New Redmond Hotel still for sale

Published 12:00 am Tuesday, January 26, 2016

The city of Redmond persists in its goal to resurrect the New Redmond Hotel as a focal point in a redeveloped downtown.

The goal is proving elusive, however.

Two firms may be interested in buying the building , and two attempts to sell it in the past 1½ years have fallen through, said Heather Richards, community development director for Redmond.

“What we’ve heard is that the city’s program that we put together for it is very attractive,” she said Friday.

An offer to buy the 87-year-old building at 521 SW Sixth St. expired in fall 2014 when the prospective buyers, Mark and Leisa Bates, of Hillsboro, could not find bank financing. A subsequent offer from another potential buyer fell through in late summer 2015 due to personal reasons, Richards said.

“They were established hotel developers, a great match, but they had to pull out,” she said.

One local developer and another from the Willamette Valley are reviewing the property, Richards said. She declined to identify them. The city solicited their interest in the property late last year, she said.

“A boutique hotel is a niche market,” Richards said. “Not every developer feels comfortable doing boutique hotels.”

The hotel figures prominently as a focal point for drawing visitors to downtown Redmond, city officials have said. City programs would allow a developer a tax credit of up to 20 percent of costs to renovate the building, which is listed on the National Register of Historic Places.

“We have a combination of grants and loans that we’ll bring to the project,” Richards said. “We’ll come in as a public partner.”

The second and third floors hold a combined 48 rooms; business tenants occupy the second floor, and the third is mostly empty, Richards said.

The Bateses, who renovated what became the McMenamins Rock Creek Tavern in Hillsboro, reportedly offered $6 million for the 38,368-square-foot building. The property, on the market since 2005, is assessed by Deschutes County at a market value of $1.7 million. A group headed by Brad Evert, of Bend, purchased the property in March 2004.

The ground floor is occupied by Red Martini Wine Bar & Grill; Oishi, a sushi restaurant; and AK’s Tea Room. A boutique hotel would contribute increased foot traffic for those businesses and others downtown, Richards said.

“It’s a priority project for the city,” she said, “and we do have resources to (bring to) bear.”

— Reporter: 541-617-7815, jditzler@bendbulletin.com