Middleford has eminent domain option: Medford OR Mail Tribune, 9/6/06

But exercising that part of the contract is not likely, says Medford's attorney
By Meg Landers
City officials may use eminent domain if necessary to acquire property for Middleford Commons, according to a contract set to be signed this week.

The development agreement between the city and Lithia Motors Inc. is expected to be signed by the Medford Urban Renewal Agency today and the City Council on Thursday, launching an ambitious building project between Central and Riverside avenues and Third and Sixth streets in downtown Medford. Lithia's headquarters would provide the anchor for the mixed-use urban redevelopment.

The next step will be to acquire property. MURA has agreed to buy several business lots as part of the contract.

"The agency has the power of eminent domain," said MURA attorney Dan Thorndike. "It would have to make a showing that the whole thing's for public (benefit)."

Exercising eminent domain is "not likely," however, said Thorndike, in part because it's an expensive way to acquire property due to possible legal battles.

"It's not to anybody's benefit, really," he said.

The properties to be acquired by MURA include:

• The Greyhound terminal at Fifth and Bartlett streets.
  
• The Greyhound garage at Fourth and Apple streets.
  
• Velma Jennings estate properties, which are surrounded by Riverside Avenue and Apple, Third and Fifth streets.
  
• Property owned by Linda Dupray and occupied by Superior Stamp and Sign, on Bartlett Street near Sixth Street.

According to the Jackson County assessor's map, the two Greyhound tax lots have a real market value of $1,037,830; the six Jennings tax lots have a real market value of $1,110,900; and the Dupray tax lot has a value of $158,550, totaling $2,307,280.

Dave Arrasmith, county appraiser, said the real market value is close to the selling price. He said the county did individual appraisals of that area in 1994 and has been making annual adjustments to the value.

The city is awaiting final details on appraisals, which are being done by Christine Pellett, a local commercial appraiser, said Bill Hoke, the city's economic developer.

Don Denman, Medford attorney in charge of the Jennings estate, said though negotiations had not yet begun with MURA, the fact an eminent domain clause was included in the contract did not cast a cloud over the process.

"That's always available," he said. "That's how the laws work."

Denman said it is his understanding that Middleford would qualify as a public project in which eminent domain could apply.

Dupray could not immediately be reached for comment Tuesday afternoon.

A new home has not yet been found for the Greyhound bus station. MURA has said it is hoping to build a new bus station in conjunction with the Rogue Valley Transportation District transfer station on Front Street.

"I would like to see them locate somewhere close to where they are," said Hoke. He said eliminating the Medford station is not being considered.

Lithia car dealerships occupy the majority of the property within the development area. Lithia has the first option to buy most of that property, which is owned by a car dealership property management company. The dealerships will be relocating to 100-plus acres near the airport.

Under the agreement, Lithia will design and construct its 10-story Lithia Tower headquarters, three blocks of urban park space and a parking structure with at least 400 spaces. There's a $14.1 million cap on MURA's financial contribution, which will go to acquiring the Greyhound, Jennings and Dupray properties, buying the developed park blocks from Lithia, building streets, sewers and utilities, obtaining at least 200 parking spaces and any environmental cleanup. As much as $300,000 will be available to remodel the existing Sixth Street parking structure to create a promenade for pedestrians.

Medford, MURA and Lithia see the redevelopment as a catalyst for subsequent private and public investment in and around the project area.

Hoke said a common misconception is that everything has already been decided about the Middleford project.

"We sign the agreement and that begins the process," he said. The developer, Mark Rivers of Boise, Idaho, will go through the planning and building review process as well as any necessary historic and site plan reviews, he said.

Councilman Jason Anderson has said he will recuse himself when the time comes to make decisions about the Jennings property because Denman is a member of his law firm.

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