A downtown property could be sold to Lithia Motors for about half of what the Medford Urban Renewal Agency paid for it in 2007.
Under an agreement MURA will consider today, Lithia would pay $117,500 for the former Greyhound bus barn at Fourth and Apple streets. In 2007, MURA purchased the property, which totals 0.18 of an acre, for $227,500.
Date Property Seller Buyer Amount Price/square foot
Feb. 7, 2012 3 lots for a park Lithia Real Estate MURA $987,456 $50
Pending Red Lion Inn Mark and Sid DeBoer MURA $1.6 million $11
Pending Greyhound bus barn MURA Lithia Real Estate $117,500 $15
This is the latest land deal the city has undertaken with Lithia or its executives as part of The Commons.
The city has invested $14 million into the downtown redevelopment project, the main public features of which are two parks on two city blocks.
Lithia officials say they have spent $18 million for their headquarters. The Jackson County Assessor estimates the real market value of the Lithia headquarters at $7 million.
Dick Gordon, chairman of MURA, defended the sale price for the Greyhound property, pointing out the property formerly had a large concrete building before it was demolished.
"A great deal of the cost was for the building," he said.
Gordon said projects change over time despite the best efforts to plan ahead. He pointed out that MURA also incurred costs of demolition that would increase the overall price of the property. He said he wasn't immediately able to provide the cost of the demolition.
When the property was purchased, MURA had planned to build a larger Commons project, which has been scaled back considerably since.
Gordon said Lithia might use the property in the short term for an employee parking lot.
In the long term, as The Commons gets built out, the property could become the site for another office building or hotel, Gordon said.
Because Lithia has made a considerable investment in The Commons, the company is a good fit for purchasing the property, he said.
"You have to have a willing buyer and a willing seller," he said.
Councilor Al Densmore said he hadn't fully reviewed the purchase and sale agreement with Lithia, but noted real estate prices have changed markedly since the property was purchased in 2007.
"It's a different market today than it was," he said.
Densmore said MURA is winding down, so it's trying to sell off properties it no longer needs.
Lithia would pay $15 a square foot for the property, which is comparable to rates in the downtown area, according to Bill Hoke, deputy city manager.
However, as with other recent deals, the city has not sought an appraisal.
The county Assessor's Office estimates the land value at $162,480. The bus barn building was valued at $191,920 previously.
MURA, at its noon meeting in City Hall, also will consider purchasing a $1.6 million parking lot that is part of the Red Lion Hotel on Riverside Avenue.
Lithia Motors executives Mark and Sid DeBoer have formed a new company, DHD LLC, to purchase the entire Red Lion property, which is listed for $3.5 million.
As part of the deal, DHD wants to sell off a 3.29-acre chunk of the almost 8-acre Red Lion property. The city, which will effectively be paying about half the listed price of entire property, will receive less than half the land and less than half the value.
The city is paying $11 a square foot for the parking lot from the DeBoer company.
The DeBoers have not disclosed what they actually will be paying for the Red Lion property, nor what their long-term plans are for the hotel.
On Feb. 7, 2012, MURA purchased three lots from Lithia Real Estate for almost $1 million, which works out to about $50 a square foot for the 0.45 of an acre that will become part of the second park in The Commons.
Hoke said that to the best of his knowledge the city is not required to seek an appraisal for a property deal. He said he has used comparable sales in the area to determine a fair price.
Most properties are running in the $12-$15 range, he said.
Hoke said that without some research he couldn't say why the city paid $50 a square foot in 2012 for three lots totaling almost a half-acre in the second park under construction at The Commons.
Reach reporter Damian Mann at 541-776-4476 or email@example.com.