LOPD will share a building that will be located next door to the current downtown structure

Lake Oswego's new City Hall will be located on the corner of A Avenue and Third Street and the police department will share the building with other government offices, just as it does now.

That's the decision city councilors made Tuesday in their role as the Lake Oswego Redevelopment Agency board, opting during a study session to locate the new building directly east of the current City Hall.

Some questions still remain, however, about what will happen to the western side of the block.

The project was originally conceived as a new police station to replace the LOPD's current cramped headquarters on the second floor of City Hall. The City acquired two properties directly east of City Hall for the new building in 2015, and hired the design firm Mackenzie to begin architectural work.

But before the project advanced very far, a separate report revealed that a host of deferred maintenance issues within the existing City Hall building were more substantial than originally thought, and the cost of full repairs was estimated to be almost as high as the cost of constructing a new building.

In response, the council voted to pursue the construction of a new City Hall, and the project was folded into the police station project in order to ensure that the two buildings would complement each other. Over the course of the following year of design work, the plans merged into a single, two-story structure that would be located along the entire north side of the block.

Armed with a clear picture of what the new building would look like, Mackenzie and City staff brought on contractors DAY CPM and Howard S. Wright to provide a more detailed cost estimate for the project. But when the results came back, the price tag had risen to approximately $64 million.

The LORA board had already voted to fund the project using only money from the downtown urban renewal district, which has approximately $40 million left to spend, so the new $64 million price tag made the envisioned building a non-starter.

City staff reported the setback to the council in April and presented a brief overview of a few cheaper alternatives. This week's meeting was a chance for the LORA board to get a more complete report about each option and make a final choice.

Deputy City Manager Jordan Wheeler said City staff and Mackenzie will begin design work immediately on the council's preferred configuration, with a goal of breaking ground in the summer of 2019.

On Tuesday, councilors were offered three options:

Option "A-west" would be to tear down the existing City Hall and build a slightly larger replacement on the same site;

Option "A-east" — the one that was eventually chosen — would be to build a new City Hall on the eastern property; and

Option "B" would be to go back to the original idea of building only a police station on the eastern property and renovating the current City Hall where it stands.

The advantage of options A-east or B would be that City staff or police could keep using the current City Hall while the new building is under construction and then move directly into it. Both options penciled out to approximately $40 million.

Option A-west would cost an estimated $50 million, due in part to the added expense of relocating staff to a temporary facility while the new City Hall is being built.

But both of the cheaper options have downsides, too.

The needed renovations on the old City Hall are so extensive that staff would have to move out during construction, so option B carries relocation costs as well. Plus, no amount of rehabilitation can bring the old City Hall up to modern standards for seismic resiliency, whereas a new building would be built to modern codes for earthquake resistance.

The City doesn't own the property behind the eastern side of the site, so option A-east would require the City to continue using the existing ground-level parking lot on the southwest corner of the block, creating an awkward crossing between the two halves of the block and limiting the potential of the western half to be repurposed or redeveloped.

Councilor John LaMotte initially pushed for option A-west, arguing that the $10 million price difference between options A-east and A-west was misleading. A-east is only cheaper because it ignores the parking problem, he said, and the City would ultimately have to pay to solve the problem if it decided to sell or redevelop the western half of the block.

"We either pay it now or we pay it later down the road, and we'll get caught up in a complicated crazy scheme with the developer," he said.

Councilor Theresa Kohlhoff agreed and said that by insisting on the $40 million price limit, the board was pushing the City toward the A-east design, which would not be the best use of the block.

But Councilor Skip O'Neill said the council shouldn't plan on selling the western half of the block, because the need to retain City parking would make the site unappealing to any potential developer. The block only has value to the City, he said, so the council should just treat it as a City asset.

Mayor Kent Studebaker and Councilor Jackie Manz both agreed, and said they would support option A-east. Councilor Jeff Gudman initially expressed support for option B, but ultimately said he also would be willing to support A-east with the assumption that the City won't try to sell the western part of the property.

Studebaker moved that the group select option A-east. Manz, O'Neill and Gudman joined him in voting for it. Kohlhoff, LaMotte and Councilor Joe Buck voted no.

Buck said he was opposed to option B because he didn't think the old City Hall was worth rehabilitating, but said he was reluctant to vote for either version of option A because there were too many unanswered questions about what would happen to the block overall.

City Manager Scott Lazenby suggested that the council try to reach a stronger consensus about how to proceed, given the scale of the decision being made. At his suggestion, the council directed staff to begin moving forward on option A-east, but to look into some of the issues about the overall block design and explore possibilities for how to improve the western half of the block without exceeding the $40 million budget.

Contact Lake Oswego Review reporter Anthony Macuk at 503-636-1281 or This email address is being protected from spambots. You need JavaScript enabled to view it..

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