Beaverton signs exclusive agreement with developer for Westgate property, arts and culture center

Beaverton has found the companies it wants to partner with to develop the former Westgate Theatre site and the future arts and culture center in the city's downtown.

In a four to one vote, city councilors approved an Exclusive Negotiation Agreement with Gerding Edlen and Rembold Properties on June 9. The two Portland real estate investors/developers teamed up for a single proposal to the city.

They were among three companies that submitted ideas for the Westgate/Creekside redevelopment and the only one to include a hotel and a proposal for the arts and culture center along with apartments and retail. The other two, Hines, based in Houston, Texas, and CRES, of Portland, focused on apartments and retail.

"This is momentous for the city," said Mark Fagin, council president. 

Gerding Edlen/Rembold is proposing four, four-story buildings. Two will have retail on the bottom floor with market-rate apartments on the upper floors, totaling 212 units. A high-end hotel with 144 rooms and a restaurant would fill another building. North of The Round, the team has proposed a parking structure and a 40,000 square foot arts and culture center.

The Exclusive Negotiation Agreement between the city and real estate developers will last six months, during which the two will determine if a more permanent private/public partnership is in the future, said Cadence Moylan, Community Development, development division manager.

She compared it to preparing for marriage with a strong pre-nup agreement. 

"We want to make sure our interests align," Moylan said before the meeting. "Do we really have a shared vision?"

If the partnership works out, construction on the retail and housing could start in about two years, Moylan estimated. A timeline on the arts and culture center depends on the city council voting in favor of building and operating the facility in addition to fundraising and financing.

While the council members expressed their excitement for the big step in downtown redevelopment, a few raised some concerns. 

Betty Bode and Lacey Beaty criticized the Community Development Department for redacting information in two of the three developers' proposals, including Gerding Edlen/Rembold, that related to the companies' financial dealings.

Bode, who was the sole vote against the Exclusive Negotiation Agreement, was clearly angry about the redaction, saying the decision affects finances and where people live and the council must have all relevant information.

"I hope we never get redacted material, ever," said the veteran councilor. "I find this the most insulting moment in my time in the city."     

Bode and Beaty also questioned the potential success of a hotel on the site. Bode said she would be surprised if a hotel would locate there given the traffic congestion that surrounds the area. 

The city bought the 4-acre Westgate property in 2005 for $4.9 million and entered a partnership with Metro, which paid Beaverton $2 million to become a joint-owner. The property is between Southwest Rose Biggi Drive and Southwest Cedar Hills Boulevard, adjacent to The Round.

The city has spent a decade trying to get an arts and culture center and has made great inroads this year, including a business plan that puts the estimated cost at $46.5 million.

The Gerding Edlen/Rembold proposal says Gerding Edlen will focus on "financing and development of the proposed city-owned parking garage and Beaverton Arts and Culture Center." The company has worked with Beaverton previously. Rembold, which is already working in a private/public partnership with Beaverton on multi-family housing, will focus on that aspect of the Westgate development.

During the first six months, among other things, the partners will determine the exact location of the project, whether or not a hotel will come and who will bring it, parking, and decide if the city wants to build and operate an arts and culture center. If the city agrees to a six-month extension, the partners will further refine that work, Moylan said. 

The city would eventually sell the Westgate property to the developers, but not until it was certain the development would meet all the agreed upon requirements, Moylan said. The city would retain the arts and culture center and would own and operate it with an advisory board, if the council agrees to that plan.

The city's Creekside District Master Plan identified Westgate as a catalytic site, meaning that its development could encourage other redevelopment activity in the area, Moylan said. 

 "When those buildings go up, and that Westgate site is developed and this is an active, vibrant area we can go 'wow.'" Fagin said. But he added it's going to take time and patience until then.

By Wendy Owen | The Oregonian/OregonLive

http://www.oregonlive.com/beaverton/index.ssf/2015/06/beaverton_signs_exclusive_agre.html