Agenda Item - 2024-12-03 - Number 15.1 - Approval of LORA Meeting Minutes 15.1
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Subject: Approval of Lake Oswego Redevelopment Agency (LORA) Board Meeting Minutes
Meeting Date: December 3, 2024 Staff Member: Kari Linder, Recording Secretary
Report Date: November 26, 2024 Department: City Manager's Office
Action Required Advisory Board/Commission Recommendation
❑X Motion ❑ Approval
❑ Public Hearing ❑ Denial
❑ Ordinance ❑ None Forwarded
❑ Resolution ❑X Not Applicable
❑ Information Only Comments:
❑ Board Direction
❑X Consent Agenda
Staff Recommendation: Approve minutes as written.
Recommended Language for Motion: Move to approve the LORA meeting minutes as
written.
Project/ Issue Relates To:
Issue before Board (Highlight Policy Question):
❑Council Goals/Priorities ❑Adopted Master Plan(s) ❑X Not Applicable
ATTACHMENTS
1. October 15, 2024, Draft Regular LORA Meeting Minutes
Respect. Excel'er.re Trust. Se-vim
503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY
ATTACHMENT 1
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LAKE OSWEGO REDEVELOPMENT AGENCY MEETING
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1. CALL TO ORDER, REDEVELOPMENT AGENCY (LORA)
Chair Buck called the regular Lake Oswego Redevelopment Agency (LORA) meeting to
order at 3:02 p.m. on Tuesday, October 15, 2024. The meeting was held both virtually via
video conferencing and in-person in the Council Chamber at City Hall, 380 A Avenue.
2. ROLL CALL
Present: Chair Buck and Board Members Corrigan, Afghan, Wendland, Verdick,
Mboup. Board Member Rapf was Excused.
Staff Present: Martha Bennett, Executive Director; Ellen Osoinach, LORA Counsel; Kari
Linder, Recording Secretary; Sidaro Sin, Redevelopment Manager
Others Present: Eric Cress, Principal and President, Urban Development Partners; Kurtis
Fusaro, Senior Development Manager, Urban Development Partners; Will
Naito, Naito Development LLC
3. PLEDGE OF ALLEGIANCE
Chair Buck led the Board in the Pledge of Allegiance.
4. BOARD BUSINESS
4.1 North Anchor Project Update.
Mr. Sin advised the Board about upcoming work at the gas station site on State Street over the
next four to six months. The Department of Environmental Quality (DEQ) had directed the City to
decommission three underground storage tanks on site: two 6,000-gallon tanks and one 15,000-
gallon tank,which had been under temporary closure permit since the City purchased the property
in 2005. Decommissioning would involve conducting a study with test pits around the tanks to
check for leaks, cleaning the tank interiors, and filling them with water rather than concrete slurry.
This water-filling approach, approved by DEQ, would make it easier for Urban Development
Partners (UD+P) to remove the tanks during future demolition work.
Redevelopment Agency Meeting Minutes Page 1 of 3
October 15, 2024
Mr. Cress reviewed the Board report via PowerPoint, reviewing changes to capital markets that
could impact the project's financing.
Mr. Fusaro continued the presentation with an update of UD+P's work with DEQ regarding the
prospective purchaser agreement and environmental issues for Parcel C, which formerly housed
a gas station and dry cleaner. The presentation also reviewed extended land use approvals and
residential permits and noted that UD+P planned to resubmit the permit for the hotel due to
changes in code.
Mr. Naito resumed the presentation, reviewing five major hotel franchisors and the potential to
incorporate soft brands/hotel collection into the project, summarizing operational advantages for
hotel management and enhanced credibility a soft brand partnership would give project financing.
Hotel franchisors had expressed interest, and the terms outlined by franchisors were favorable.
Naito Development was undergoing an internal process to determine whether to flat the property.
Mr. Cress added the hotel franchise process would be wrapped up when the last term sheet was
received. There was an additional expense with soft brands and the partners had to weigh
whether the additional financing attraction would outweigh the expense.
Mr. Fusaro continued the presentation with an overview of the schedule for the next 12 months,
noting the team hoped to begin a deep financing outreach for both equity and debt after
November's election. In the beginning of the New Yeah, UD+P would go back in to resume the
permitting process and hoped to start construction in the middle of the following year.
Mr. Cress added the partners would continue to work on negotiating the soft brand over the next
few weeks and summarized the extensive underwriting process involved. The financing position
of trying to get through the election and getting everything in order applied both to the hotel and
the apartments.
Mr. Cress provided an update on building demolition and advised that UD+P's attorney had
advised against proceeding with demolition due to liability concerns for UD+P and the City,
particularly given the timeline. While UD+P could continue to explore options, no solution was
evident.
Board Member questions were addressed by the consultants as follows:
• Mr. Cress indicated UD+P would pursue local financing and syndication for the apartments,
while exploring a two-path approach for hotel financing including outside institutional capital
and local financing/syndication.
• Mr. Naito noted all soft brands contacted were familiar with Lake Oswego, except European-
based Accor.
• Mr. Cress said UD+P was as confident as possible regarding the schedule and breaking
ground next summer. There was ambiguity to work through over the next eight weeks, but the
company felt reasonably confident about gaining traction in December and early 2025.
Financing remained the primary challenge, but the company felt better than it had in 12
months due to ebbing inflation.
• They were not counting on further interest rate drops, though they did not expect rates to
increase. The company planned to present based on current market conditions.
Redevelopment Agency Meeting Minutes Page 2 of 3
October 15, 2024
• Mr. Naito reported hotel soft brands had deep understanding of the regional market due to
their Pacific Northwest presence, and all the brands contacted were interested in having an
outpost in Lake Oswego.
• Mr. Cress noted that while soft brands were well-informed about the local market, national
financiers remained skeptical about the Portland region. Regional banks better distinguished
Lake Oswego from Portland.
• Mr. Fusaro explained the apartments were further along in permitting than the hotel. The hotel
required resubmission due to code changes, with an estimated six-month process.
• Mr. Fusaro and Mr. Cress discussed construction costs, noting recent stability in prices.
While new Code requirements would increase some costs such as concrete, HVAC, and
environmental standards; overall costs had decreased in other areas, resulting in no net
escalation.
4.2 Approval of LORA Meeting Minutes.
June 18, 2024, Draft Regular LORA Meeting Minutes
Board Member Wendland moved to approve the LORA Meeting Minutes as written. Board
Member Verdick seconded the motion.
A voice vote was held, and the motion passed, with Chair Buck and Board Members
Corrigan, Afghan, Wendland, Verdick, and Mboup, voting `aye', (6-0).
5. ADJOURNMENT, REDVELOPMENT AGENCY (LORA)
Chair Buck adjourned the LORA meeting at 3:33 p.m.
Respectfully submitted,
Kari Linder, Recording Secretary
Approved by the LORA Board on {insert approval date).
Joseph M. Buck, Chair
Redevelopment Agency Meeting Minutes Page 3 of 3
October 15, 2024