Runners take part in the 10K race at the Lake Run.
It was a beautiful morning for a jog on Saturday, May 6, as hundreds took part in the annual Lake Run.
The event included 5K and 10K races as well as a festival at Millennium Plaza Park. It was sponsored once again by Northwest Housing Alternatives, a nonprofit that supports affordable housing in the region.
Check out results and more photos on A3 and A4!
Assistant Editor
The North Anchor development is slated to have a hotel, restaurant, retail and housing.
A project to build a new hotel and mixed-use complex in downtown Lake Oswego appears headed for another delay.
After the Lake Oswego City Council approved an extension for construction of the North Anchor project from January of this year to June, developer Urban Development Partners said during a city redevelopment agency meeting Tuesday, May 2, that it has yet to secure financing for the project due to economic conditions and that it doesn’t yet have a clear picture as to when it will break ground.
The development company plans to return to the council at a subsequent meeting with an extension request.
The project is slated to add an 83-room hotel and a mixed-use development with 67 residential homes, 6,000 square feet of retail and 75 parking spaces — including 61 in a structured parking facility — at First Street and B Avenue. The city’s redevelopment agency, which includes city councilors, approved the sale of the property for just under $5 million in late 2021. The agency also agreed to contribute $2 million for permit fees, system development charges and construction costs, meaning it netted about $3 million. The city had owned the parcels since 2012.
Nick Santangelo, with a real estate investment company CBRE, provided some insight at the meeting regarding the current market conditions. He said that equity and debt providers sit in a defensive position due to rising interest rates and lenders are hesitant to invest in projects.
“The project itself was received very well by the capital markets to include equity and debt. It’s just the timing wasn’t right. The yields don’t make sense. It makes it hard for these deals to pencil,” he said.
Further, he said that negative headlines regarding Portland’s issues impact investments in the area.
“It is a real concern and something I deal with multiple times a week is getting lenders and equity partners who are calling from different markets … They are wondering what is going on in Portland. We have some really ‘headline risk’ we’ve dealt with,” he said, later noting that Lake Oswego has its own brand that can be highlighted as a differentiating factor.
While understanding UDP’s predicament, Lake Oswego councilors expressed apprehension that the project can’t yet go forward and wanted more certainty and communication.
“This could be years to go. At some point we have to build this thing,” said councilor Massene Mboup.
Councilor John Wendland noted that the city has worked on this iteration of the project (previous efforts to redevelop the site date all the way back to 2004) for about a half decade and that a previous partner, Atticus Hotel, pulled out in 2020.
“We gave too long of a leash and we should have cut it off sooner. In hindsight, it’s always 20/20, but we were let on a path of ‘Oh we can do it. We can do it.’ And boom, we get the call saying ‘We’re done.’ That cost us three years probably,” Wendland said, adding that he hoped the city would not have to wait two-to-three more years for the project to actualize.
UDP principal Eric Cress emphasized that the development company is committed to seeing the project through no matter how long it takes.
“These next few months and a couple years, we may see some difficulties and face inevitable challenges, but it will pale in comparison to the long-term impacts to the coming decades and how the buildings will (positively) affect the experiences of the people in Lake Oswego,” Cress said.
Mayor Joe Buck hoped for more clear and consistent communication from UDP.
“We would appreciate good communication and openness. We have to know what’s going on or it’s really difficult to understand the position other than in vague terms,” he said.
In the meantime, UDP plans to tinker with the project to try to make it more attractive for financiers, but emphasized there is no desire to make drastic changes. Sarah Zahn, the chief operating officer for UDP, said that the apartment project in particular was expensive and mentioned compliance with the city’s development code as a challenge.
“I don’t want to make that request (for revisions to the project) until I fully understand what that means for the project, what that means for the city and if that is going to generate positive movement for the project,” Zahn said.
Assistant Editor
Lake Oswego City Manager Martha Bennett gives remarks during the groundbreaking ceremony for the upcoming Lake Oswego Recreation and Aquatics Center in March.
The city of Lake Oswego is positioned to weather continued inflationary pressures and a potential recession, but may face some tough choices if current economic conditions persist, according to City Manager Martha Bennett.
Bennett clarified the local government’s financial position during a budget committee meeting Thursday, May 4, that included deliberations on the proposed 2023-25 biennium budget.
Bennett said Lake Oswego can manage challenging economic pressures — like interest rate hikes and continued inflation — because it has robust reserves, is dependent on property taxes rather than more fluctuating revenue sources, has a labor agreement that caps salary increases and plans to keep expenditures down this biennium.
“The City has seen cost increases for labor, goods and services, and capital projects because of inflationary pressures. However, at present, those costs are manageable, largely due to strong fiscal practices in past biennia,” Bennett’s budget message reads.
However, the city manager raised concerns about the subsequent biennium and the potential need to reduce expenditures, raise revenue or pull money from reserves if costs remain high. Bennett in particular noted 3.5% inflation as a bellwether regarding future choices, but added that economists diverge in their forecasts.
“If we can get under 3.5% we are going to be OK. If it stays above 3.5% we’re not going to be OK and we’re going to have some discussions about increasing revenue or reducing services,” she said at the meeting.
Though the city is not adding many new programs due to economic conditions, it is funding the Lake Oswego Recreation and Aquatic Center and the first phase of the Rassekh Park project, which will add a new skatepark.
Costs for both projects came in higher than anticipated this year — leading the city to delay Rassekh Park development and to try to find additional funding for the recreation center. The city allocated over $4 million in additional capital funds for the center and $3.5 million to Rassekh, in part by reducing transfers from the general fund to the street fund from $3 million to $2 million. Bennett also said any spare dollars found were directed to the parks and rec projects. There also will be $5.7 million in funding for pedestrian safety improvements.
“The addition of the LORAC will also substantially increase the proposed budget of the Parks and Recreation Department. The proposed budget reflects $2.37 million in revenue from a variety of passes, entrance fees, class and program revenue, and an operating contribution from the Lake Oswego School District. This additional revenue covers approximately 85 percent of the estimated operating costs of the LORAC, and the balance is addressed by an allocation of $430,000 in general fund operating revenues,” the proposed budget reads.
Further, the city is hiring the equivalent of about 21 employees, largely to staff the center with lifeguards and other positions (many of which are part-time).
“We didn’t do that lightly. It’s the lowest we think we can add but, unless we add the staff, we can’t operate the programs that are going to take place in this new building,” Bennett said.
Councilor John Wendland clarified that the skatepark project is a high council priority because the city has not had a skatepark in town for years since the previous facility was replaced by the city’s operations and maintenance facility.
“We figured out how to fund part of Rassekh, part which is the skatepark, and then we will put on hold the remainder of Rassekh Park until we have funding identified,” he said.
The city is also budgeting for an additional plan examiner — Bennett noted a shortage in that field and complaints about examination delays.
In a more advantageous economic environment, Bennett surmised that the city could have spent more money on pathway projects, behavioral health support, library programming and/or fire-prevention efforts.
When asked about a potential replacement of the city’s wastewater treatment plant, Bennett said that project won’t show up significantly until at least the next biennium. That project may appear in a subsequent budget under materials and services rather than a capital expense, she added. However, the council also has yet to officially decide whether to proceed with that project.
“It’s a $631 million commitment of the city that’s not going to show up in a traditional way because we’re going to pay a third party to design, build and operate that plant for us,” Bennett said.
The city’s biennium budget, which is $456 million as proposed, is poised for approval at a subsequent budget committee meeting before it goes to City Council for final approval.
