Rapoza seeks extension: Panel members want developer to commit funds

He directed those words at the Feb. 26 meeting to Michael Leash, owner of The Vault Bistro and Lounge and the local point of contact for Rapoza.

“I’m going to shoot from the hip,” said Weast prior to the monetary demand. “If you are confident it’s going to be pulled off, it’s not essentially going to cost you anything.”`

Weast was joined by three other committee members in tying the nonrefundable payment to a recommendation that the urban renewal board grant an extension of time for Rapoza to finalize the deal. The development group is seeking to build a high-end hotel and conference center that involves six parcels in downtown The Dalles.

Gary Grossman, vice-chair of the committee, Michael Zingg, a member of the city planning commission, and Jennifer Botts from the Northern Wasco County Parks and Recreation District voted in favor of Weast’s motion.

“The drift I get is that we have a developer that’s trying to buy time,” said Zingg. “It’s making it hard for a group like this to keep extending deadlines and spending money.”

“I think we’ve gone too far to stop now and I think a lot of us believe in the project,” said Botts. “For economic reasons, I think this needs to happen.”

The money would be made part of the overall financial package, said Weast, so Rapoza had nothing to lose if its members followed through on plans to build a complex that involves six parcels next to the historic theatre, which will also be renovated.

Voting against that idea was Richard Elkins, a citizen member of the committee, Robin Miles from Mid-Columbia Fire and Rescue and Linda Miller, a new city councilor.

“We haven’t had anybody beating our door down (for the parcels sought by Rapoza),” said Miles, who favored extending the agreement as requested.

“I think $20,000 is very ‘thin skin,’” said Miller, who campaigned last summer and fall against urban renewal dollars being invested in a new project instead of being used to refurbish existing structures.

“Here are all these dollors going out over a period of time and nothing coming. We’re getting promises but these urban renewal dollars aren’t going anywhere.”

“We don’t have the budget to help other businesses because we’ve committed it all to one project. I think we’ve lost the goal of what urban renewal was meant to do,” said Elkins.

Grossman warned Leash that it was likely that, if the urban renewal board granted another extension, it would be the last.

“I think the timeline is becoming an issue,” he said.

Nolan Young, city manager, said the advisory committee’s recommendation would be passed on to the urban renewal board of directors, comprised of city council members, on March 11. He said a decision about whether to accept or reject it would be made at that time.

“I’m a little concerned about tying up cash the developer could use to move the project forward just as a show of good faith,” he said.

Rapoza is seeking a fourth extension on finalization of the Development and Disposition Agreement. The current deadline to nail down the terms and timelines of construction is March 15 and the group wants until the end of April to tie up loose ends.

If the urban renewal board grants that request, Young will ask to open the bidding process for design and build proposals for the parking structure in April that will be paid for with urban renewal dollars. He told the advisory committee Tuesday that work on that part of the development plan will not begin until the hotel is also ready to be constructed.

Leash told the committee that Rapoza had already made many financial contributions to the project and would be spending millions of dollars to bring it to fruition. He said the planning process had encountered delays due to the complexity of the proposal and the changes that had to be made when roadblocks were encountered.

“I think it’s been kind of an ebb and flow thing that happens with these types of projects,” he said.

For example, he said the latest complication in finalizing the development agreement had been caused by one of those challenges. He said a recent archeological excavation of the Recreation Building property revealed artifacts from Chinese businesses that had stood in that location from the 1880s into the early part of the 20th century. These items included ceramic pieces, an opium pipe bowl, gaming pieces, buttons, shoes and bottles.

A fuel tank that was located during the study also has to be removed, a cost of about $10,000 that will be paid by urban renewal.

Leash said the new discoveries meant that mitigation measures to put an underground parking garage on the site once the Recreation Building had been demolished would require the expenditure of $350,000. In order to avoid that cost, he said development plans had to be reworked so about half of the 52 spaces that would have been underground can be added to the three to four level parking garage outside the hotel. That structure will extend to the east and stop about six feet from the old transportation building, which is now the Wasco County Veterans’ Service Office.

Leash said another recent delay was caused by the presence of asbestos and lead paint in the Recreation Building that had doubled the expected cost of demolition.

The price tag affixed to that work by a consultant was $500,000 in November, more than double the expected cost. Leash said Rapoza will likely be able to bring that expense down to about $200,000 by dividing the work between an abatement company and demolition experts.

He said new conceptual plans had to be drawn after the original idea to develop the Recreation Building and parking lot and the parking area of the Commodore II was abandoned. He said when the owner of a necessary piece of property didn’t want to be involved in the project, Rapoza had to spend time investigating alternative locations and designs.

Discussions between Rapoza and city officials included potentially erecting the hotel in the municipal parking area. However, after a study of regulations, environmental factors, prevailing wage issues and other concerns, Leash said developers decided to go in a different direction.

That delayed signing of the first agreement in 2011 and the subsequent lapse of the first Memorandum of Understanding. In July 2012, new terms were decided upon for that agreement and forward movement began in negotiations of a new agreement, which was originally slated to be signed last fall but was then delayed until March.

The new plan involves six parcels in the Granada block and features a hotel with a primary entrance on First Street and another on Second, with the potential of a third off the Washington Street Plaza. The hotel will feature 135-150 rooms, two food and beverage outlets and 2,000-4,000 square feet of meeting space. Rapoza will be working with Wave Hospitality Advisors, Inc., to create the complex that will also feature a large banquet hall, swimming pool, fitness center outdoor terrace and event space in the theater.

Rapoza intends to purchase several properties from the city for the project; the Granada for $387,098, the Recreation Building for $475,315 and the Blue Building for $361,980. Purchase of the Granada will require that the historic features of the theatre remain intact. In return, urban renewal has guaranteed $200,000 to install a new HVAC and sprinkler system, as well as exterior fire doors.

Weast told Leash at the Feb. 26 meeting that many area residents believed urban renewal, by purchasing the properties in the first place and putting up about $120,000 for the archeological survey of the Recreation Building site was absorbing too much cost for the project.

In addition to those expenses, urban renewal will spend up to $3 million for the parking structure and finance up to $100,000 for demolition of the Recreation Building.

Rapoza will also be provided with a credit toward system development charges related to water and sewer at a rate of 1 percent for each permanent full-time job created by the project. Leash told city officials in 2012 that 30-40 full-time staffers will be needed to run the hotel, plus about 20 people to staff the main restaurant.

Young told the committee Feb. 26 that many of the costs absorbed by urban renewal were necessary to market the Recreation Building and other propertie, even if the deal with Rapoza fell through.

“Progress has been made during this whole period of time (about three years of negotiations) even if some of the time it was sideways because of things that came forward – but things have continued to move ahead,” he said.