Dorn-Platz, City at Odds Over $90M 'Round' Development

BEAVERTON, OR-The Beaverton City Council this week signed off on a notice of default to Dorn-Platz that says the Glendale, CA-based developer is not adhering to its agreements with the city regarding development timelines and paying off construction liens for The Round at Beaverton Central, an estimated $90-million mixed-use development.Dorn-Platz principal John Morrow tells GlobeSt.com that the lone structure on which it could be said to be behind on developing is a parking garage that is currently working its way through the city’s design review process. Morrow says the liens were filed by McCarthy Building and 36 subcontractors when they walked off the job in 2003. Since that time, Morrow says Dorn-Platz has paid off all the subs to the tune of $6 million, but has not paid off McCarthy’s lien because it has its own claims against McCarthy.Morrow says his attorney has made a request to the city’s attorney that their issues be worked out through mediation and has not yet heard back. “The bottom line is we will keep moving ahead; we expect to resolve our differences and complete what we started,” says Morrow.Though staff said she was in the office, Mayor Rob Drake’s chief of staff Linda Adlard did not return repeated phone calls Wednesday seeking more information with regard to the city’s allegations and a copy of the default notice. Designed around a light-rail stop at 12600 SW Crescent Way in Downtown Beaverton, the estimated $90-million office, retail and residential project was started in 1997 by Portland developers Selwyn Bingham and Sylvia Cleaver. They began the project with their own money but were forced into bankruptcy court by the city in 1999 after they were unable to secure construction financing. In July 2001, shortly after the City and creditor Enron Microclimates gained control of the 8.5-acre project in court, they accepted a $2.3-million buyout offer from Dorn-Platz. The project’s first phase of construction, abandoned in 1999, stood half-built, rust-colored and deserted until well into 2002. Dorn-Platz finished the project’s first two buildings–a five-story, 90,000-sf office building and a four-story condominium building–in 2003, and since then has completed another five-story building that houses a two-level 24-Hour Fitness facility. McCarthy developed the first two buildings and Howard S. Wright Construction developed the third building. The 90,000-sf office building is over 90% leased, says Morrow. The condominium sales have been slow, but the units are now 40% sold, and more than 80% of the retail space has been leased, he says. The three stories above the 24-Hour Fitness were originally planned as residential, but were changed to office. One of the three 27,000-sf floors has been leased, says Morrow.