The Bend City Council gave its official approval Wednesday evening for the City to buy a large office building in an east Bend medical district to serve as a new administrative headquarters. If the deal becomes final, the building will serve as the future workplace for hundreds of staff who currently run the City from downtown offices at City Hall and nearby buildings.
The move is a major shift in long-term plans to build a massive new City Hall. But staff and most councilors say will save money while opening up development potential on other City-owned properties in prime locations. Councilors say they’re still holding on to the vision of a new public building to house a chambers for City Council meetings in the Bend Central District, a redevelopment area east of the Bend Parkway.
By a 6-1 vote, the City Council gave staff authority to close on the purchase of a four-story, 70,000-square-foot building along with 300 parking spaces on Conners Avenue near St. Charles Medical Center. The Council also authorized the City to issue $25 million in debt to cover the $18 million building purchase, plus moving expenses, furniture and renovations.
The building currently serves as an office for health insurance provider PacificSource Health Plans. Pacific Health Associates, the nonprofit that owns PacificSource, approached the City in June about buying the building.
Earlier this summer, PacificSource notified members it would be pulling out of individual markets across the Northwest. Last fall it laid off about 300 employees, including some in Bend.
The potential purchase wasn’t discussed at a public meeting until Wednesday evening.
Bend Real Estate Director Matt Stuart told the City Council the building is one of only five office buildings in the city larger than 50,000 square feet, which is what’s needed to accommodate City staff.
“This is a really rare opportunity, not something we could’ve planned for — that a whole building of this size could actually come to market here in Bend in any sort of realistic time frame,” Stuart said.
Bend first identified the need for a new City Hall more than a decade ago. Until now, the City was contemplating construction of a brand-new, 85,000-square-foot building as a headquarters and Council chambers, with an estimated price tag of nearly $150 million.
The PacificSource building is larger than what the City needs for staff right now. Stuart told the Council in June the City was “OK in the facilities we’re at” after an analysis said a new City Hall likely wouldn’t be feasible until 2038.
That analysis identified City property on 15th Street as the most feasible place to build a new City Hall.
But the PacificSource building is big enough to accommodate 20 years of growth, according to Stuart. And getting the office space for less than one-fifth of the price of a new City Hall is a big deal, City Councilor Mike Riley said Wednesday.
“I think it makes a ton of sense, primarily because of the fiscal responsibility component,” he said.
Above: The Google Maps location of the PacificSource building.
To pay for the building, the City will sell municipal bonds and pay them back over time at interest. But there’s only so much debt the City can take on at one time, and it’s already financing a new $130 million public works campus at Juniper Ridge, which had Riley and other councilors concerned about the price of the new City Hall project, he said.
According to Stuart, the PacificSource building has a large ground-floor meeting room large enough to be modified into a Council chambers, which would cost less than a new public building. In a text message, Riley said the future Council should “look at all options” for a new chambers, including at the PacificSource building.
Even with the PacificSource purchase, councilors said they still want to build a Council chambers building in the Bend Central District to help spur redevelopment. In the last five years, the City bought up several acres in the area just east of the Bend Parkway, including the former Rainbow Motel that’s now a homeless shelter on Franklin Avenue, and about 1.2 acres a few blocks away along First Street.
Some early property owners and investors have said they’re counting on public investment in a new City Hall as a catalyst for redevelopment in the area.
But during Wednesday’s meeting, he said he sees a “very strong possibility” of turning the First Street property into a Council chambers and community space paired with private development.
But Councilor Gina Franzosa, who cast the lone vote against the building purchase, said the sudden move to buy the PacificSource building has left Central District developers out of the loop.
“It’s leaving developers and property owners just a little confused with more questions than answers,” Franzosa said Wednesday. “Uncertainty just has a chilling effect on investment.”
But most councilors said they believe the purchase will ultimately be a good thing for development in the Central District, reiterating the vision to build some kind of public building there.
“I have a great little vision in my mind of a little civic center-slash-Council chambers on First Street with a really cool-looking bridge right nearby,” said Councilor Megan Perkins, referring to the planned footbridge spanning the Bend Parkway at Hawthorne Street.
The PacificSource purchase also means the City could vacate its current 25,000-square-foot downtown City Hall sooner than expected, spurring early conversations about redevelopment there.
“Ever since starting here I’ve always thought, this is a building full of 9-to-5 workers that is a dead campus part of our downtown, when there is so much potential to build housing, commercial and other things in this area,” Mayor Melanie Kebler said Wednesday.
MAKE LOCAL JOURNALISM HAPPEN
Republish our articles for free, online or in print, under a Creative Commons license.
