City pays to extend options to buy.

Byline: Edward Russo The Register-Guard

Time costs money. Just ask the city of Eugene.

Faced with expiring downtown property purchase options, the city has paid landlords $150,000 to keep its right to buy six key downtown properties on or near West Broadway, in the heart of the proposed redevelopment area.

City officials also have agreed to pay $50,000 more and $200,000 more, respectively, for two of the properties than under previous purchase option agreements, according to the new agreements signed by interim City Manager Angel Jones in the past few weeks.

Without the renewed purchase options, the city would have lost control over most of the land and buildings in the potential redevelopment area shortly before a public vote on downtown.

Eugene voters on Nov. 6 are to decide whether to give the City Council the ability to spend $40 million on downtown redevelopment during the next two decades.

"It was necessary to extend the options until the City Council could decide whether it wanted to acquire the properties," Jones said.

The purchase options cover the properties with the Scan Design building on Willamette Street, three buildings on West Broadway owned by Eugene landlords Tom Connor and Don Woolley, including the empty Centre Court and adjacent pit, and a pair of buildings that house two bars, John Henry's and The Horsehead.

The agreements allow the city, or another group assigned by the city, to buy the properties for specified prices within certain periods. The city pays each property owner a set amount for each option.

Altogether, the city since last year has paid $344,500 for the options to buy 11 properties in the two-block West Broadway area for a total purchase price of $18.2 million.

The separate prices, generally considered above market value, range from $675,000 to $3.15 million.

Under tentative plans, the city could buy some or all the properties and sell them at a discount to a pair of Portland developers interested in redeveloping West Broadway, between Willamette and Charnelton streets.

As part of the agreements, $209,000 of the option money would be credited toward the purchase prices if the properties were bought during the option periods.

Most of the original options for the six properties would have expired between Sept. 25 and two days ago.

The original option for The Horsehead building would have expired on Nov. 17.

The length and terms of the new options vary. The owners of the Scan Design building, for example, only wanted to extend the city's right to buy until Dec. 19, less than eight weeks from now.

The deals with Connor and Woolley last until next March 19. The agreements with Jack Louie, the owner of The Horse-head building, and the Davis family of Eugene, the owner of the John Henry's building, last until next September.

In the latest round of options, the city agreed to higher prices on two properties than in the original options.

The Seattle-based owner of the Scan Design building would get $1.9 million, or $200,0000 more, for the property if the option is executed by Dec. 19. The Davis' family asking price has risen by $50,000, to $675,000.

The city paid Louie $45,000 to renew its option on his property, the highest of the six renewals.

Louie, who had received $20,500 for the first option, also got the city to pay $1,000 of his legal fees related to the renewal.

Connor and Woolley, who own the most property on the two-block stretch of West Broadway, received a total of $106,000 for the first options on the Centre Court and pit, the adjacent Washburne building, and the Shawmed building, between Charnelton and Olive streets.

Connor and Woolley agreed to extend the options on all three properties for a combined $75,000.

Tentative redevelopment concepts indicate that all buildings except the Centre Court and Washburne would be razed to make way for new structures.

However, Mayor Kitty Piercy and City Councilors have indicated an interest in seeing if the commonly called Taco Time building at Broadway and Willamette and the Shawmed building should be retained for reasons of historic preservation.