Oregon officials say purchasing the former Kmart site on Navarre Avenue is a risk, but it’s one that could finally unlock the city’s untapped potential.
In January, City Council approved a lease-purchase agreement with the landowner which included the ability for the city to back out by the end of April. As Oregon concludes what City Administrator Mike Beazley calls the “due-diligence phase,” it appears the city is ready to move forward.
Mr. Beazley said during Monday’s committee of the whole meeting the administration has recommended purchasing the property and legislation will be coming soon.
“The last time a big box store went empty on Navarre it stayed that way for 15 years,” Mr. Beazley said. “We concluded we can’t afford that kind of risk. There’s risk in moving forward, but there’s more risk in doing nothing.”
Since the January agreement, Oregon spent about $200,000 to clean up asbestos and the area of the building formerly home to an auto repair shop. Mr. Beazley said the title work is in its final stages.
The city believes the 45-acre space is crucial to its efforts to establish a robust downtown with mixed-use development. The two sides agreed to a 10-year lease on the property, which would cost $3 million. It would cost another $3.7 million to buy the property outright at the end of the lease, although the city has the option to purchase it any time during the lease.
“We have tenants already interested that would cover almost all those costs,” Mr. Beazley said. “We’ll put a developer in our shoes. This is a risk the city is willing to take.”
Mr. Beazley said there is heavy interest from multiple developers — one local, and a national developer from the “Great Lakes area” that has projects in the region.
Mr. Beazley compared the situation to the city purchasing 150 acres of land 15 years ago in the northwest part of town without any developers. The land is now home to a refinery, warehouses, and the Oregon Clean Energy Center.
“This is a lot of work from a lot of people,” Councilman Kathleen Pollauf said. “We listened to what [the public] wanted. We have the opportunity to step into the next phase of what we want Oregon to be.”
One resident took issue with the plan, doubting the city would see a return on its investment.
“I will thoroughly enjoy rubbing some people’s noses in it when they don’t bring Kohl’s or Olive Garden,” former Oregon school board president P.J. Kapfhammer said. “You’re spending other people’s money, including mine. I want to know if the money you’re spending is going to come back.”
Mr. Beazley told him the city believes this would be a low-risk investment.
Officials envision a downtown development consisting of restaurants, retail stores, medical offices, and housing.
First Published April 8, 2019, 11:57 p.m.
