Mar. 31—LA GRANDE — The Urban Renewal Agency will consider funding an agency-initiated project in the central business zone during its regular session on Wednesday, April 5.

The current fiscal budget for the URA designates $500,000 for an agency-initiated project. During the annual retreat in January, agency members learned about two projects up for consideration — the historic former fire station and the Bohnenkamp building. Each project could provide benefits to La Grande, according to City Manager Robert Strope.

Entrepeneur/small-business center in the former firehouse

The city owns the historic firehouse, 1219 Washington Ave., and has a long-term lease with the Eastern Oregon Fire Museum, which itself has a long-term lease with Side A Brewing. Most of the second floor is not utilized and the space has been identified as a potential location for the Ignite Center. The center serves as a one-stop shop to support local entrepreneurs in partnership with Eastern Oregon University's Rural Economic Vitality Center.

The timing for the project would be ideal, Strope said, as the current Ignite Center, 104 Depot St., is closing in June and the Rural Economic Vitality Center recently hired its first executive director.

In 2020, the city worked to develop a project scope and the estimated renovation costs at the time were approximately $2 million.

If the URA chose to invest in the historic firehouse, the $500,000 in funds would be committed as a local match, which are often required when applying for grants. Strope anticipates that it would take a year or longer to secure the full funding.

Strope said city staff would work to leverage those funds to secure full-project funding through state, federal and other grant opportunities. The city funds would be utilized only once full funding was achieved. If the project did not receive full funding then URA members would make a decision on how to move forward with the agency funds.

The project would not result in an increase in property tax, according to the city's economic development director, Timothy Bishop.

"Utilizing the vacant space and preserving the building would be beneficial, and the intent of providing economic development related services could help the overall economic well-being of the community. This indirect benefit, coupled with the requirement that the funds only be used as a match for a significant grant make this a very attractive option," he said.

Apartments in the Bohnenkamp building

The second potential use for the funds would be to enter into a public-private partnership with the owner of the Bohnenkamp building, 1301 Adams Ave., Mavis Hartz, to help develop the third floor for apartments. This would add an additional four apartments to the building, Strope said, which, in addition to the ongoing renovation of the second floor, would bring seven new apartments to downtown La Grande.

Hartz received $75,000 from the Urban Renewal Agency's call for projects and $200,000 from Oregon Main Street for the first phase of renovations. There has also been about $2 million in private investment.

The cost of the total scope of work for the third floor renovations is anticipated to be about $1 million.

If the URA decides to invest the funds in the Bohnenkamp building, the estimated project timeline would be to complete the second floor apartments by the end of 2023 and the third floor apartments by the summer of 2024.

As a condition of the funding, the new units would be restricted to long-term residential units for 20 years from the time of completion, according to Strope. If the apartments on both the second and third floor are not maintained as residential units then the property owner would be required to repay the funds.

"The Bohnenkamp building is a significantly underutilized property that would add much needed residential dwelling units downtown, which is beneficial in many ways," Bishop said. "The preservation elements of the project are in keeping with the intent of Urban Renewal and the property is privately owned, which means the increased investment will translate to additional property tax revenues."

Members will vote on whether to invest the funds in the historic firehouse or in the Bohnenkamp building. Alternatively, URA could decide not to use the funds at this time or eliminate the program funding for the upcoming 2023-24 budget.

Isabella Crowley is a reporter for The Observer. Contact her at {span}541-624-6014 or{/span} icrowley@lagrandeobserver.com.