Interest in the industrial site formerly occupied by the Blue Heron Paper Co. is mounting, but the redevelopment process appears likely to remain slow.

Metro did not submit a formal bid for the 23 acres in Oregon City before a Dec. 14 deadline; however, the agency did submit a nonbinding letter of intent stating that it is interested in buying the property, which sits next to Willamette Falls.

“It’s a complex site; nothing is going to happen overnight,” said Jim Desmond, sustainability program director at Metro.

Metro’s vision for the site includes restoring the natural habitat along the river, creating public access to the falls, emphasizing the area’s cultural and historic significance, and potentially partnering with a private developer to spur business activity in downtown Oregon City.

“Even if everything went swimmingly it would take many years to accomplish everything, which we are well aware of,” Desmond said. “This will take some patience and vision.”

The Oregon City site and a 40-acre parcel in West Linn became available after the Blue Heron Paper Co. closed in February. The company had operated its paper mills on those sites for more than 100 years.

Local developer Fred Bruning was one of the first private parties to make an offer for the land. Soon after Blue Heron filed for Chapter 11 bankruptcy, Bruning offered $20 million for both sites, which he planned to transform into the area’s next big destination, featuring retail, office and urban living spaces.

Bruning has since halted work in Oregon City because of what he called a “divisive political environment.” Earlier this year, Bruning’s development company, , pulled the plug on the Rivers project – a 650,000-square-foot outdoor mall that would have been anchored by Cabela’s.

But Oregon City voters recently recalled commissioner Jim Nicita, one of the vocal opponents of proposed funding for the project. That move could signal change in the political climate.

“If they are able to come up with more of a shared vision as to where the city wants to go, we’d love to get re-engaged,” Bruning said.

Although he is not pursuing anything in Oregon City, Bruning said he imagines the Blue Heron site as an ideal place for an aquarium, which would also create demand for hotels, offices and restaurants.

Bankruptcy trustee Peter McKintrick is now responsible for selling assets of the site. And Metro is still negotiating an appropriate sale price, which Desmond said has not been easy.

“It’s difficult to put a market value on the site, but we are in conversations with the trustee and hope that those will continue,” he said.

The agency would use money from a $227.4 million bond measure that passed in 2006. Desmond said that approximately $110 million of that money is still available.

Metro officials are concerned about how much environmental cleanup the agency would be responsible for if it purchased the site, which has endured industrial usage for 170 years. The stability of the site also is uncertain because some of the concrete pilings could be 100 years old.

The site would need to be rezoned for any redevelopment to occur, but Oregon City staffers have already promised to go through that public process if the agency ends up negotiating a deal. Tony Konkol, Oregon City community development director, said city officials are still working with Metro and other stakeholders to see if purchasing the property is a viable option.

“There are many, many issues, and it’s going to take some time to analyze everything and determine if it’s in the public’s interest to move forward,” Konkol said. “If we are successful, it will be a project that is going to take quite a bit of public involvement, and I hope we get that opportunity.”

a Canadian-owned private investment firm, in September bought all of the equipment at the Oregon City site. The company also took on the expenses related to maintaining and decommissioning the Blue Heron site through August 2013. NRI presently is performing some demolition, reclamation and maintenance work, according to Konkol.

“People understand how significant this is – it’s a once-in-a-200-year opportunity,” Desmond said. “As daunting as it is, people see that.”

The post Metro reveals its vision for Blue Heron site in Oregon City appeared first on Daily Journal of Commerce.

Quarrels over a planned development in Oregon City have finally come to a head, and the fate of a city commissioner who criticized the project now rests in the hands of the city’s voters.

Petitioners for the recall of Commissioner Jim Nicita in October collected more than the 1,742 signatures required. But on Tuesday Nicita submitted a “statement of justification” to city and county officials, indicating that he will not give up his position.

Nicita opposed the possibility of urban renewal money being used to help pay for the now defunct Rivers mall project. The $200 million development was planned at a landfill site in Oregon City, but the project fell through in June when the developer pulled out because of division within the commission.

