City sends out 'requests for expressions of interest' for Butler Property on First Street

SUSAN BRANNON - The city of Newberg is seeking a contractor to develop the Butler Property on First Street.

The city of Newberg has taken a new tack in finding a buyer for the Butler property located across First Street from city hall, releasing a request for expressions of interest (REOI) that includes a colorful brochure of the property, city goals and information about the surrounding area.

The Butler property was formerly a car dealership and underwent a brownfield clean-up. Now the grassy square is home to the Newberg farmers market.

The purpose of the REOI is to suggest a valuation range that a buyer is willing to pay for a property. In this case, the city is seeking those who may be interested in developing the 10,300-square-foot property. An REOI is normally a pre-project development phase to assess interest and to gather information about potential buyers.

The request helps to separate potential buyers into a more realistic list of qualified buyers that may be a good fit for the seller. Potential buyers can respond in order to engage in further conversation and get an idea as to value, which can be weighed against the sellers' expectations.

The city is searching for buyers that will develop the property, which carries a mixed-use zoning designation that allows for a variety of commercial and residential uses while emphasizing dense urban development. The city's brochure explains how the property fits into the vision for downtown Newberg.

"The offering is intended to be flexible," the REOI states. "The city is not seeking a detailed proposal at this time, although it will not reject any specific proposals that developers or others may seek to put forward for the property. Rather, the city primarily seeks expressions of interest from developers, business owners, or others who may have ideas for the property. The city intends to select a proposal and enter into exclusive negotiations."

City officials say they would like to see a retail project that would draw more customers into the downtown area and include housing above the ground floor, but is open to a broad range of ideas and means of purchase, including a land sale, ground lease or lease with option to purchase.

The document states that the city welcomes a broad set of intentions on the part of the developer as long as they can prove a track record with other similar projects. Restaurants and brewpubs that provide activities in the evening were identified as desirable, as was new residential development.

The city suggests several options for potential developers and/or buyers, including selling the property to a developer team, either for cash at fair market value or a contract purchase; or entering into a long-term lease agreement that might include an option to purchase or even participating in the project.

"However, the city has limited financial resources available for this project," the REOI states. "The city will be more likely to select the developer team whose proposal requires no financial commitment on the part of the city compared to other proposals, all things being equal."

The REOI lists several existing and future programs and assistance that the city is willing to consider. Those programs include vertical housing tax abatement, which began in 2003 under the Oregon Economic and Community Development Department, known as Business Oregon. The program encourages mixed-use commercial and residential developments and offers a partial property tax exemption.

The city conducted a pre-submittal meeting June 25, giving interested parties a chance to meet at city hall. Future meetings will include a tour of the property and the general area, a project overview and discussions on goals, expectations and potential partnership arrangements.

Reponses are due to the Community Development Department at 414 E. First Street, no later than 4 p.m. Aug. 15.

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