Hilton eyes Granada block

Patrick Spear, vice-president of franchise development for the western region of Hilton Hotels and Resorts, said his company had been waiting to negotiate a franchise agreement with Rapoza Development, a Hood River-based firm.

He told the Columbia Gateway Urban Renewal Agency board on April 22 that Hilton could not move ahead with those negotiations until the legal agreement was signed that set out the terms and timelines for redevelopment of the Granada block.

“Hilton has given a letter of interest to the development group,” said Spear. “However, we are unable to sell a franchise unless there is some type of a site control document.”

He said Hilton has 1,800 Hampton Inns in the Americas, Asia and Europe, and 98 percent of those properties are franchised, which would also be the case in The Dalles.

Mayor Steve Lawrence, in his role as chair of the agency board, asked Spear at the April 22 meeting how many hotels Hilton had built next to a freeway, railroad tracks and a wastewater treatment plant.

“Obviously, we sell sleep so being by a railroad track is not optimal but there are ways to combat sound and vibration,” was Spear’s reply.

The agency board, comprised of city councilors, approved the 62-page Disposition and Development Agreement in a 4-2 vote. Lawrence and Councilor Linda Miller, who represents the city on the urban renewal advisory board, weighed in against the contract. Giving approval were: Councilors Dan Spatz, Tim McGlothlin, Bill Dick and Carolyn Wood.

“We’re excited to have the DDA approved after more than three years of studies, meetings, changes in design and addressing archeological issues and other challenges,” said Michael Leash, the local representative for Rapoza, on Wednesday. “Now we’re in a position to begin working with financial groups to get the funding that we need.”

Both Lawrence and Miller ran their respective campaigns in 2012 in opposition to investing urban renewal dollars in the $22 million project. They said the district’s tax revenue should be used, instead, to restore historic structures such as the Civic Auditorium where Lawrence serves as the managing board member and St. Peter’s Landmark, where Miller is seated on the board.

“Why put money into the Granada when we haven’t finished the Civic?” asked Lawrence in a follow-up interview. “I still feel like that is a viable question.”

He also supports urban renewal dollars being used to make infrastructure improvements downtown that will help fill 40 empty storefronts.

Miller explained after Monday’s meeting why she voted against adoption of the agreement after approving its advancement at last week’s urban renewal advisory board meeting.

“I voted just to send the agreement forward but I don’t think this is a viable project at this point; not when dollars are needed for the projects downtown,” she said.

Lawrence, a former trial lawyer, spent more than one hour Monday questioning staffers, Leash and Spear about details tied to the agreement.

He asked why there was no business or financial plan included in the contract and said Wednesday that he had been unsatisfied to learn that these documents would be provided at a later date. He said the city was investing more than $1 million to aid in the development of a hotel and conference center and tax dollars needed to be safeguarded.

“This is still a project that is based on the theory, ‘If you build it, they will come,’” he said. “I was waiting for someone to give me some answers and they didn’t.”

Leash explained at the meeting that, with three site changes and mitigation to protect archeological finds, along with other unforeseen challenges, it had been impossible to pin down the numbers that Lawrence requested. However, he said a feasibility study had been completed long before the mayor took office and a new business plan put together each time a modification was called for.

Now that the final crunching of numbers can begin, said Leash, the documents requested by Lawrence will be prepared and presented at a later date, as required in the new agreement.

“We are talking about a really big project that is going to create 30-50 new jobs and we would not have gone this far if we did not think it was feasible,” he said on Wednesday.

Gene Parker, city attorney, addressed Lawrence’s concern that areas of the agreement were too vague and gave Rapoza too much leeway in meeting deadlines.

He said the city had consulted with Jeanette Launer, an attorney specializing in urban renewal issues, when crafting the document and had followed her recommendation to provide flexibility due to the size and scope of the project.

Rapoza will be purchasing the Recreation building — to be demolished — and parking lot from urban renewal for $475,316, with a credit of $10,004 for past taxes that has already been paid.

The Blue Building next door will be sold to Rapoza for $380,000, the Granada theater for $365,406 and the Commodore II parking lot for $102,000. That is the amount paid for all the properties by the agency.

Lawrence expressed doubt that the deal for the three buildings could be closed by the end of August, as stated in the agreement.

Nolan Young, city manager, acknowledged that the 120 day extension allowed in the contract to finalize those sales was probably going to be needed. He said the Aug. 31 date that had been decided upon during initial negotiations had been left in the current agreement to provide the agency with an opportunity to be updated by Rapoza about development and financing plans.

“By leaving that wording in the agreement it gives us the ability to say, ‘What’s the progress today?’” said Young.

“I kind of like having it (deadline and potential extension) because otherwise we get to the end of the year before we have a check-in point,” agreed Spatz.

Dick, also an attorney, pointed out that while there was language in the contract that gave Rapoza flexibility, protections for the agency had also been included in the case of a default.

“There is good language going the other way to provide support to the agency,” he said.

In a follow-up interview, Lawrence said that he plans to oppose any deviation from the conditions outlined in the agreement unless Rapoza can show that a justifiable need exists.