Nicita contends that inherent project risks led the urban renewal commission to demand to see a signed sales contract between the landfill owner and developer , which he says caused negotiations to collapse.

CenterCal Properties CEO Fred Bruning, on the other hand, says he was prepared to enter a purchase agreement, but decided not to move forward without total support of commissioners.

“Had there not been that opposition on the council, we’d be under construction right now,” Bruning said. “I don’t think anyone in the world would buy a landfill site with all the attendant liability and toxics unless they had a deal with the city to develop in the way they wished.”

The petitioners claim the poor economy should have made the Rivers project unassailable because it would have generated more than 1,000 jobs. Nicita, who criticized CenterCal Properties’ request for $17.6 million in urban renewal money for the project, says that construction of the mall during weak economic conditions could have put taxpayers on the hook for millions of dollars if the property’s value didn’t increase enough to meet expectations.

Cabela’s, a popular sporting goods retailer, was planned to anchor the 650,000-square-foot mall. The group pushing for Nicita’s recall has focused on the loss of Cabela’s. The statement printed on the petition – which also will appear on forthcoming ballots – begins its list of reasons that Nicita “needs to be removed from office” with the accusation that he “killed Cabela’s.”

But after receiving reports that some volunteers collecting signatures for the recall effort were approaching people with a pitch to bring back Cabela’s, Nicita filed a complaint to the Clackamas County Elections Office.

“I can’t tell you how many people knew what they were signing, but there is a possibility that they made their petitioning quota via this misrepresentation about what exactly folks were signing,” Nicita said.

Several people working on the petition campaign denied making explicit promises about the future of Cabela’s and the Rivers mall, but acknowledged that the subject was part of the conversation with signatories.

“We clearly told all volunteers and all petition-gatherers that this was not exclusively about the Rivers,” said William Gifford, co-chairman of the petition committee. “It is possible that some enthusiastic people did not present themselves as clearly as they should have, but that was not our strategy.”

Nicita perceives former mayor Dan Fowler as the leader of the recall campaign. The commissioner suggested that Fowler’s landholdings near the proposed Rivers mall site add a personal incentive for Fowler to remove Nicita from office.

“Yes, we have property in the area,” Fowler responded. “Was that property purchased in speculation because of the Rivers project? No. We’ve had a lot of it for a long time.”

Fowler says he simply is eager for job creation.

“We can’t wait another year to get jobs going,” he said. “And I think we can have a person with a greater attitude toward growing the community and wanting jobs.”

Nicita cited his leadership in the recent hire of Eric Underwood as economic development coordinator – a position Nicita had sought filled since 1998 – as evidence of his commitment to job creation.

“I am pro-development, but pro a particular kind of development,” Nicita said. “We need to draw on our competitive strengths. We’re on the edge of the metro area and can become a center for value-added food processing for small and medium-sized farms out on highway 213. There’s untapped potential for jobs in that area.”

The single-issue recall ballots will be mailed on Nov. 18 and must be returned to the Clackamas County Elections Office by Dec. 6, according to Oregon City recorder Nancy Ide. The 200-word statements from both the petitioners and Nicita will be included with ballots.

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The proposed Rivers mall may not be built in Oregon City. But its developer already is looking at other Portland-metro areas that could suit retailers previously courted for the project.

Fred Bruning and his company, CenterCal Properties, the development firm responsible for Cascade Station and Bridgeport Village, pulled out of the proposed $200 million Rivers mall project earlier this summer, citing a “toxic political environment” in Oregon City. But that suburb’s loss could be another’s gain.

“We’re currently looking at a specific site in Washington County and an area in Clackamas County – more specifically, Milwaukie,” Bruning said. “Every site is unique, so they would definitely be different animals than the Rivers project, but there might be some of the proposed tenants.

“We’d identified 550,000 square feet of tenants at the Rivers. So, that’s a lot of retail looking for space in the area.”

The most notable retailer that had planned to open a store in the Rivers mall is Cabela’s, which was going to be the anchor tenant. Bruning said he doesn’t have an exclusive contract with Cabela’s, but he expressed confidence that the hunting and fishing gear retailer has strong interest in the Portland-metro area and in leasing space in one of CenterCal’s developments.

