The City and major creditor Enron Microclimates forced the project's previous developer into bankruptcy in 1999, two years after the project began, because the developer ran out of money and was unable to secure construction financing. In July 2001, shortly after the City and Enron gained control of the property in court, they accepted a $2.3-million buyout offer from Dorn-Platz of Glendale, Calif., whichplans to complete the estimated $80- to $100-million project.
Nine months, six extensions and one financier later, the deal is done. Linda Adlard, the city's chief of staff, now says that within four years the completed development will include about 375,000 sf of commercial space, 100,000 sf of retail, 260 apartment units and a parking structure of between four and seven stories with ground-floor retail and top-floor condominiums. Work is expected to resume next week. McCarthy Building of St. Louis is the general contractor.
GE Trust was originally going to be Dorn-Platz's financier for the project, says Adlard, but a few months ago they backed out after the City said it would take no more future liability for the parcel than already exists in law. Lehman Bros. entered the fray after that and has spent the past few months in due diligence.
"They needed to check out the City and Enron Microclimates and we needed to check them out and make sure they planned to be involved in all phases of the development," says Adlard. "So we just had lots of little pieces that needed to fall into place with attorneys all over the United States and it took quite a bit longer than we wished."
'The Round' as its called is now back to being a private project, except that the city will more intensely involved because the plaza will eventually be turned back to the City for ownership and because it's on the light rail line.
"When our mayor came on board 10 years ago we knew this piece of property--an old sewage plant at the time--seemed to be the right spot for a city center and seemed to be something the City could really push forward," says Adlard. "Unfortunately those ideas don't play out as easily as we'd like."
Construction financing for the $15-million first phase of the project is being provided by Preferred Bank of California, says Adlard. "Preferred is a small, privately-owned bank that tends to finance unusual projects," says Adlard. "It's unfortunate that the local banks couldn't have been more supportive."
All indications are that this will be a very successful project. Beaverton is known for high-tech jobs, better schools and a high average income--$130,000 compared to $34,000 in the rest of the state, says Adlard. "It is a fabulous location that will attract great tenants."
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