on the proposed agreement with Kensington Investment Group, which is based in the San Francisco area but has an Oregon office in Sherwood. Approval could end years of debate over the future of the property, which plummeted in value soon after the city bought it in 2006.
In a news release issued today, Mayor Kent Studebaker said the council is eager to fulfill its promise to resolve the issue of the West End Building.
We are interested in hearing citizens thoughts about this proposal, which would return the property to an active private use and benefit the citys budget by reducing financing costs and restoring property tax revenues, he said. Public input will be accepted at the meeting.
The pending agreement follows years of upheaval over what to do with the 89,000-square-foot office building at 4101 Kruse Way. The sale would be contingent on the city approving a zone change from office campus and high-density residential use to general commercial use by April 1.
The city bought the West End Building, or the WEB, from Safeco Insurance for $20 million in July 2006 in hopes of using it for a community center that never came to fruition.
Officials scrapped plans for a community center when the economy went sour soon after the purchase, and the propertys value plummeted below what the city paid for it. The city is still paying off debt from buying the building, which now houses parks and recreation offices and other city departments that dont operate out of city hall downtown.
Clackamas County lists the propertys assessed value as about $10.7 million.
Some have maintained hopes that the site could eventually still offer a place for active recreation such as an indoor swimming pool. Others have advocated for building a new public safety facility on part of the 14-acre site, while some community members have aspired to move or build a new public library there.
But in 2008, voters rejected a bond measure aiming to provide permanent financing for the purchase. In 2011, the council again considered going to voters but dropped that plan after a community survey showed citizens likely wouldnt agree to pay for anything new at the site.
The WEB now houses parks and recreation offices and other city departments that dont operate out of city hall downtown.
City Manager Scott Lazenby said council members have discussed the potential deal in closed sessions in recent months but havent yet made a commitment.
The city will likely lease the building from Kensington for an unspecified period of time while deciding where to move the various departments now operating out of the WEB.
Were exploring alternatives now, but it will certainly take time to figure out where were going to put the activities happening there, Lazenby said.
Its unclear what Kensington will do with the property in the long run or whether it will demolish or keep the existing office building.
The building is set up to be a single-tenant, a sort of corporate headquarters; it really isnt set up for multiple tenants, Lazenby said. Whether it can be repurposed, we really dont know.
He said details of the possible sale, including how much debt remains from the purchase, how much property tax revenue could result from bringing it back on the tax rolls and various pros and cons such as offering city services on both the east and west sides of town, will be available before the council meeting.
Kensington Investment Group and its affiliates specialize in sourcing, repositioning and managing hospitality, multifamily and commercial real estate investments, according to the city. The firm offers services that include design, development, asset management and property management and owns a portfolio of hospitality, multifamily and commercial properties valued at more than $100 million.
The purchase of the West End Building provides a great opportunity to return the property to the private sector so that it can be utilized to its highest and best use, Robert Jensen, a principal at Kensington Investment Group, said in a public announcement. Were excited that this will bring new opportunities and amenities to the Lake Oswego community while simultaneously adding value to the citys tax base.
Speaking by phone Friday, Jensen added that the firm is a family company that has been investing in Oregon for at least the past 35 years.
An affiliated company owns the property where Stanfords is located on Kruse Oaks Boulevard.
We love the community, we love the market its a great neighborhood for obvious reasons, Jensen said.
He said plans arent yet developed for how the company might use the West End Building property.
We have some plans and ideas were working on, Jensen said, but its probably too early to say.