Cabela’s officials won’t comment on the possibility of it occupying one of CenterCal’s properties because there is no official plan in place yet.

Points east and west

The first location Bruning said he is looking at is in Milwaukie’s north industrial area, 265 acres zoned for manufacturing-type businesses. Although he said he doesn’t have a specific site in mind yet, he added that he is intrigued with the area. With 60 businesses already located within its boundaries, the area will be served by the future Portland-to-Milwaukie light-rail line. Also, talks have arisen about the possibility of building a minor league baseball stadium in the area.

Bruning said he hasn’t discussed any specific projects with the city of Milwaukie, but that potential developments would require between 30 and 60 acres. But he wouldn’t go forward with any plans without making sure a project was fully supported by city officials and Milwaukie residents, he said. In Oregon City, councilors couldn’t agree to use urban renewal money to help pay for the Rivers.

Bruning was slightly less forthcoming about the second site he’s eyeing. He said only that it is in Washington County, and that he and company officials are working on early due diligence.

Colin Cooper, planning manager with the city of Hillsboro, said he hasn’t talked to Bruning about any potential project there.

The city of Beaverton has an area in its proposed 997-acre urban renewal area that is similar to Milwaukie’s north industrial area. But Don Mazziotti, the city’s community and economic development director, would neither confirm nor deny whether Bruning is looking at building a project in Beaverton.

“If we did have a discussion, it would have been done in a private setting,” Mazziotti said. “All I can say right now is that we don’t have an application or even a pre-application in front of us.”

Rivers mall project talks could be revived in Oregon City, but Bruning said he wasn’t leaning in that direction.

“Well, the site is still there and there’s obviously a lot of interest from retailers for the site specifically,” he said. “But given the current political climate, it won’t be moving forward anytime soon.”

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A rift over funding for a proposed $200 million mall project on a former landfill site in Oregon City could end in the recall of one of Oregon City’s commissioners.

A petition for the recall of Commissioner James Nicita was filed by Oregon City resident Rex Parks Jr. In the petition, Parks claims Nicita has been unwilling to work with developers on the proposed Rivers mall project.

“(Nicita’s) know-it-all attitude and pie-in-the-sky ideas have seriously hurt Oregon City,” Parks wrote in his official statement for recall, which was approved by the city on Monday. “The longer he remains in office, the longer his signal will be sent that Oregon City is a toxic environment for business or serious investment.”

Meanwhile, Center Cal Properties CEO Fred Bruning believes the political environment in Oregon City is too volatile to move forward with the Rivers project.

“Quite honestly … the political situation isn’t right to move forward,” Bruning said. “I would call it toxic.”

The Rivers was proposed as a 650,000-square-foot outdoor mall anchored by outdoor and sporting retailer Cabela’s. Bruning for years has engaged in talks with the city about the project. Those discussions were relatively quiet until last year, when Bruning and the city started working out financing. Bruning has sought $17.6 million in urban renewal money for the project.

Then in February, as a disposition and development agreement was being developed, Nicita started a push for a charter amendment that would require voter approval for any city-backed bonds like those proposed for the mall project.

A meeting about the amendment proposal drew nearly 400 project supporters wearing stickers that read “1,500 jobs” – a reference to the proposed project’s expected economic impact.

Bruning said both his company and Cabela’s would walk away if the charter amendment were to pass. It didn’t, but in June, Bruning walked away anyway; he cited division in the commission as the reason.

“I don’t want to prejudge anything, but the city and the people of Oregon City need to determine what they want,” Bruning said. “And I just hope the commission can become unified, whether our project moves forward or not.”

Downtown property owner Dan Fowler believes the entire project would suit Oregon City, and the proposed site in particular.

“I think Cabela’s would have been an absolutely great fit – and better yet, they wanted to be here,” Fowler said. “It’s frustrating as a business guy to see someone putting up roadblocks in front of the businesses that want to come to town.”

