With downtown changes on the line developers seek property sites from eager, or reluctant, owners.

Byline: Sherri Buri McDonald The Register-Guard

About a dozen individuals own land on the west end of downtown that lies smack in the footprint of a 2 1/4 -block redevelopment proposed by local developers Tom Connor and Don Woolley and the Minneapolis-based Opus Group.

Last year, the developers took a stab at acquiring some of this land, but so far, they haven't made much progress.

The pressure on these small property owners recently cranked up a notch when the Eugene City Council signaled that it would consider - as a last resort - using condemnation to clear the way for new stores, housing, offices and entertainment venues. While some of the small land owners are eager to sell if the price is right, others want to continue running their businesses, or pass the property on to their heirs.

Different issues are at stake for different property owners, and it would be no small feat to reach agreement with every one of them.

That explains why the developers have been quietly working with city officials to gauge the council's willingness to use its right of eminent domain if the developers aren't able to acquire the parcels they say they need.

If the developers don't succeed in getting the land, it's unclear whether, or how, they would proceed.

"We'd have to relook at the whole project, if we weren't going to get those pieces," said Tom Connor Jr., manager of the Connor-Woolley side of the project. He wouldn't say whether it's a potential deal breaker.

The developers' plans call for turning a two-block stretch of largely vacant retail space - most of it owned by Connor and Woolley - into housing and offices above ground-floor retail, as well as a hotel. Plans also envision a 1,600-seat cinema above retail in the Atrium building at West 10th Avenue and Olive Street, which would require the city to sell the Atrium to the developers.

The goal is to build all of the elements at once, Connor Jr. said. But some of the housing, which could be as tall as seven stories, would probably take longer to build, he said.

Although there is no formal construction time frame because the developers don't know when they'll be able to start, construction could begin on some parts within 12 months; other parts might begin in 18 to 24 months, Connor Jr. said.

The developers first publicly revealed their vision for downtown in an interview with The Register-Guard in early June.

From spring to fall last year, the developers' broker, Sue Prichard, contacted numerous property owners to gauge their interest in selling, and to make offers in some cases.

The developers obtained an option, which expires on Feb. 1, to buy the former Book Mark property at 856 Olive St. But other offers were rejected because property owners wanted more than Connor and Woolley were willing to pay, Prichard said.

Now efforts to buy land are "kind of in a holding pattern," Connor Jr. said. "We're in different stages of negotiation with every property owner."

He declined to say how many property owners the developers are talking to; it appears to be at least 12.

Some property owners, such as Jack Roberts and his sister and brother, who own the 15,000-square-foot building on West Broadway that houses Taco Time and other tenants, are willing to sell.

Last year, "we told Tom Connor Sr. that we are not going to be a holdout," Roberts said. "We're not going to stand in their way. We think it's great what they are doing."

Most of the other property dealings, however, have been more complicated.

Restaurateur Joshua Keim owns the former Alder Gallery space at 55 West Broadway and a small space to the north at 64 West Eighth Alley. Last September, the developers asked him for a price, Keim said, and he responded with a proposal that would have enabled him to remain a tenant in the space.

"They didn't go for it," Keim said.

So he's pressing ahead with his own plans. He said he's spending $100,000 on lighting, sound, kitchen and bar equipment to set up Club Snafu, a 1,000-square-foot bar, deli and dance club in the West Eighth Alley space. The club is scheduled to open in the next two weeks.

Why did he take this step when the future of downtown is so up in the air?

"I'm a risk taker," said the 35-year-old Keim, owner of Cafe Lucky Noodle and Ring of Fire. "It's my property. I wasn't just going to sit on it when there wasn't any real offer being made."

Keim said he's upset that the city council is considering the possibility of condemnation.

"I think the Supreme Court made a big mistake in their decision," he said, referring to last year's case Kelo et al vs. City of New London. In it, the court upheld the constitutionality of local governments acquiring private property through condemnation, then selling it to other private parties, as long as it serves a public purpose, such as economic development.

"Who's to say my million isn't as good as their million, or I'm not going to make as much money off my space as they are?" Keim said.

"It doesn't make sense to me for them to not just meet everyone's price," he said. "They have the money."

Lazar Makyadath, owner of two properties on west Broadway, including his namesake variety store, also wonders why the developers don't just pay what property owners are asking.

