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EWEB mulling price for sale of complex.

Byline: Edward Russo The Register-Guard

CORRECTION (ran 3/4/04): The Eugene Water & Electric Board is considering raising electric rates this spring by an average of 4.6 percent. A story on Page D1 on Wednesday had an incorrect amount.

If the Eugene Water & Electric Board agrees to sell its riverfront property for a hospital, EWEB's ratepayers shouldn't have to foot the bill to help the utility move, General Manager Randy Berggren said Tuesday.

McKenzie-Willamette Medical Center, after considering a variety of potential hospital sites in Eugene, has expressed interest in EWEB's property near downtown as a potential spot to replace its Springfield hospital.

EWEB, which previously has studied moving operations from its ill-fitting downtown site, is interested in exploring a possible sale to McKenzie-Willamette and its Texas-based partner, Triad Hospitals.

EWEB commissioners met in executive session Tuesday evening to talk about the subject with Berggren, who would represent the board in negotiations.

Afterward, Berggren declined to comment on whether he has arrived at a potential sale price. He said the utility needs to get a property appraisal of its 29 acres, most of it along the riverfront, but with a few acres underneath and west of the Ferry Street Bridge viaduct.

In an interview earlier in the day, Berggren said EWEB's commissioners have established that any sale must pay for a move so electric and water rates do not have to be raised. A move depends upon EWEB getting full value for its property, he said.

While EWEB does not want to raise rates to cover a move, the utility is considering raising rates this spring an average of 5.7 percent to pay for a host of improvements to the electric system.

Two years ago, EWEB consultants concluded that the cost of maintaining and replacing aging buildings, traffic constraints and access to the narrow site, most of it sandwiched between the Willamette River and the Union Pacific railroad tracks, and the rising commercial value of the riverfront land made it advantageous to move some or all of the utility's functions.

The consultant said moving could save EWEB as much as $6.5 million over 30 years, assuming that the utility could sell the riverfront site at full value.

However, the price to relocate and build elsewhere would be substantial, the consultants said, putting it at more than $40 million.

A property appraisal would play a role, though not dictate, how much EWEB might get if it decides to sell. A property appraisal as part of the 2002 study placed the value of EWEB's land and buildings at $31 million.

Berggren said EWEB has looked for a new home since the study, but so far has been unable to find a site appropriate for the utility's needs.

However, this time, the city of Eugene, which wants a hospital south of the Willamette River and in or near downtown, could help EWEB find a new home, he said.

McKenzie-Willamette's tentative interest at least presents EWEB with a possible buyer, the first step toward a potential sale and move, Berggren said.

If a deal is reached, EWEB, McKenzie-Willamette and the city of Eugene would benefit, he said.

EWEB would get to build a more efficient headquarters and maintenance facility somewhere else, Berggren said, McKenzie-Willamette would have a place to build a new hospital, and Eugene would get a hospital in the downtown area.
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Title Annotation:Utilities; The utility will not ask customers to pay for a move to make way for a hospital, the general manager says
Publication:The Register-Guard (Eugene, OR)
Date:Mar 3, 2004
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