Fowler, who was Oregon City’s mayor for eight years, understands that elected officials face tough decisions and often must make compromises. But he added that public officials need can-do attitudes.

“We’ve all worked very hard to build momentum within the business community during difficult times, and we need to take advantage of that,” he said.

Oregon City Auditor Nancy Ide said Parks has until Oct. 18 to turn in 1,742 valid signatures for verification. If sufficient verified signatures are turned in, Nicita will have a short time period to either resign or submit a statement of justification, which will then go before voters within 35 days, Ide said.

Nicita declined to comment bypress time.

The post Debate over development project sparks recall effort in Oregon City appeared first on Daily Journal of Commerce.

When officials at the Blue Heron mill announced late last month that it would cease operating immediately, Oregon City lost a tax-generating business and 175 employees lost family-wage jobs.

But when one door closes, another can open.

Local developer Fred Bruning knew Blue Heron Paper Co. had filed for Chapter 11 bankruptcy protection and that the mill’s future was uncertain. He has since offered $20 million for two parcels – a total of 63 acres – owned by the company. Bruning’s development plan would be to transform the swath of land along the Willamette River into the area’s next big destination, with retail, office and urban living spaces.

“I had an idea of what was going to happen so I approached management at the mill recently and gave them an initial offer. I wanted them to know I was interested,” said Bruning, whose development company, , has been responsible for such metro-area projects as Bridgeport Village in Tigard, Cascade Station in East Portland and Gresham Station.

Each of the Blue Heron parcels is in a different city: a 23-acre site sits next to Willamette Falls in Oregon City, and a 40-acre site is on the west side of the Willamette River in West Linn. Both sites were used for paper production for more than 100 years, so environmental issues could arise.

Last week, in the initial bankruptcy hearing, U.S. Bankruptcy Court Judge Randall L. Dunn noted that $20 million would cover the $14 million that Blue Heron owes its creditors – and then some. Wells Fargo is the company’s largest creditor.

But Bruning acknowledged that there are many issues that could change the price and the timing of the purchase. One is the possible existence of pollutants requiring environmental cleanup, which often multiplies the cost of development. The mill itself has lead and asbestos, but a formal site assessment hasn’t been conducted. The Environmental Protection Agency already ruled out the possibility of the property becoming a federal superfund site.

Bruning said that if the company and creditors were willing to sign some sort of a letter of intent to purchase, he would be willing to conduct the phase two environmental assessment. The Oregon Department of Environmental Quality will conduct its own analysis of the site in the coming months.

“We don’t really know what’s there, but we also know that this is a unique opportunity,” Bruning said. “We want to sit down with the bank and the company … and work out a fair process to move forward.”

Bruning’s plan calls for turning the West Linn parcel into a residential area surrounded by mixed-use commercial space. He is even more excited about his vision for the Oregon City site.

“I envision it looking something like the Old Mill District in Bend, except less of a focus of retail,” he said.

A hotel and entertainment complex would be surrounded by retail and office buildings. Bruning also expressed desire to create public access to the waterfall’s base, which has not existed for more than a century.

Another one of Bruning’s projects in Oregon City, a 650,000-square-foot mall called the Rivers being built on a former landfill site, drew heated public opposition because urban renewal money was used. However, this possible new project likely wouldn’t cause a similar stir because only a sliver of the property is included in the current URA boundaries, and including it in the URA project list would require a major amendment and trigger a city vote, said David Frasher, the city manager for Oregon City. That is unlikely, he added.

“I had an upbeat conversation with Fred (Bruning) about this the other day and we both had similar ideas about how to maximize the potential for this project,” Frasher said. “Considering a zoning change will be necessary, and a master plan will be required, the city will work closely with whoever the property owner is.”

Bruning added that he is planning to go forward with both projects and that he intends to engage the public early in the development process.

Frasher said that city officials support the idea, and hope it can help accomplish several city goals. He is hopeful for job creation as well as elimination of some of the pollutants in the air and the water.

“For over 100 years we’ve accepted certain levels of pollutants in exchange for the economic benefits of the mill,” he said. “We are going to be interested in seeing a reduction if this goes forward.”

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