The Columbia Gateway Urban Renewal Agency granted Rapoza Development another year to obtain financing for construction of an upscale hotel on the Granada block in The Dalles.
John Lee, principal for VIP Hospitality, who has partnered with Rapoza, told the agency at Monday’s meeting that trying to get $15-20 million to build a Hilton Garden Inn in a small town with limited visitor traffic was difficult.
He said there were 27 proposed projects in the state, most involving much less money, and only three were under construction.
“It is difficult to do hotels; if it wasn’t everybody would be doing it,” he said. “We are really going to get this done but we need more time.”
After hearing Lee’s presentation about the boutique hotels that his company had built, some of which they also managed, the agency board decided to grant Rapoza until the end of 2014 to begin purchasing properties.
Under the prior timeline, construction was set to begin by summer 2014 and be completed about six months later.
The directors had been urged to go in that direction by: Jim Broehl, a former city councilor; John Nelson, a former member of the planning commission and urban renewal advisory committee; Chuck Covert, chair of the Main Street Committee and NAPA owner; Luise Langheinrich, owner of Boulder Path Designs; Dean Dollarhide, a broker for State Farm Insurance; Celeste Thomas-Hill, a representative from Mid-Columbia Medical Center; and Lisa Farquharson, director of The Dalles Area Chamber of Commerce.
“Anything that can bring more people to downtown is so important,” said Langheinrich. “What else do we have in the pipeline? We are hurting in terms of the ‘black holes’ (empty stores) downtown with nothing. One year is really a small amount of time when looking at the future of downtown.”
Director Bill Dick agreed with that assessment and made the motion Dec. 9 to extend the deadline for Rapoza to Dec. 31, 2014.
“Things take time and I think this project is worthy of more time,” he said. “I can’t sit here and vote for blight [denial of extension]. I think this is the best game we’ve got going and I think it’s a winning project. It takes something that’s a little like East St. Louis and turns it into our best block — how can you say no to that?”
He is one of the city councilors who make up the board for urban renewal, which is chaired by Mayor Steve Lawrence.
“These are the kinds of investments that make our community the unique place it is,” said Director Dan Spatz, who seconded Dick’s motion.
He said the Granada Theater was 84 years old and had fallen into disrepair after failing as both a business and a nonprofit.
Under the deal with Rapoza, the character of the historic theater will be left intact and it will be renovated.
“I’m very, very concerned that if we change course now with the money we’ve invested, we are one day going to see the Granada fall,” he said.
The agency owns four properties that will be purchased by Rapoza for the development. The first will be the Recreation Building — to be demolished — and parking lot for $475,316, with a credit of $10,000 for past taxes that have already been paid.
Also slated for purchase by the close of 2014 is the Granada for $365,406. As part of the deal, the historical characteristics of the theatre must be preserved and the agency will spend $200,000 to upgrade the HVAC and sprinkler systems.
The Blue Building will be sold for $380,000 and the Commodore II parking lot for $102,000.
Director Carolyn Wood said development of the Discovery Center had taken seven years, which was not unusual for a sizeable project. She said the city had nothing to lose by granting Rapoza more time since no other developer had stepped forward with plans to revitalize that block.
Dan Durow, city economic development specialist, told the agency in July that 75 percent of the buildings on that block are vacant or underutilized.
Lawrence reminded the agency board that Rapoza had already been given multiple extensions on finalization of agreements to facilitate the development. Even after almost four years of collaboration, he said the city had still not been provided with proof that significant progress had been made toward bringing the project to fruition.
Director Tim McGlothlin said the city had required Rapoza to rework its plans several times to deal with archeological issues and accommodate changes in location, so another delay request was understandable.
The latest model for the hotel has 117 rooms, a roof-top terrace, outdoor pool, banquet facilities, exercise-workout facility, restaurant, lounge, and multiple meeting places. Between 200-500 people can be accommodated at conferences, which Jens Von Gierke of Wave Hospitality, also a partner with Rapoza, told the agency in July would bring business to other hotels in town.
McGlothlin said “perseverance” had saved the Columbia Gorge Regional Airport from closure and made it a successful operation and Michael Leash, the local representative for Rapoza, had also exhibited that trait, which made him more likely to triumph.
“I really want to see something happen in downtown,” he said. “We have to do something and this is the most viable alternative in this moment.”
Lawrence, who is a managing board member for the Civic Auditorium, ran a 2012 campaign for office in opposition to spending urban renewal dollars on new projects until existing historic structures had been renovated. Joining him on that platform was Councilor Linda Miller, who voted against the extension in her role as an agency director.
She serves as the city’s representative on the agency’s advisory committee and questioned why that group existed if their recommendations were not followed. Five members of the committee — Greg Weast, Gary Grossman, Mike Zingg, Chris Zukin and Richard Elkins — were present and spoke out against the extension unless Rapoza made a sizeable and non-refundable deposit.
Weast said while opponents had not come forward, many residents disagreed with tying up urban renewal funds for four years on behalf of one project.
Lawrence had made similar comments and warned the agency board that there would be backlash from a decision to extend Rapoza’s timeline.
“I just don’t think it’s been done right and that’s what your facing if you’re go on with this,” said Lawrence.
“I don’t feel there’s been any significant financial commitment to the project by you,” said Zingg. “Without that, I will not be for it.”
Several members of the advisory committee said there was no way to know if other developers would have stepped up to revitalize the Granada block because it had been tied up in negotiations with Rapoza for so long.
“I hope you, as a developer, can do a better job with communication so we aren’t beat up on the street,” Weast told Leash.
Rapoza representatives said regular updates on the progress being made to bring the project to fruition would be communicated to Nolan Young, with manager, and the agency.