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Too many 'maybes' kill 39-acre parcel project off Highway 99W with a large chunk of land near Home Depot.

COURTESY PHOTO: CITY OF SHERWOOD - Deacon Development was interested in developing 39 acres of Sherwood land into commercial and office space. However, Metro would have had to agree to bring the land into the urban growth boundary, a request that isnt always successful, according to one city official.Worried about its chances of getting approval from all the government agencies involved to build commercial and office property on both sides of Highway 99W (including property near The Home Depot), a local development company opted to pull the plug on a proposed Sherwood project.

At issue was a 39-acre parcel that Deacon Development LLC had expressed interest in. The land currently is in the urban reserve area and would have had to have been moved into the urban growth boundary by Metro and then annexed into the city before any development could have occurred.

Pete Snook, development director for Deacon, said on Jan. 5 that the developer did a good job in trying to understand what the total costs were, "however, the costs that we would have to agree to pay upfront, before we had an answer from all the proper governmental entities was too much on this particular project."

He said that decision was made the last week of December and forwarded to city officials a short time later.

The property in question was part of the Sherwood North Concept Plan, a long-range guide for the development of the area, a plan that Deacon Development had put together and was ready to send to the City Council in the form of a resolution before being sent to Metro for consideration.

Snook said since the property was outside the city limits, everything from constructing a roadway to reach Highway 99W to hooking up a sewer or water system still had to be worked out. In the end, there were too many "maybes" from some of the agencies involved, he said.

"It's just one of those things — this doesn't happen to us very frequently — but it's also the first time we've attempted one that was outside the city limits," Snook said. "When the cost is high and the probability is low, you just have to say, 'I can't go forward with it.' That's where this project fell."

The Sherwood North urban reserve is composed of three sections known as the west, middle and south subareas. However, it's a portion of the middle subarea that Deacon Development was interested in, Steve Faust, community planning director at 3J Consulting, told a joint meeting of the Sherwood City Council and the Sherwood Planning Commission in December.

"The 100-year floodplain forms the western, northern and eastern boundaries of the concept plan area, and outside of our area, in that floodplain, is … the Tualatin River National Wildlife Refuge," Faust said.

He said the 39 acres included a 12-acre western section that would have been earmarked for commercial and office space and a 27-acre general commercial section in the eastern section.

Todd Chase of FCS Group, part of the consulting team, said he expected that the 27 acres would be used to construct anywhere from 150,000 to 165,000 square feet of commercial space, which could house as many as three anchor tenants to meet "near-term demand." That could happen within the next five years, based on the market, Chase had said.

The 12-acre western section could accommodate 100,000 to 150,000 square feet for two- to four-story buildings for professional services, retail showrooms and other ventures, he said.

"Nothing has been pinned down," Chase said at the time. "We are growing faster than the nation on average in the Northwest. There is more demand in suburban areas than in more dense urban areas as a result of the COVID pandemic."

Chase told Sherwood officials that if the plan went forward, the city could expect new tax revenue, believing that at buildout the property could have been worth more than $100 million in assessed value, producing about $300,000 per year that would go into the city's general fund.

Despite walking away from the recent project, Deacon has had other successes in the city, having built Cedar Creek Plaza along Highway 99W several years ago, a complex that includes an IHOP restaurant, a Starbucks, Mud Bay, Planet Fitness and more.


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