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Lake Oswego City Council directs developer to come back in January with updated design sketches

STURGEON Developer Vanessa Sturgeon told city councilors acting as the Lake Oswego Redevelopment Agency last week that plans for the development of the North Anchor project have changed once again.

The original concept for the North Anchor called for a boutique hotel and an apartment complex to be built on a row of properties along B Avenue, between State Street and the alley between First and Second streets. The City bought the downtown properties and has been working with Sturgeon Development Partners (SDP) for the past two years on a sale-and-redevelopment agreement.

But according to Sturgeon, a new hotel study on the project found that the 90 rooms proposed for the boutique hotel would be insufficient to meet demand. As a result, she said, she'd like to build a larger hotel.

"We're looking at a new approach, using the entirety of the block down to State Street for one larger hotel," Sturgeon said. "We're in the process of redesigning that opportunity. We're also in conversations with the City about eliminating the underground parking garage and using the adjacent site — the smaller of the two where the Arts Council is located — for a parking structure to include retail in the base."

Sturgeon was accompanied by George Schweitzer, one of her consultants on the project and managing director at the Benson Hotel. Schweitzer told the council he believes the new study is correct in assuming that the limited supply of hotel rooms in the area would allow the North Anchor development to fill the demand.

"In the downtown core, there's just the Lakeshore Inn, and when you look at product in close proximity to the city center, there's definitely room to bring in a facility as being proposed," Schweitzer said. "What we're talking about is an upscale facility more in the luxury boutique range. The demand is sufficiently there to meet those expectations."

According to Sturgeon, the new plan for the hotel would raise the number of rooms from 90 to 120 and needs to be redrawn. Sturgeon also indicated that there is interest from hotel operators as well as investors for a project like the one she's proposing. But given the projected returns on the project, she said, SDP might be interested in building the project itself.

"We didn't want to start that until we had this conversation today and gauged your interest," Sturgeon told the council. "It will take about six months to get the architectural drawings done and submitted. Then the question is how long will it take the City to move the project through the process. The construction process is 21 months from groundbreaking."

Sturgeon said she's reluctant to move forward and pay for updated design drafts if the council wasn't able to commit to the project. But the council wasn't so keen on waiting another six months to see design specifications on the retooled project, given all the time that it's taken to get to this point.

Councilor Theresa Kohlhoff told Sturgeon she wasn't sure she could approve moving forward with the limited amount of information on the table regarding the project. Councilor John LaMotte also expressed concern over the timeline.

"I'm having trouble with this as far as timing. We've got a great piece of property, and a downtown that needs new development. People ask me every day when North Anchor is going to happen. And we have nothing to show," LaMotte said. "You're sticking your neck out, but we've been sticking our neck out for almost three years."

Councilor Jeff Gudman reminded the council and Sturgeon that the project has many off-ramps or exit points over the next few months and that they should wait to see the new design drafts before making that decision.

Councilor Skip O'Neill pointed out that Sturgeon is the only developer who has come to the plate on North Anchor. He put forth a motion for Sturgeon to come back to the Council with revised design drafts at the council's second meeting in January, with plans for full submittal of those designs in six months.

The Council approved that motion unanimously.

Also on the agenda

The City Council awarded a $3.4 million professional services contract for the Boones Ferry Road project to Otak Inc. that covers coordination between the City and contractors, construction contract adminstration, work zone monitoring and inspection, as well as public information and involvement support services.

Due to the size and nature of the project, City staff felt it pertinent to contract for construction management services. A selection committee evaluated and scored three proposals before offering the job to Otak for both pre-construction and construction phases.

The Boones Ferry Road project recently received approval to pursue an alternate bidding process for construction contracts. The project is expected to go out to bid in early 2019.

Contact Lake Oswego Review reporter Sam Stites at 503-479-2375 or This email address is being protected from spambots. You need JavaScript enabled to view it..


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