Wizer Block 137 Chosen by the Lake Oswego Review as Top Story in 2015

From the Lake Oswego Review Online 12/30/15.  See full article here.

Nothing had as much of an impact on the community in 2015 as the Wizer Block, which sits atop The Lake Oswego Review’s list of the Top 10 stories of the year.

1. Older and Wizer

KESSI

KESSI

In 2014, protesters took to the streets in what became a bitter and divisive debate over the future of downtown Lake Oswego. In 2015, they took to the halls of justice in a legal battle that went all the way to the state Supreme Court.

Opponents of the 290,000-square-foot Wizer Block project argued that it was too big and too dense, and that it did not include the right mix of homes and shops for what was always meant to be the city’s retail shopping core. The city’s Development Review Commission agreed, saying the proposed 200 apartments and about 40,000 square feet of commercial space did not reflect downtown’s “village character.”

But in late 2014, the City Council disagreed, setting off a year of appeals by Save Our Village, the Evergreen Neighborhood Association and LO 138 LLC, which represented Lake View Village.

In March, the state Land Use Board of Appeals upheld the council’s decision. And in August, the state Court of Appeals affirmed LUBA without even issuing an opinion, rejecting opponents’ arguments out of hand and indicating that the judges felt the case had no precedential value.

Undeterred, Save Our Village then petitioned the state Supreme Court for review. But in early November, that appeal also was rejected with a simple one-sentence statement: “The court has considered the petition for review,” the justices said, “and orders that it be denied.”

That decision “surprised and disappointed” attorney Greg Hathaway, who represented Save Our Village throughout the legal challenge.

“Surprised because we believed we had presented a very strong legal case justifying Supreme Court review to preserve the village character of downtown Lake Oswego,” he said, “and disappointed because Save our Village and other organizations and many citizens of Lake Oswego remain concerned that the Wizer development is too large in scale and will not preserve the village character of the downtown.”

But the decision thrilled Gene Wizer and developer Patrick Kessi, who had been so confidant of the legal challenge’s resolution that they signed closing documents with the city and held a groundbreaking ceremony on the Wizer Block in October — an event that Wizer himself was able to attend.

“It’s good to have it over,” Kessi told The Review after the decision was announced. “We’re excited now that we can keep going forward and produce a project that Lake Oswego is proud of.”

Crews broke ground Oct. 22 on the mixed-use development at the corner of First Street and A Avenue. Final demolition permits were issued days later, and workers have been tearing down the 1950s-era shopping center ever since.

Excavation of the site for underground parking was nearly complete by the end of the year, setting the stage for construction of a project that is now expected to open in Fall 2017.

 

Kessi, Wizer, city sign off on closing documents for development of Block 137

Written by Saundra Sorenson .  Originally published in the Lake Oswego Review 10/22/15.

It’s official.

Developer Patrick Kessi, property owner Gene Wizer and representatives for the city signed closing documents this week on Block 137, clearing the way for the first mixed-use development to be built in downtown Lake Oswego in more than 13 years.

Those documents were filed with the Clackamas County Clerk’s Office on Wednesday. Terms of the deal were not released, although funding for the $93 million project reportedly will come from a real estate equity trust that represents more than 320 pension funds in the United States.

The trust is not named in the new paperwork, but sources tell The Review that it has more than $5.9 billion in net assets, making it one of the largest real estate equity funds in the U.S. The fund invests in office buildings, warehouses, flex/research and development facilities, apartments and retail centers.

The fund’s properties generally meet LEED green-building and Energy Star standards. It also requires that all contractors working on its properties be covered by collective bargaining agreements with trade unions, The Review has learned.

“The developer has found an equity partner that is willing to provide sufficient funds so that no debt would be necessary for this particular project,” Redevelopment Director Brant Williams told The Review, calling the financing option “positive.”

“We will no longer have an institutional lender that could potentially foreclose on the project,” Williams said.

This week’s closing comes despite ongoing legal issues surrounding the Wizer Block project. Although the City Council approved the development more than a year ago, it has been tangled up in a series of appeals.

Both the state Land Use Board of Appeals and the state Court of Appeals upheld the council’s decision when it was challenged by Save Our Village, the Evergreen Neighborhood Association and LO 138 LLC, which represents Lake View Village. Save Our Village has now petitioned the state Supreme Court for review, but it may be another month or so before the court decides whether to hear the case.

Kessi and his partners remain confident in the eventual outcome, however, as does the city. Earlier this month, the City Council voted unanimously to amend the city’s development agreement with Evergreen Group to reflect Kessi’s plan to proceed with construction despite the contingencies.

Williams explained to the council that although the developer was confident enough in a favorable legal outcome to move ahead on closing the deal, the city could not do the same.

“In the current agreement, (the Lake Oswego Redevelopment Agency) is required to make our first payment at closing,” Williams said. “We’re also required to not make a payment until all contingencies are met.”

The amendment to the development agreement specifies that LORA will not be required to put any money toward the project until the state Supreme Court petition has been resolved.

“This provides the most protection for the funds the Redevelopment Agency is putting forward into this project,” Williams said.

With the sale complete and financing in place, Kessi and general contractor Lease Crutcher Lewis prepared to move forward with deconstruction and demolition of the 1950s-era shopping center at the corner of First Street and A Avenue. The red brick building will be replaced by a 290,000-square-foot, mixxed-use development with 200 apartments and nearly 43,000 square feet of commercial space. The project will also include 430 parking spaces, 135 of which will be for public parking.

Williams told The Review that final demolition and erosion-control permits were issued Wednesday morning, and Kessi said he expects work to begin immediately. Construction fencing already surrounds the site, and crews have been preparing the building for demolition for several weeks.

Part of that effort has involved saving some of the iconic pieces of the property, according to Seth Henderson of PHK Development Inc.

Henderson said it took some time for crews to figure out how to remove the 10 shephard’s hook light fixtures surrounding the Wizer Block’s parking lot, but the lenses have been removed, electrical connections have been severed and workers were expected to cut the bolts that attach the light poles to their concrete bases this week. Henderson said he is working with the city and its Historic Resources Advisory Board to transport the light posts for storage.

“Along with the El Ranchito and Wizer signs, (interior wooden beams) and tile mosaics, I think we managed to fulfill all the salvage requests received to date,” Henderson said.

Construction on the Wizer Block is expected to take 22-24 months, with an estimated completion date of fall 2017.

Contact Saundra Sorenson