Deschutes, Redmond renew talks

Published 5:00 am Sunday, April 22, 2012

Deschutes County officials are talking with the city of Redmond about a proposal to turn the historic Evergreen Elementary School into a county facility.

The deal appeared to have died last summer when the county spent $1.4 million to purchase a bank-owned commercial building in Redmond to convert into offices. But it was resurrected earlier this year during a series of meetings between Redmond City Manager David Brandt, developer Tom Kemper and Deschutes County Commissioner Tammy Baney.

Kemper is a Portland investor and developer who co-founded the Portland real estate investment firm SKB, or ScanlanKemperBard Co. After leaving SKB, Kemper founded KemperCo. LLC in 2000.

Kemper sought an exclusive agreement with the city to redevelop Evergreen Elementary and possibly trade it for the county-owned commercial property, known as the Design Center, according to emails and other documents released to The Bulletin in response to a public records request.

Brandt said Friday the city has not signed a contract with Kemper.

On Wednesday, Interim County Administrator Erik Kropp would not say whether Kemper is still involved in the negotiations.

“At this point, we’re working through the city,” Kropp said.

Commissioners Alan Unger and Tony DeBone said they did not know who Kemper was and were unaware that Baney and other officials were discussing a deal with him.

“You’re telling me things I don’t know,” Unger said last week, when asked about Kemper’s proposal.

DeBone had a similar reaction. “I don’t know Tom Kemper, and I’m not privy to what you’re seeing now,” DeBone said.

However, Baney wrote in a Feb. 29 email to Kemper that she had just informed the other two commissioners and they supported the discussion.

“I met with our board and they are open to the discussion,” Baney wrote.

DeBone and Unger said they were unaware of the decision to have Kropp, rather than county property and facilities director Susan Ross, deal with Kemper and Brandt.

DeBone and Brandt said last week that the city and the county are not in formal negotiations on a real estate deal for Evergreen or the Design Center, although DeBone said the county is in the process of determining the comparative costs to develop each site.

A Redmond service center

County officials have discussed for years the idea of a consolidated Redmond service center for state and county departments that provide food stamps, mental health care, family planning and nutrition for low-income mothers and children. The county has a memorandum of understanding with the Department of Human Services that stated the county would “build and maintain a facility to open in 2012.”

Both the Design Center and Evergreen would need to be remodeled, and official statements suggest the fixes at Evergreen might be more expensive. Then-County Administrator Dave Kanner said last summer it would cost $1 million to $1.5 million to remodel the Design Center. Brandt said in January the city estimated it would cost $6 million to renovate the school.

School a white elephant?

Last year, as the Redmond School District prepared to sell Evergreen Elementary to the city, the school district’s operations director, Mike McIntosh, said its old boilers and other infrastructure were a drain on the district’s finances. Evergreen was built in 1920.

The expense has proved daunting for the city, too.

“Looking at our long term budget situation, I am having a hard time finding debt service for our portion ($200,000) for the next five years in any case,” Brandt wrote in a March 13 email to Kemper. It would cost the city $200,000 annually to pay for the renovation of the first floor, where City Hall would be located.

In an earlier email to Kemper, Brandt outlined other problems with Evergreen.

“There is some sentimental community attachment for the gym, but keeping it is quite costly,” Brandt wrote. “As with the school building itself, there is a lot of sentiment that it should be saved but absolutely no public interest in putting tax money into it. So at the end of the day, without a lot of creativity, the building (both of them actually) is likely to end up a pile of bricks.”

Talks began in February

Kemper and Brandt’s correspondence about Evergreen Elementary began Feb. 1, when Kemper emailed Brandt to suggest they drive over to look at an unspecified county building.

On Feb. 21, Kemper emailed Baney to pitch the idea of trading the Design Center for the second floor of Evergreen Elementary.

They had met recently at a housing project in Madras, and had a mutual acquaintance named Jon, Kemper wrote. Jon’s identity and relationship to Kemper and Baney was unclear, and Baney did not return calls for comment.

“I am also a friend of Jon’s and actually a former partner of Bob Scanlon,” Kemper wrote. “I am talking with David Brandt at the City of Redmond to redo the Evergreen School building into the city offices. … With further due diligence, the Design Center deal apparently is not the optimal solution for the (sic) providing office space for the county’s needs.”

Kemper proposed that he would purchase Evergreen from the city, develop it and transfer the second floor to the county, in exchange for the Design Center and an unspecified amount of cash. Kemper viewed the county’s Property and Facilities Department as an obstacle to the deal.

“I am also aware of the county’s real estate person not being a proponent of the Evergreen option and this would have to be addressed in some manner,” Kemper wrote.

On Feb. 22, Baney wrote back to Kemper, saying she had a Feb. 24 meeting scheduled with Brandt. Later that day, she wrote to Kemper, “I had a great meeting with David today. I am open to the idea of looking more into the Evergreen site, but need to do more fact finding on my side.”

Brandt also emailed Kemper and wrote that Baney had assured him Ross, the county property and facilities director, would no longer be involved in the negotiations.

“(Baney) understood the issue with Susan Ross and would have you work directly with the Assistant County Administrator, who although he isn’t a real estate person, is a generally good guy,” Brandt wrote.

Baney wrote in a Feb. 29 email to Kemper, “I met with our Board, and we are open to the discussion.”

Later on the same day, Kemper emailed Baney to request a meeting.

“Should we try to do dinner Tuesday, the 13th with Jon?” Kemper wrote. “Let’s keep the dialogue going on Evergreen.”

On March 13, Brandt reported back to Kemper that he had just taken Kropp, the interim county administrator, on a tour of Evergreen Elementary.

“The County seems genuinely interested in considering an alternative to the Design Center,” Brandt wrote in an email to Kemper. “Given their space needs I believe the most viable approach would be for them to absorb the entire site.”