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Hotel still in the works, but developer pushing for office space instead of apartments on half of downtown LO project

STURGEONDeveloper Vanessa Sturgeon told the Lake Oswego City Council last week that she believes the North Anchor project will have to be broken into two phases — one for a boutique hotel on the western half of the property and the other for either apartments or an office building.

"I think we're going to have to," Sturgeon said in response to a question from Mayor Kent Studebaker. "I think that's the only way to make it work."

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.

According to designs developed by SDP, the hotel was to be located on the corner of B Avenue and State Street. The apartments — linked by a skybridge — were to be situated on both sides of First Street.

But last month, SDP told the City that the residential portion of the project is no longer financially viable, due in part to the high cost of constructing the underground parking that would be needed to serve the site.

SDP said the hotel portion of the project is still viable, though, and the company requested that it be split off into a separate project while an alternative design is developed for the remainder of the site.

"We imagine we'd be moving forward on the hotel portion of the project sooner," Sturgeon told councilors in June.

As part of the split into two projects, SDP asked to move the hotel to the west side of First Street and leave the block between First and State streets for the second half of the project. Sturgeon reiterated those requests last week, and said the hotel's proposed design has remained largely unchanged, aside from the adjustments necessary to fit it onto the west side of First Street.

The only other change might be slightly fewer underground parking spaces, she said, due to the increased popularity of services like Uber and Lyft in the time since the project began development.

Sturgeon said SDP has been looking into the possibility of developing the eastern half of the North Anchor site as an office building, possibly as the headquarters for a specific company. But she said discussions with the unnamed company are still ongoing.

In a memo to the Lake Oswego Redevelopment Agency board last month, City Manager Scott Lazenby noted that one of the board's potential courses of action could be to approve the solo hotel development with SDP but seek a new partner for the eastern half of the site. Councilor Joe Buck raised that idea at last week's meeting, and asked Sturgeon if she would be amenable to re-drafting the North Anchor agreement to release SDP from developing the east side.

Sturgeon replied that she was open to the idea, albeit reluctantly. The two sides have a symbiotic relationship, she said, and she wanted SDP to finish exploring the possible office or company headquarters plan.

"That said, I'm not going to continue to drag along on this project and let it sit fallow," she added. "I know when it's time to cut the cord. We're not there yet, but I'm in constant contact with Scott (Lazenby), and if we get to that point, I will not be hesitant to bring that to your attention."

Councilor John LaMotte said he supported the idea of splitting off the hotel project, and he asked Sturgeon how much longer the discussion process would take for the office or headquarters plan. Sturgeon replied that she expected it would not take longer than 45 days.

Sturgeon also said that if the hotel is split off from the rest of the North Anchor, she expected the hotel portion of the project to be ready to enter the City's design review process in approximately six months, hopefully by the end of 2018.

The LORA board did not make any specific decision about the issue at last week's meeting, and Lazenby told The Review the councilors are still waiting for more information.

Also at the council meeting

• City staff asked councilors to weigh in on the possibility of a ban on plastic bags at retail stores in Lake Oswego. The specific rules of the ban would be developed by the City in consultation with the Sustainability Advisory Board and major local retailers. In a unanimous unofficial vote, the council directed staff to continue exploring the idea.

• During the "information from council" portion of the meeting, Councilor Theresa Kohlhoff read a statement in opposition to the recent Trump administration policy of separating children from their parents when undocumented families cross the southern U.S. border. The acute stress a child suffers upon separation from their parents can have profound impacts on the child's underlying development, she said, and the separation policy will cause stress and harm without good cause.

"I condemn this vileness," she said.

Kohlhoff was speaking solely on her own behalf; the Lake Oswego City Council has a long0standing policy to refrain from officially endorsing or condemning any national political candidate, policy or issue.

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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