Home News Local News CITY SELECTS TELOS TO DEVELOP 'hole'
CITY SELECTS TELOS TO DEVELOP 'hole'
By Ray Linker
Observer Staff Writer
A Salem company, which struck out in previous efforts, was selected Wednesday by the La Grande Urban Renewal Agency to develop the former Bohnenkamp Interiors site on Adams Avenue.
Telos Development Co. proposes building ground-level retail spaces and about 30 upper-level apartments to replace the 8,800-square-foot hole in the ground where the store burned down April 4, 1994.
The cost of doing the project is estimated at $4.15 million.
The proposal relies on the company's ability to secure low-income housing tax credits. Those funds are sought across the state in a competitive process.
The deadline for applying for the funds in the current round is August 2003, with the awards being made in October. If the company is awarded the funds, the target date for completing the building would be the spring of 2005.
"There is no guarantee this project would get grants; it's a competitive process," La Grande Community Development Director Mike Hyde said.
But because the community is a difficult area in which to get developers to do projects, La Grande "may be able to attract grants more than some other parts of the state," he said.
Telos beat out Cook Development of Portland in winning the award for the project from the city.
"Either of these groups can get the project done, but Telos seemed to have more of a commitment to the project," Sallie Aldape told the agency.
Aldape is on the urban renewal advisory commission, which voted 4-0 Monday to endorse the selection of Telos to do the project.
The two companies were the only ones to pursue the project after the D.W. Sivers Co. of Portland withdrew from the project. That company won
out over Telos in February's award.
But Sivers, Hyde said, "just couldn't make his financing pan out. The developer hadn't done his due diligence."
Sivers had planned to do first-floor retail and more upscale apartments above.
The city previously chose
Sivers because it thought the company had quick access to funds, which would result in the project being completed sooner.
Now it must go through the long process of applying for tax credits, loans and grants. There could be as much as another year's delay if the tax-credit funds are not secured in this round, officials said.
In its proposal, Telos said it would provide $305,000 as an equity contribution to the project, that the city would contribute the land and $15,000 to help in the pre-development market analysis, with the balance of funds being provided through debt of $625,000, a grant from Oregon Housing and Community Services and from the sale of tax credits ($3,045,000).
By using the tax-credit approach, the housing units would be affordable to people earning at or less than 60 percent of the median family income for this area. That is $23,500 for a family of four. The tax-credit funds are federal dollars administered by the state.
Telos has just completed a similar project in Pendleton. See the project at www.goodwincourt.com on the Net.