By MEG LANDERS
Mail Tribune
Lithia Motors Inc. not only will build its new headquarters in downtown Medford but will help orchestrate the entire redevelopment project around it, city leaders and company representatives say.
The nation's eighth largest auto retailer is poised to sign a three-way agreement within weeks with the city of Medford and Medford Urban Renewal Agency to rebuild six blocks bordered by Central and Riverside avenues and Third and Sixth streets, a project known as Middleford Commons.
Lithia hopes to start construction on a new dealership on property on Highway 62 this fall and relocate its many downtown car lots by next summer.
Demolition on downtown buildings could begin by the end of the year, said Mark Rivers, the Boise, Idaho, project developer hired by Lithia.
MURA will start negotiating the purchase of business property within the Middleford Commons area as soon as the development and disposition agreement is signed, expected by Sept. 7, said Dan Thorndike, MURA's attorney.
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"Wherever we can we're going to put retail on the street," said Rivers.
Under the agreement, Lithia will take responsibility for building the park space and the garage in addition to two headquarters buildings: one eight to 10 stories high, the other a two- to three-story building with ground-level retail and an upper-level Lithia conference center, Rivers said. The city's preliminary estimates once put the total project cost at $169 million, including contributions from MURA, the city, state grants, Lithia and other private developers. Rivers said no new cost estimates were yet available.
Medford resident Cynthia Lora said she's attended several public meetings on Middleford Commons and is worried over the fact the city and MURA have not yet fully disclosed details of the project.
"It seems to be almost a done deal," she said. "All the facts aren't out yet but it seems to be a done deal." Lora is a member of the League of Women Voters, but said she was not speaking on the group's behalf.
Lora noted MURA is funded by tax-increment financing (meaning when properties within its boundaries increase in assessed value, MURA gets the difference in taxes paid) and said MURA and the city should be more forthcoming about how they are spending tax dollars on a large redevelopment project.
"All the bits and pieces of it need to be out there for the public," she said.
Thorndike said this public/private partnership is unusual because the private investor — Lithia Motors — already has been identified, helping move the project along more swiftly.
"It makes it a lot easier, and definitely a lot more certain and much faster," Thorndike said.
Thorndike said he did not believe there was a risk the plan would fall through and leave the city with an abandoned project and large debts.
"Worst-possible-case scenario is for some reason it just didn't happen, we just wouldn't spend any more money," he said. There may be some infrastructure improvements made, such as a new water line, but there was no downside for taxpayers.
"It's pretty uniquely a good deal," he said.
The mixed-use project is planned for the majority of the area between Central and Riverside avenues and Third and Sixth streets, currently occupied predominantly by Lithia's car dealerships. Details of retail and residential space are yet to be worked out, said Rivers. MURA will contribute $14.1 million to the project, which will go toward property acquisition and purchasing spaces in the parking structure.
The Greyhound bus station and garage, Sam Jennings Co., and Superior Stamp and Sign will be purchased by MURA, which has said it will offer fair market value and help pay relocation expenses. MURA is in the process of getting appraisals. In addition to those buildings being demolished, most of the buildings occupied by Lithia will be removed.
"It's my goal to actually demolish some buildings this calendar year," Rivers said.
After constructing three blocks of park space along Bartlett Street, Lithia will transfer ownership to the city, with the Parks and Recreation Department providing maintenance. Lithia also will construct some of the surrounding streets and sidewalks, and the Medford Water Commission will replace the small, 100-year-old water lines in the neighborhood.
The housing component is tentatively scheduled to be built in 2009-2010, according to Rivers.
Rivers developed BoDo (Boise Downtown) in Idaho, which also was a public/private partnership with an urban renewal agency. The BoDo takes up four city blocks downtown and includes parking, a hotel, retail, a movie theater, a concert venue and restaurants.
He said in light of legal battles that have occurred with public/private partnerships, Lithia is taking precautions to ensure it's following legal requirements. He said Lithia wants to make sure the project isn't halted by Bureau of Labor and Industries complaints, as has happened with Bella Vita, another downtown development project that has been put on hold pending a decision on whether prevailing wage rates must be paid to work crews.
"We've been working with experienced legal council out of Portland," he said.
Rivers said once Lithia, the city and MURA sign the development and disposition agreement, the first step is to build the new 100-plus-acre Lithia dealership on Highway 62 near the airport. He hopes to speed up the review process with the city and break ground in the next couple of months.
City Planning Director Rob Scott said the project is tentatively scheduled for review by the Planning and Site Plan and Architectural commissions in September and October, but Rivers said Lithia hopes to begin construction this fall and open the dealership in summer 2007.
Meanwhile, Lithia is designing plans for its headquarters, the parking garage and the park blocks. Rivers said construction on the new headquarters should begin within a year.
The project area is between Third and Sixth streets, and is bounded on the east side by Riverside. The western boundary at this time does not reach all the way over to Central Avenue, Rivers said, but includes the Lithia-controlled properties that face Bartlett. He said the project "footprint" may eventually expand beyond that.
The new parking garage is planned for the northeast corner, currently occupied by Lithia car lots, and the corporate headquarters buildings are planned for the area occupied by the Sam Jennings auto parts company.
For the last year, Lithia Real Estate Inc. has leased most of the old J.C. Penney Co. building at Sixth and Central from the Southern Oregon Historical Society, except for the portion occupied by the SOHS research library and collections department. SOHS Executive Director John Enders said as part of the lease, Lithia has an option to purchase the building. Rivers said purchasing and restoring the historic building is part of the plan.
Reach reporter Meg Landers at 776-4481 or e-mail mlanders@mailtribune.com.
Council, MURA look at development pact
The city of Medford and the Medford Urban Renewal Agency are scheduled to sign the disposition and development agreement with Lithia Motors Inc. for Middleford Commons in early September.
The Medford City Council and MURA will review the document at a joint study session Thursday in Room 151, Lausmann Annex, 200 S. Ivy St., Medford.
The Medford City Council is tentatively scheduled to sign the development agreement Sept. 7 Council Chambers, City Hall, 411 W. Eighth St., Medford.
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