The city of Oregon is continuing to move forward with its burgeoning plan to develop a “town center” in the Navarre Avenue area.

At a special meeting called after a committee of the whole meeting Sept. 5, Oregon City Council voted 6-0 to approve a formal agreement between the city and Cleveland-based developer Fairmount Properties.

This allows the parties to continue to work on the main part of the venture that will house the retail and business space.

First announced before the pandemic, the project, based around the former Kmart property on Navarre that closed in 2018, is to have businesses, restaurants, a hotel, apartments, and single-family housing.

Joel Mazur, city administrator, described the vote as a major step to finishing this project sometime next year.

Mr. Mazur has said the town center project is a way to ensure that the city, which was only incorporated within the last 70 years and has experienced growth in the last 20 years, has a major “downtown” area to greet its visitors, which he feels it doesn’t now, although the Navarre Avenue corridor east of I-280 comes close.

“We have been working with Fairmount Properties for over three years but without a contract,” Mr. Mazur said last week. “This memorializes an agreement with them that sets up a structure of accountability.”

He said the agreement “starts the clock” in officially setting out timetables for stages of the development, in addition to providing a budget and outlines for three tax-increment financing districts.

As listed in the text of the agreement, actual construction work could begin as soon as next spring on the commercial sector while the residential sector of the project will see progress before the end of this year.

The document lists total construction costs for the hotel, retail space, and surrounding mixed-use development to be between $59.5 and $71.5 million.

“This [agreement] will provide assurance for Fairmount Properties that when they speak to tenants and recruit them to a be a part of this project, that it is a real project,” Mr. Mazur said.

In June, the city announced that the anchor tenants of the development would be Beerhead Bar and Eatery, Olive Garden, and Home2Suites, but Mr. Mazur said the agreement would be to entice smaller tenants yet to be booked that would fill the rest of the development’s space.

“On the back end, banks won’t lend to the project if there is not a secure tenant base,” he said. “So they will be able to use this agreement to lock in more tenants and build that capacity, so they could go to the lending institutions to get more money and borrow money to complete the project. That will be the success of the project — getting it filled up with desirable tenants.”

Steve Hornyak, an Oregon city councilman who chairs its economic development and planning committee, agreed that the project can truly begin in earnest after the signing of the agreement.

“It allows [the developers] to start signing lease agreements,” he said. “It allows them to start the financing and some of the preconstruction work that has to be done — site surveys, developments, and architecture. It is now starting to happen in full force. It is not conceptual designs anymore; they are starting to look at building designs.”

Having been intimately involved for a while now, Mr. Hornyak said he is pleased with how the project is coming along.

He said there is not a rigid system in place for Fairmount to report back to council on its progress, although he thinks he will hear from developers every 30 to 60 days or so either in a meeting or through a written update of some kind.

“The city is committed to really accelerating this process as quickly as possible,” Mr. Hornyak said, mentioning the retail space is the project’s first phase, which he expects to be completed by the end of 2024. However, the residential phases of the project, which extend south to Pickle Road, could last into 2026.

The councilman, who received the third highest vote total in the Sept. 12 council primary in Oregon, said juggling the simultaneous timelines of the project will be a challenge but won’t be anything the city can’t handle.

“We started with idea generation on exactly what we wanted this to be several years ago,” he said. “Realistically, it took a couple of years to fine tune what we wanted this to be as not only a marketplace, but a city venue with programming for events.

“My involvement has really been over the last 18 months where we tried to bring it into what it is today, which is an actual project. ... We finally took it from the idea stage to the actual stage,” Mr. Hornyak said.

First Published September 18, 2023, 6:29 p.m.