Council sets meeting to discuss merits of public-private agreement

Troutdale Mayor Doug Daoust says the town’s city government — and the town’s residents — have encountered what amounts to a once-in-a-lifetime offer.

Local business tycoon Junki Yoshida has offered to build the city a new downtown city hall.

Junki YoshidaIn response, Daoust wants to hold a special City Council meeting Monday, Dec. 2, where councilors will consider the offer.

At last week’s Troutdale City Council meeting, councilors agreed they need more time to consider The Yoshida Group’s “Built-to-Suit” proposal to construct a new city hall where the City Conference Building now sits at the corner of Southwest Buxton Avenue and Second Street.

Yoshida, who lives along the Sandy River in Troutdale, stepped in to help the city after City Councilors decided in July that the city couldn’t afford the $28,000 a month lease proposed by Bremik Construction, which is constructing a building in the Discovery Block.

PDG Construction, a company contracted by The Yoshida Group, brought a formal proposal to Troutdale councilors Aug. 20.

Councilors were intrigued by the offer, but the city wanted to weigh its options first.

The city had asked PDG Construction about the pros and cons of demolishing the old City Hall on Kiebling Street and building a new city hall there.

Brian Lessler, president of PDG Construction, returned to the council Tuesday, Nov. 12, with the results.

Lessler said PDG architects analyzed the old City Hall site on Kiebling Street and found it would be more expensive to demolish and rebuild (with added costs of $431,000) than to move ahead with the site on Buxton Avenue.

Because of its steep topography, Lessler said the site would require additional shoring, retaining walls, excavation, concrete and paving. And it requires a more complex and costly demolition plan, he said.

Because of the higher costs, Yoshida is not interested in pursuing that option, Lessler said. Yoshida also mentioned there are efforts to preserve the building’s historic significance.

Mayor Daoust was grateful to have the site study done.

“Thank you for spending the time and energy to do that,” he said. “Your answer is something we needed to know.”

Instead, PDG offered Yoshida’s original proposal to replace the CCB building on Buxton Avenue, which the city also owns.

Lessler said a new facility, on the approximately 13,000-

square-feet site adjacent to the new police building, would centralize city services and provide opportunity to share facilities.

He said the new construction would raze the old post office building and then present “beautiful, new architectural facades to both street frontages.”

Lessler told councilors The Yoshida Group is interested in a public-private partnership with the city.

“With vast capital contributed by Yoshida, (the project) is incumbent on the city having skin in the game,” he said.

It would cost the city $300,000 for PDG to construct the building.

To get started the city would pay $15,0000 of that sum along with a letter of intent.

PDG Construction would then work with staff to begin design and space planning for the new city hall.

Once built, the city would pay $18,000 per month to lease it.

Mayor Doug Daoust was happy to hear the lease rate of $10,000 less than Bremik Construction’s previous proposal of $28,000 for a leased space in the new downtown development, which Bremik owns.

Several councilors also liked the idea, and felt it was an offer too good to pass up.

But Councilor David Ripma wasn’t ready to make a snap decision.

“We can’t possibly consider this at Council without more research,” he said. “There’s a lot to consider here.

“I’m not saying it’s a bad deal. I’m just saying I can’t tell if we can afford it,” Ripma later told The Outlook, adding, “I think its prudent that we look into it in detail and what we can afford. No matter how reasonable it is, we’re pretty stretched right now and to enter into an agreement like that, it would be binding.

“We appreciate the offer to build a city hall for us under those terms, but I don’t know if its the way we should,” he said.

PDG Construction’s proposal states that at the end of 10 years (with a five-year option), the city has the option of buying out the cost of the building for a base price of about $3.4 million.

If the city can’t afford it, The Yoshida Group would take ownership of the building.

The proposal also states the city would have to transfer control of the land, which the city now owns, to the Yoshida Group, “in order to facilitate construction and permanent financing.”

Ripma said the cost of the land is an important factor for the city to consider.

The mayor and councilors agreed a work session would be needed to figure out the city’s legal obligations and discuss the proposal.

“Do we want it and can we afford it? Those are the questions we need to answer,” said Councilor Rich Allen.

In days after the meeting, Daoust told The Outlook that Yoshida’s intentions are in the right place.

“Yoshida has no intent to build a building for himself,” Daoust said. “He definitely wants to build a city hall for the city. And he’s giving us 10 years to figure out how we’re going to purchase it. He’s going to give us a percentage — 3 percent — of what we pay every month as credit toward purchasing the building.”

Junki Yoshida was out of the country and could not be reached for comment.

Daoust plans to schedule a council meeting Monday, Dec. 2, to “discuss the letter of intent and whether we’re going to do it or not.”

The answer will determine if the city proceeds, and if so, what next steps are needed.

“We are concerned if we don’t act on this offer that it won’t be there after a while,” said Daoust. “That’s why I want to have this meeting on this decision. Are we going to move forward or not?”

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