"If they want us to move, then I think they have to share part of their $165 million" - the estimated total cost of the redevelopment. "If they have $165 million, it's not hard for them to get a few more million," he said.

Property owners are asking for much more than market value, Connor Jr. said. "The prices they're asking don't allow the project to function," he said.

"It has been very challenging to get a meeting of the minds on property values," Prichard said. "We have done everything we can think of to make this work. The developers have always expected to pay full market value and never expected to get a special deal."

Property values in the West Broadway area are hard to assess.

"There are some very peculiar buildings down there with long bay depths, little natural light and little parking," Prichard said. Few sales have closed recently, which makes it hard to find comparable sales, she said.

Early last year, Makyadath was asking $1 million for his two properties: the 3,400-square-foot Lazar's Bazar at 57 W. Broadway and a 9,000-square-foot martial arts supply store at 79 W. Broadway.

But he doubled the price to $2 million later last year to reflect the rapid appreciation of local real estate.

He said Prichard discussed a price in the $800,000 range for the two properties last summer, adding that he found such an offer "insulting."

Prichard said the developers arrived at values by searching public records and talking with appraisers.

"We did the best we could with no intention to insult anybody, but there's a point beyond market value, which it does not make sense to pay," she said. "A precedent is set, and there's a snowball effect of overpaying for property."

Jo Dee Moine, owner of the 94-year-old Luckey's bar on Olive Street, also said Prichard made an offer last summer, which she rejected.

Moine said the offer was fair, but she doesn't want to sell because she likes her business and wants to be part of the downtown renaissance.

"I had hoped that maybe I'm off the radar - that the big bull's-eye is no longer on my building," she said. But now that the developers want to buy the Atrium, Moine figures they're more eager than ever to purchase her space, just north of the Atrium.

"I think so many people are so happy that (Connor and Woolley are) going to do something with the property they've been sitting on for years and years and years," Moine said. "But does that mean that everyone has to get out of their way?"

Moine questioned the benefit to the community if the city were to force her to sell. What is to be gained by removing one viable, locally owned business and replacing it with a different - possibly not local - merchant or parking spaces or apartments, she asked.

She also wonders how much property Connor and Woolley will ultimately acquire, and whether consolidation under one owner is healthy for downtown.

"How far is this going to go?" Moine asked. "Is it going to be where you can no longer own your own building; you have to be a tenant of Connor and Woolley's?

"Anyone who's within wingspan of Connor and Woolley from here on out should be concerned that they'll want their property next," she warned.

Connor Jr. said the developers are focused on a specific area, and aren't "looking to gobble up additional property to keep expanding the project."

Running Luckey's is Moine's livelihood, and she said she had planned to rent out the building when she retires. She said she's excited about potential enhancements to downtown and is willing to make improvements to her own business.

"I'm not going to run some place that's considered a black eye in the neighborhood," she said.

Local retailers and restaurants will play a large role in the redevelopment, Connor Jr. said, but he declined to comment about the potential for any existing uses downtown.

"It just irks me a little bit that they're not involving us in what is their plan, so we can all get excited and get behind it," Moine said.

The project is still evolving, Connor Jr. said. "As we move along and we have a concrete project, more details will be out in the public," he said.

Robert Williamson, owner of the office space at 860 Olive, immediately north of Cafe Paradiso, said he wants to see an integrated plan and evidence that each element will succeed in Eugene.

Williamson, an 81-year-old retired optometric physician, worked in his Olive Street property for 40 years until he retired about a decade ago. He hasn't had any trouble finding tenants for the small, two-story space.

Williamson was practicing at his downtown office when urban renewal swept through the downtown in the 1970s.

"The purpose of urban renewal was to clear out old deadwoods," he said. "What happened is it cleared out some good businesses."

The Connor-Woolley-Opus proposal "is just another plan, and you can't really make a judgment about whether it's going to work," he said.

Williamson referred to the project as a "stealth plan," that is hard to visualize in its entirety.

Williamson had planned for his office building to be part of his estate and have ownership pass to his children after his death.

"If the kids inherit the property, they don't have to pay any capital gains tax," he said, adding that the property has appreciated considerably in the past 30 to 40 years.

"We don't want to sell it," Williamson said. Early last year, Prichard made an offer, but Williamson turned it down because it was an option agreement, involving rent payments.

Reporter Edward Russo contributed to this report