Options on Broadway add up.

Byline: Edward Russo The Register-Guard

Eugene's downtown property owners have named their prices, and they aren't cheap.

Altogether, the eight Broadway-area owners who signed option agreements with the city in the past few weeks are asking for $13.65 million to part with their properties.

Most of the parcels are owned by firms controlled by Tom Connor and Don Woolley of Eugene. The pair are asking for a total of $7.85 million for four buildings, including the vacant, four-story Centre Court building on the southwest corner of Willamette Street and Broadway, and the one-story building that houses Shaw Med medical supply at Broadway and Charnelton Street.

The city obtained the options to buy the properties in hopes of restarting redevelopment efforts in the heart of downtown, City Manager Dennis Taylor said. The properties include 10 buildings. The city is continuing negotiations with three other property owners.

If the City Council approves, Taylor and his staff could seek a developer interested in buying some or all of the properties at the option prices.

Only time will tell whether the city has negotiated prices that are attractive enough to draw interest.

"This is an exciting opportunity," Taylor said. "The cost of construction has been coming down the past several months, so we may be able to catch this wave in a way that would be very positive for downtown."

Last spring, Connor and Woolley and their development partner, Opus Northwest of Portland, dropped plans for a $165 million retail, housing and office complex downtown. The developers said they failed to reach agreements with some property owners on prices. The developers wanted roughly a dozen properties in order to control a broad swathe of the downtown around Broadway.

Downtown boosters were disappointed at the collapse. The two-block stretch of Broadway, between Willamette and Charnelton streets, has mostly empty storefronts and is frequented by street youths and panhandlers.

Many of the vacant properties are owned by Connor and Woolley.

On Friday, Opus Northwest executive John Bartell said that in light of the new options agreements, he would be interested in taking another look at downtown Eugene for a possible redevelopment project.

A developer wouldn't pay "inflated prices" because that would make it hard to turn a profit on a project, he said. "But the value of options is that they provide some certainty" about what the parcels would cost, Bartell said.

That allows a developer to calculate and see if a project makes financial sense, he said. Without an option, "you are guessing," he said.

The options have piqued the interest of another development firm, too.

On Oct. 16, the City Council selected Portland developers Tom Kemper and Ronald Skov to redevelop city-owned vacant property at West 10th Avenue and Charnelton, north of the Eugene Public Library.

Kemper and Skov, who have not reached a redevelopment agreement yet with the city, want to build 106 condominiums there.

Connor and Woolley own two buildings on the same block, north of where Kemper and Skov plan to build.

Kemper said Friday that he already had planned to call Connor and Woolley to see if he could buy that property.

"I know the city is interested in making (the condominium complex) a bigger project," he said. It would help to build on the Connor and Woolley property as well, and take the condo project all the way north to Broadway, he said.

The Connor-Woolley-Opus effort flopped last April. In May, city officials and their real estate consultant, Eugene commercial real estate broker John Brown, began negotiating with the same property owners who had declined to sell to Connor and Woolley and Opus.

At the time, Lazar Makyadeth, owner of Lazar's Bazar and another building on Broadway, declined to sell after receiving an offer of $1.1 million from Connor-Woolley-Opus.

After talking with the city, Lazar on Sept. 19 agreed to give the city the option to buy his two properties for $1.45 million.

The options essentially tie up the properties for a specified time, six months in some cases and a year in others. To secure the purchase prices for the first six months or the first year, the city paid from $3,000 to $6,000 per option. To extend the option another six months or year, the city agreed to pay most of the owners between $2,000 and $10,000 per option.

The agreements between Connor and Woolley, and the city, however, show the prices for extending the six-month option at $20,000, $30,000 and $40,000, respectively, on their three properties.

Taylor, the city manager, will ask the City Council for direction in the next few weeks before proceeding.

The city has financing methods that it could use to buy downtown property, but the value of the options lies in being able to assign them to another party, said Mike Sullivan, the city's community development division manager.

City Councilor David Kelly said he needs to learn more, but "there is a lot of positive potential here."

"If the city can jump-start further private development downtown, then it would be a good thing," he said. "But, as always, the devil is in the details."

Rob Bennett, owner of the Downtown Athletic Club, a downtown landmark near Broadway, said he was glad to see the city get the options.

With the options, "there's a chance for somebody to come in and do a redevelopment on a more comprehensive basis than otherwise would be the case," he said.

"The worst thing the City Council could do is to do nothing, or to create an environment where the Planning and Development Department can't pursue a comprehensive approach," Bennett said.

BROADWAY OPTIONS

The city of Eugene has reached purchase option agreements with eight property owners on and around Broadway. The agreements allow the city to buy the properties for fixed prices within six months to a year, with extensions. The city could assign the agreements to another party, which would be able to buy the properties for the same prices. The below property owners have agreed to sell for the following amounts:

Evergreen Associates (Connor and Woolley families): $3.15 million for two buildings on the south side of Broadway, between Charnelton and Olive streets

Prado Partners (Connor and Woolley families): $2.8 million for Centre Court Building at Broadway and Willamette Street and adjoining excavated pit

Evergreen Associates (Connor and Woolley families): $1.9 million for Washburn Building on southwest corner of Broadway and Olive Street

Jens Bruun Estate: $1.7 million for building leased by Scan Design on Willamette Street

Lazar and Rosy Makyadeth: $1.45 million for two buildings, including Lazar's Bazar, on Broadway

Sanjacron (Roberts family): $1.2 million for building that houses Taco Time and other tenants on the northwest corner of Willamette Street and Broadway

Joshua Keim: $830,000 for former Alder Art gallery building

Don Davis Family: $625,000 for building that houses John Henry's bar

Total: $13.65 million