The Canby City Council last week finalized its sale of the former library property to Oregon City Brewing Co. — which plans to redevelop it as a brewpub, family-friendly arcade and retail space — despite fierce, eleventh-hour opposition from a small coalition of local community and business leaders.
The city agreed to sell the property, which has sat empty since the library moved to its current digs on Northeast 2nd Avenue, for $500,000, plus a promissory note of $100,000 that would come due if O.C. Brewing fails to make at least $1 million in improvements. The company has estimated it will cost approximately $2.3 million to renovate the aging structure and execute its vision for the property.
O.C. Brewing owner Bryce Morrow said last month that they hoped to hit the ground running once the sale was approved, and have the bulk of construction completed by April 2022.
The move represented a major step forward in the city’s years-long effort to see one of the most important corners in downtown Canby transformed into an active use.
The property lies at one corner of Wait Park, one of Canby’s most popular play areas for children and the staging ground for many of the city’s signature events, including the Independence Day Celebration and Light Up the Night.
It also forms a border to the Canby Farmers’ Market on Saturdays in the spring and summer.
Seeking to brighten up the building’s beige façade, city leaders also seemed to voice some of their vision for the property last year, when they contracted muralist Mario De Leon to paint pictures of happy children and flowers on the exterior windows.
The city had sought formal proposals for redeveloping the property on three prior occasions: in the summer of 2017, the fall of 2018 and last February — just before the coronavirus pandemic hit Oregon.
The property had attracted significant interest, along with a wide variety of financial offers and proposals — ranging from multi-use retail and office space to a health clinic to a daycare and preschool facility.
In each case, the City Council appeared to favor active uses that would draw people into the downtown core and, hopefully, have a positive impact on other local businesses.
In 2018, the city even began lease negotiations with another group aiming to establish Canby’s first brewery — Canby Brewing Co. — before the talks broke down for unknown reasons.
Based on an analysis by The Canby Current, Canby appears to be the largest city in the state without its own commercial brewery or brewpub, with the notable exception of Woodburn. It does boast the FOB Taproom at Canby Place, which operates on a similar model — though it does not serve food or brew its own beer.
Last Wednesday, after the unanimous vote to approve O.C. Brewing’s purchase offer, Councilor Greg Parker commented on what he saw as the broad popularity of the “Beer Library” concept, calling it “one of the most universally liked things the City Council had done in years.”
The proposal did appear to have broad support from Canby residents on the Current‘s social media posts and in local Facebook groups.
But fierce opposition to the move has arisen in recent weeks, led by Peter Hostetler, owner of Equipment NW and former vice president of local construction firm KHC Inc., and Tyler Smith, a local attorney and former city councilor.
At the Feb. 17 meeting, Hostetler appeared in the form of a letter read by Mayor Brian Hodson, and Smith spoke in person, expressing his own objections as well as those of several of his clients.
The previous week, Smith had also submitted a letter requesting dozens of documents and correspondence related to the sale and the city’s efforts to market the property dating back to 2017.
Opponents questioned the city’s selling price, which was about half of the $950,000 the property was appraised at four years ago and well below its assessed value of $1.4 million.
“And that’s for two lots in one of the most prime blocks in our entire city,” Smith said in public comment last week. “I would submit to you that this should be very disturbing to the public.”
Hostetler and Smith have also raised questions about the process, claiming that the city may have failed to follow public notice laws and that its negotiations lacked transparency.
Both have said they believe the property would have sold at or even above its appraised value had it been listed on commercial real estate marketplaces like LoopNet and CoStar.
“This on-again and off-again process with no professional, no public marketing and basically, what I think amounts to a sort of a secret marketing … is not how we should be stewarding or disposing of public property that the taxpayers have paid for,” Smith said.
Finally, Smith’s letter suggested city staff failed to ensure a competitive bidding process by re-engaging with parties that had previously expressed interest in buying it — including Brant Walker and The Canby Clinic, Hostetler and Smith’s own firm.
“What we’d ask is that you hold off on this fire sale, wait and publicly market this so you can get a fair, open and transparent competitive market price,” Smith said.
City leaders countered that the years-long process had included every opportunity for interested parties to submit offers.
The decision to follow a request-for-expressions-of-interest (REFI) process rather than publicly listing it with a Realtor had been deliberate, officials said, to give the city some say in what the property would become.
Speaking as one of two new members of the Canby City Council, Chris Bangs said he “was satisfied that we did look at a lot of different options, and this option brought the best value for the city.”
“Value is measured in more than just dollar amounts,” he noted. “We probably could have made more money if we just wanted to sell the building to anybody, but we wanted to sell our downtown, and I think that brings greater value to our town.”
With the sale finalized, where Smith, Hostetler and other opponents may go with their challenges is unclear. The records request is still pending, and litigation may be an option.
Asked by the Current on Feb. 11 whether his clients were considering taking their objections to court, Smith declined to comment.
“It always depends on the response from the government on those,” he said. “But in this or any specific case, I could not reveal any attorney-client privileged information.”
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