Utility to weigh relocation options.

Byline: Joe Harwood The Register-Guard

The Eugene Water & Electric Board for more than five years has thought about moving some of its operations away from the downtown riverfront.

But until Triad Hospitals Inc. came knocking on EWEB's Fourth Avenue door last spring, talk of a relocation focused on some fuzzy future date.

When Triad declared it wanted 22.5 acres of the 28 acres the utility owns for a new hospital, the sudden interest upset EWEB's methodical, plodding approach to someday moving all or part of its campus away from the Willamette River.

And the appearance of a second suitor has complicated things further for EWEB. Eugene real estate firm Arlie & Co. last month unveiled a conceptual proposal to buy the property and create a mixed-use commercial, office and residential development. Arlie last week bid $3.2 million more for the EWEB campus than Triad offered.

And all this happened without EWEB ever putting its site up for sale.

So it's not surprising that the utility board is struggling to handle the fast-paced and unexpected turn of events.

The board, with the exception of one member, is made up of relative newcomers who have inherited policies adopted by previous board members - who themselves never suspected there would be two bidders for the downtown property.

Aside from complex issues such as the cost for developing new facilities elsewhere in Eugene, and deciding what's a fair sales price for the riverfront campus, the board must deal with the growing resentment among ratepayers who feel they've been ignored thus far in the process. Many ratepayers are baffled at the prospect of EWEB selling its 17-year-old riverfront headquarters building.

Starting at its meeting Tuesday night, and continuing for the next several months, the publicly elected board - which often labors in obscurity - will wrestle with decisions that could shape the face of Eugene for decades.

The board's starting point is a 2002 study that concluded it would be cheaper to move to a new site than to stay put.

Sandra Bishop, the only sitting commissioner serving on the board at that time, said one of the main reasons to relocate stemmed from transportation constraints.

Large utility trucks have difficulty pulling in and out of the downtown site, especially when towing utility poles, she said.

"It made sense to find other land, because in 20 years we didn't want our industrial operation on the riverbank," Bishop said.

Approximately three-fourths of the 28-acre property houses World War II-era Quonset operations buildings, maintenance facilities and a pole storage yard.

The utility needs to refurbish the operations buildings, a job now expected to cost between $10 million and $12 million, said Ron Farmer, board president.

Board members and staff assumed once the utility found another site "we would hold on to it and figure out how to finance the move," said Deborrah Brewer, EWEB's government affairs coordinator.

"We assumed any move would be financed through a full or partial sale of the EWEB property."

Those discussions led to a policy decision to move the administrative offices as well as the operations facilities should the opportunity to relocate ever present itself, Bishop said.

Whether to move the entire operation or whether to move only the industrial portion of the operation and keep the administration offices at the riverfront site remains a thorny issue, and board members have differing ideas about it.

"Given the financial constraints we have now, I think a split operation is the only thing that makes sense," Bishop said.

"It's the only rational and reasonable way to respect our ratepayers, because if we adhere to keeping the headquarters and operations together, it will cost ratepayers," she said.

Such sentiments could frustrate Triad's plans, which include building a five-story hospital and converting the EWEB administration building into medical offices.

It's unclear if Triad would have enough room if EWEB offered only the industrial portion of its site for sale and kept the administration building.

EWEB Commissioner John Simpson, who took office in January, said he, too, supports moving the operations facilities but keeping the administrative building.

"I don't believe the industrial nature of the operations is appropriate for the riverfront," Simpson said. "And my own personal take on this is there is no reason to move the headquarters building."

The administration building, completed in 1988 at a cost of $12.4 million, was supposed to last the utility for 50 years.

Plus, Simpson said, the utility is receiving nothing but negative comments from ratepayers concerning the possibility of selling the 17-year-old building.

Mel Menegat, a commissioner since 2003, said he wants to upgrade the decrepit operations buildings.

"If we do nothing as far as a sale, we still have to do something" to improve those facilities, he said.

Menegat said the board is likely to take up the debate of whether to move the operations division and keep the headquarters along the river.

Like others on the board, he is adamant that a full or partial move not lead to increased rates.

The board is set to vote Tuesday night to buy 46 vacant acres at Roosevelt Boulevard and Belt Line Road in west Eugene for $1.6 million.

But purchasing that land doesn't mean the utility will move anytime soon.

"We don't need to move the utility right now," Bishop said. "I think we need to invest in another piece of land. That's an investment, and if for some reason we don't move, we could sell it later."

Menegat, Farmer, Bishop and Simpson said they all agree the purchase of the Roosevelt property is separate and distinct from a sale of some or all of EWEB's downtown campus.

Also Tuesday, the board will vote on whether to award a contract worth just under $800,000 for a design and engineering study that will provide the utility with precise estimates for the cost of moving operations and administration functions.

EWEB is relying on a 2002 study that estimated it would need $38.5 million from the sale of its property to move and build new operations and headquarters facilities. That figure includes a 35 percent contingency cushion. Offers from Triad and Arlie are $24.8 million and $28 million, respectively.

Until the conceptual design study is complete, probably this summer, any talk of selling the campus is premature, utility officials said.

"Until we know what it will cost us to move, it's completely academic to talk about different offers," Farmer said.

Farmer said he is immune to any pressure from the Eugene City Council, which wants a hospital on the site, or Triad, to hurry the process along.

"I don't feel any pressure to move forward on anyone else's timeline," Farmer said. "We are going to move forward on a timetable that protects our ratepayers."

Simpson is a bit more blunt on the prospect of moving administrative functions to west Eugene. "The only thing I would want to do is split the operation and keep the headquarters at where it is," Simpson said. "I know that's not in harmony with the city and it's not in harmony with Triad."

EWEB MEETING

The board is set to vote on buying 46 vacant acres in west Eugene for $1.6 million.

When/where: 6 p.m. Tuesday, Board Room, North Building, EWEB headquarters, 500 E. Fourth Ave.

CAPTION(S):

EWEB's 28-acre site along the Willamette River includes World War II-era buildings and a pole storage yard. Several board members are adamant that a full or partial move of the facilities would not lead to increased rates. Chris Pietsch / The Register-Guard `I don't feel any pressure to move forward on anyone else's timeline. We are going to move forward on a timetable that protects our ratepayers.' RON FARMER EWEB BOARD PRESIDENT