Register Guard Article: First on Broadway

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New downtown mega-project

Developers propose to build 300 apartments for students on 5 acres at 13th and Olive

BY EDWARD RUSSO

The Register-Guard

Published: (Tuesday, Jan 31, 2012 11:43AM)Midnight, Jan. 31

Five acres in the heart of downtown — including the parcel containing PeaceHealth’s empty Eugene Clinic building — would be redeveloped with apartments for 1,200 college-age students, according to developers’ plans.

The project would be built on mostly parking lots and feature more than 300 apartments in three connected five-story buildings and two parking garages.

The proposed developer is Capstone Collegial Properties of Birmingham, Ala. Capstone expects to spend $80 million on the development, said Conrad Sick, a Capstone executive based in Lake Forest, Calif.

“It will be a keystone property at the gates of downtown,” he said Monday.

Eugene developer Steve Master had secured an option to buy the property from PeaceHealth, but as soon as he completes the purchase in June, Capstone will buy the property from Master and proceed with construction, Sick said.

In a press release, Master and Sick said construction could start in June, with the first apartments finished in fall 2013. The proposal would still need to be reviewed and approved by city officials. The developers also hope to pursue a 10-year property tax exemption on the buildings, which would require City Council approval.

PeaceHealth has owned the property since 1989. The site sits on parts of two blocks at 13th Avenue and Olive Street.

PeaceHealth executives on Monday confirmed the pending sale, but declined to disclose the price. Sick also wouldn’t give a price.

Master and Sick presented the development plan last Wednesday to the Downtown Neighborhood Association.

Neighborhood Chairman David Mandelblatt said about two dozen residents attended and they were “extremely surprised” by the plans.

Some residents were concerned about the effect of having upward of 1,200 students living downtown.

Downtown now has about 2,500 residents, Mandelblatt said.

“It’s not like we are anti-student,” he said. “But you are talking about a 50 percent increase in population, and that raises a bunch of questions.”

The neighborhood group supports Lane Community College’s construction project on West 10th Avenue near the Eugene Public Library, Mandelblatt said. That project will have classrooms and apartments for 250 students.

Mandelblatt said he and the neighborhood association’s secretary, Sherrill Necessary, plan to meet with Master on Thursday to get more information. “We are not interested in opposing downtown development,” he said. “But we need to understand better what it means.”

Mayor Kitty Piercy also has questions about the proposal.

“We have been interested in more people living downtown or close by in terms of our revitalization efforts,” she said in an e-mail. “On the other hand, that’s large student density.”

The old medical clinic building, previously owned and operated by a doctors’ group, would be razed to make room for the student housing. At one time, the old building contained a 55-bed hospital on the third floor.

PeaceHealth spokeswoman Jenny Ulum said parts of the medical clinic, which was emptied at the end of last year, date to 1922. Additions came in the 1960s and 1970s.

In recent years, PeaceHealth and the city presented the property as a possible site for a new Veterans Affairs medical clinic, but the VA wasn’t interested.

Capstone has built one other student apartment complex in Eugene — the 252-unit University Commons off Garden Way. Sick said the firm has sold that complex.

Last year, Capstone, along with Valeo Companies of Lake Forest, joined with the Eugene Family YMCA on a proposal to build student apartments and a new Y on the Civic Stadium property.

Master, meanwhile, one of Eugene’s busiest developers, had teamed with Fred Meyer on a proposal to build a Fred Meyer-anchored shopping center on the Civic parcel, which is owned by the Eugene School District.

The school board rejected both of those proposals, along with a plan by Save Civic Stadium.

Master reportedly explored the possibility of putting the Fred Meyer on PeaceHealth’s downtown property, according to sources familiar with the inquiry, before deciding to work with Capstone on the student housing deal.