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West End Building will go back on the market
Nick Bunick and The Great Tomorrow remain hopeful that funds for the purchase will still arrive by Dec. 1
Lake Oswego's West End Building is going back on the market.
Developer Nick Bunick and his nonprofit The Great Tomorrow told city officials Tuesday that they would not meet the Nov. 18 deadline for a second nonrefundable $200,000 down payment on the property.
Bunick had offered $20 million for the 89,000-square-foot building, which sits on 14 acres at 4101 Kruse Way, along with an additional adjacent 1.3 acres. The down payment due this week would have given him until Dec. 1 to close on the deal.
I had hoped the first initial funding wouldve come in by today the additional $200,000 so I told the city that obviously I missed todays date and Im not asking for another extension, Bunick said Tuesday.
Bunick said The Great Tomorrow still expects to receive the funds it needs from the International Monetary Fund and the World Bank to complete the purchase, even though the actual structure of that funding remains unclear: A spokeswoman for the IMF told The Review on Wednesday, "The IMF does not lend to individuals, local governments or municipalities." The organization also does not give money to nonprofits to support capital projects, the IMF said.
In the meantime, Redevelopment Director Brant Williams said the city will proceed with plans to hire a commercial real estate firm to market the WEB to other potential buyers. "After today," Williams said Tuesday, "the property will no longer be under contract."
Williams said city staff will "pick up where they left off last spring" by interviewing three real estate firms: CBRE, Cushman & Wakefield and Newmark Grubbs Knight Frank. That process will begin immediately, Williams said, and "ideally, we would have a firm selected by mid-December."
Williams called the $20 million offer from Bunick and The Great Tomorrow "a very good price. We would hope to get similar offers, especially given the improving economy."
Bunick's offer was exactly what the city paid for the building in 2006 and significantly more than the property's real market value, which the county assessor recently estimated at $11.7 million. But terms of the deal have changed multiple times, beginning last summer when Bunick missed an Aug. 12 deadline for a non-refundable, $250,000 cash deposit.
At that point, Bunick said he would double the amount of the down payment to $500,000 if the city would extend the deadline to Sept. 2. The City Council agreed. Two weeks later, Bunick asked the Council to consider a different offer. This time, he asked the city to amend his purchase-and sale-agreement so that it required a nonrefundable deposit of $200,000, and that it extend the closing date of the sale to Oct. 31.
To make that happen, the city had to authorize replacements to a line of credit to finance its $17.6 million loan on the West End Building. Finance Director Shawn Cross negotiated with the lender, Bank of America, to extend the loan agreement by 12 months, and the city cashed Bunicks check for $200,000.
When Bunick and The Great Tomorrow missed the Oct. 31 closing date, the City Council agreed once again to extend The Great Tomorrows purchase deadline this time to Dec. 1. But that extension was contingent on Bunick making a second $200,000 down payment this week, and those funds never materialized.
Bunick has said The Great Tomorrow, a multifaceted nonprofit, would establish headquarters in the WEB, with administrative offices for a child abuse resource organization; offices for a program to combat hunger and to provide education to children in Southeast Asia, primarily Laos; and the headquarters of a research group he calls the Kruseway Cancer Treatment Corporation.
Last week, he said he would also allow the city's teen center and various other city offices that currently occupy the building to remain there rent-free.
On Tuesday, Bunick said he remains hopeful about the deal.
If they want to put it on the market, thats fine, but Im still anticipating Ill be getting the $20 million between now and Dec. 1, Bunick said. When I do, Ill send them the whole balance. Ill go ahead and put it immediately in escrow.