The resurrection of the New Redmond Hotel in downtown Redmond is on hold — for now.

Heather Richards, the city’s community development director, confirmed Thursday that the hotel’s proposed sale to Hillsboro’s Mark and Leisa Bates has fallen through.

“Their contract has expired,” Richards said about the Bateses, who own a boutique brownstone hotel, The Orenco, in Hillsboro. “Venture Four (the Bateses’ real estate redevelopment group) entered a purchase sale agreement with the sellers. That was meant to close shortly before Thanksgiving, but they were not able to secure bank financing.”

Mark Bates, who renovated what later became McMenamins Rock Creek Tavern in Hillsboro, acknowledged the passed deadline as a “hiccup,” but said he and his wife are still committed to the project.

“This is a complex deal with a lot of moving parts,” said Bates, who has been renting a home in Redmond the past four months, in part to focus on the New Redmond Hotel project. “We’re continuing ahead full blast.”

Bates said he fell just short of what the bank wanted in terms of equity for the project. He said his deal to acquire and renovate the 86-year-old building was for approximately $6 million, and he was exploring other avenues to raise capital.

“I’d be happy to discuss the project with anyone who wants to own a little piece of history and shares our common vision,” Bates said during a phone interview Friday afternoon. “We don’t have a long ways to go (in terms of money down).”

Crowdfunding — online fundraising — could be one way to raise the remaining needed funds, Bates said, citing the $6.3 million McMenamins raised to help finance a $26 million project in Bothell, Washington.

“We’re fully committed to this,” Bates reiterated. “We’ve got a team every day working on a deal. … My vision is really clear for what I want this to be for the community and for other business. We know how to run hotels, and we know how to renovate them.”

Viewed as a potential game-changer for Redmond’s downtown core once redeveloped, the long-standing New Redmond Hotel was most recently bought by a group led by Bend’s Brad Evert in March 2004. (The building became the “New” Redmond Hotel after it replaced the Redmond Hotel, which burned down in 1925.) Evert and his partners have had the 38,368-square-foot building on the market since 2005.

“Hotels, for lack of a better word, capture people downtown,” said Redmond city Councilor Joe Centanni. “You get people downtown and then they wander around to other stores. … A (downtown hotel) really helps boost everything and makes our other small businesses more desirable.”

Despite the hotel’s most recent setback — a proposed $3.6 million sale in 2006 dissolved over parking concerns — all parties involved, Bates included, remain optimistic on the property’s future.

“It’s very unfortunate it didn’t work out,” said Evert, who did not disclose the proposed sale price, but had the building listed for sale for $2.7 million in 2012. “But we’re really excited to be working with new prospects. … This project is going to be very beneficial to downtown Redmond once it opens.”

The city, through the use of urban renewal money, can offer interested parties up to 20 percent of redevelopment costs — capped at $2 million — to turn the property into a boutique hotel. Those funds would come in the form of a no-interest loan that would not need to be paid back for 50 years.

The hotel project may also be eligible for the city’s Jumpstart Forgivable Loan program, which provides $1 of public money for every $4 of private funding, up to $500,000.

“What we’ve learned through this most recent process is that this is a very intriguing project,” Richards said. “The bank is very interested and supportive.”

“I can’t say who, but there are other established hotel operators interested in the project,” Richards added. “It’s a good market and people are doing their due diligence.”

Even with more parties coming to the table, Bates sees his group as the best fit for what looks to be a multimillion dollar project after the final sale and build-out costs are tallied.

“This isn’t an easy thing to do,” said Bates, who still lists the New Redmond Hotel as a future project on his Venture Four website. “I’ve got a special skill set. I know historical renovation, and I know how to operate a boutique hotel. It’s not like bringing in a Sleep Inn.

“But,” Bates acknowledged, “the seller may have a different viewpoint. Everything’s for sale, obviously, and they want to sell it. Someone could come along with $6 million burning a hole in their pocket.”

— Reporter: 541-383-0305,

beastes@bendbulletin.com