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Six months after proposal window opens, city receives one bid and considers negotiations

SPOTLIGHT PHOTO: NICOLE THILL - The city of St. Helens issued a request for proposals to develop a 25-acre portion of waterfront property in May. To date, the city has received only one application from Tokola Properties, a Gresham-based property developer. Six months after the city of St. Helens requested proposals from developers to work on the city's waterfront redevelopment, the city has received only one bid - a proposal to construct a four-story hotel and apartment building, with ground floor commercial space.

Now, the city is in the preliminary stages of negotiations with the property management group that submitted the proposal.

In May the St. Helens City Council approved a request for proposals for potential developers to pitch ideas to the city about how to improve the city-owned waterfront property now sitting vacant along the Columbia River. The City Council initially set a deadline of June to receive bids, but after low interest in the project, the city later amended the request to remain open until satisfied.

By early August, the city received a proposal from Tokola Properties, a property management group based in Gresham.

City Administrator John Walsh said the city is negotiating agreements with Tokola, but said those discussions are in the preliminary stages.

Tokola is proposing to pursue a three-phase development on the waterfront with uses to include a 75-room, four-story boutique hotel, a building with 150 to 175 luxury market-rate apartments, several areas of ground-floor retail space attached to the apartments, and a clubhouse with amenities for residents, proposal documents indicate.

The agreement with Tokola is not a done deal, however, and details about whether or not the development company would ultimately buy the land from the city prior to development haven't been decided. Walsh said other proposals can still be submitted to the city, and said any such proposal could target only a portion of the city's 25-acre property, and not the whole thing. Both parties must agree on the terms, but Walsh said the Tokola proposal seems to be a good fit.

"There are so many variables," Walsh said of the current negotiations. "It's similar to writing a letter of intent, or when you're in the process of buying a house and it's your due diligence."

Should the Tokola proposal move forward, the first phase would focus on development of the boutique hotel, followed by the addition of housing options in the waterfront area.

"Simply put, we believe St. Helens needs more people living downtown to support local retail activity and to extend vibrancy in downtown into the evening hours," the proposal documents state.

Walsh noted that Tokola worked on a similar waterfront redevelopment project in the city of Independence, which the company outlined in its proposal. Independence purchased a 20-acre waterfront property from a former concrete facility in 2015 for $800,000. The property sits along the bank of the Willamette River and the city's historic downtown.

In 2016, the Independence City Council approved a development agreement with Tokola, which proposed a similar design concept — a 75-room boutique hotel, 120 market-rate apartments in three separate buildings, 14 town homes, and a riverside clubhouse. The first phase of development is scheduled to begin in Independence next summer.

Walsh said the striking similarity of the project was a key reason St. Helens city councilors felt comfortable considering the proposal, not to mention the limited number of proposals received. Tokola's portfolio and experience working on similar projects increased the council's confidence in the development agency, Walsh said.

"(The City Council) had a long conversation about that, about the appearance of lack of competition, but their business model is attractive to the city," Walsh said, referencing the developers' philosophy of retaining developed property after work has been completed.

Tokola has also worked on projects in Hillsboro, Gresham, Forest Grove, Eugene, Newberg, Portland, and North Bend.

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