Bend city councilors OK $2.9 million property purchase for future housing, redevelopment goals

(Update: Adding video, comments from city councilors)

BEND, Ore. (KTVZ) -- Bend city councilors got an update Wednesday night on temporary housing strategies and also approved two land purchases, one for $2.9 million, to support future housing and redevelopment efforts.

The Rainbow Motel on Northeast Franklin Avenue was purchased for current use as a homeless shelter and city officials said it has proved to be successful for short-term and long-term needs. More recently, the city had the opportunity to purchase property next door.

A second purchase, also approved unanimously Wednesday night, was for about an acre of land on the south end of town, between Les Schwab Tires and the southbound onramp to Highway 97 near Murphy Road.

That 1.6 acre parcel will be used as a safe parking or an outdoor shelter in the future, and the Oregon Department of Transportation may take back the property for a proposed interchange at Murphy Road in three years.

Councilor Megan Perkins said Thursday, "It was really exciting to be able to give an update last night that was really positive news. I think that in the last almost two years that this council has been in office, we've had a lot of plans and a lot of things in the works.

"They're all finally starting to come to fruition, and we're getting people into safe and stable housing. We're getting people sheltered, we're getting them the services that they need so that they can be on the path to self-sufficiency."

The property one door down from the former Rainbow Motel is being leased back to its current occupant, Paulson's Floor Covering, for one year.

Colleague Melanie Kebler said, " The short term for the Rainbow Motel is to continue using that as a shelter. Right now there's 20 plus rooms that are sheltering over 40 plus people. So, we are going to continue that in the near term. In the part of a plan to look at setting city hall or some sort of civic investment into that area."

Councilor Melanie Kebler made this statement and motion Wednesday night:

"Earlier this year, Council acquired the former Rainbow Motel. The purchase met both short-term and long-term community needs, including potential use in the near-term as a temporary shelter, and ultimately to support Core Area redevelopment goals, including affordable housing, civic plaza, or other public uses, such as a new City Hall.

"The City is continuing to identify strategic acquisitions in the Core Area that will serve these same goals, and is a committed partner to the redevelopment of the Core Area and Bend Central District.

"The City now has an opportunity to purchase the property at 184 NE Franklin Avenue, one door down from the former Rainbow Motel. Purchasing the property at 184 NE Franklin furthers the City’s goals of acquiring centrally located, adjacent properties that can eventually serve as a future redevelopment site in the Core Area.

"In the near term, the property will be leased back to the current occupant, Paulson’s Floor Coverings, for one year.  

"I move to authorize the City Manager to negotiate and enter into an assignment agreement, in a form approved by the City Attorney, with Taylor Development, LLC to assume Taylor Development, LLC’s interest under its Sales Agreement with EDIM, LLC for the purchase of 184 NE Franklin Avenue (Tax Lot numbers ending in 4500, 4600, 4700) in the amount of 2.9 million and one dollar plus $10,050.00 in administrative costs, as well as to direct staff to take whatever steps are necessary under the Sales Agreement to Close the purchase without further Council approval, including but not limited to entering into a lease with EDIM, LLC, to occupy 184 NE Franklin Avenue for no less than one year after close, with rent payments to the City equal to $13,196.00 per month."

Minutes later, Councilor Barb Campbell read this statement and motion:

"Tonight, Council has the opportunity to begin the process of purchasing a parcel of land in SE Bend from ODOT. This is a parcel between Les Schwab Tires and the southbound onramp to Highway 97 near Murphy Road. ODOT is taking this property through it surplus property process, and we expect them to make it available for the City to purchase in the coming weeks or months.

"Although we do not have the ability to put this parcel to use right now, I believe this is an opportunity for the City to take a tangible step towards securing property to support our housing goals. The most likely use for this property, over time, is as a respite for unhoused community members seeking safe parking or a managed outdoor shelter.

"Prior to any final decision being made on how to use the land, the City intends to involve neighbors in the discussion. Those will likely be conversations for the next Council to have in 2023. For now, we just want to acquire the land so we have it for use later.

"The property will be subject to a “reversionary clause” which will require the City to transfer the property back to ODOT, if the property is needed for a proposed interchange between Murphy Road and Highway 97, anticipated to be at least three years from now. We may have the opportunity to take full ownership of this property, if it is not needed for the Murphy interchange.

"I move to authorize the City Manager to enter into an agreement, in a form approved by the City Attorney, with the Oregon Department of Transportation for the purchase of approximately 1.66 acres located at 61071 HWY 97, based on the appraised value of $45,000, subject to a reversionary interest in ODOT, and to take all steps necessary to finalize the purchase without further action from Council."