Sunshine Mill owners seek $250,000 URA grant to vet hotel plans for silo redevelopment

Sunshine Mill representatives asked the Columbia River Gateway Urban Renewal Agency on Tuesday for a $250,000 grant to complete architecture and engineering work for a proposed Sunshine Mill Winery Hotel and Retreat Center that would reuse the mill and silos as hotel rooms and event space.

The proposal, presented by Natasha Scove, general manager of Sunshine Mill and daughter of the property owners, calls for about 80 hotel rooms in the mill and silos, a rooftop bar and restaurant, a spa, pickleball courts, meeting and retreat space, and expanded retail and event programming. Scove said the team’s current estimate for full development costs is roughly $30 million and that the group expects to seek bank financing, tax-credit programs and local gap funding as the project advances. “We are asking the Urban Renewal Agency for a $250,000 grant to completely vet our engineering and architectural designs,” Scove said during the presentation.

A feasibility study by Saddle Peak Hotel Advisors, represented at the meeting by owner Chris Krause, found market demand for an upper-upscale hotel in the Columbia River Gorge and recommended a product positioned above the region’s existing 2–3 star lodging. “I do believe there is strong demand if he’s able to execute and deliver the appropriate product type for the market,” Krause said.

Why it matters: agency staff and board members said the project could bring tourism dollars, construction work and permanent hospitality jobs to The Dalles, but they also cautioned the board against committing substantial subsidy before seeing detailed cost estimates, financing commitments and final engineering. The proposal would involve reuse of a historic industrial site, complex structural work on concrete silos and coordination with state and federal funding programs, making the project larger and riskier than many routine urban-renewal requests.

Details presented and questions raised Natasha Scove reviewed the property’s history, existing businesses and past agency loans. She said the Sunshine Mill businesses have produced wine and operated a tasting room and events space for more than a decade, employed as many as 127 people at peak, generated what she described as about $100 million in revenue over 15 years, and have invested millions locally in contractors, suppliers and artists. She told the board the owners repaid agency loans related to the building purchase and improvements and are now seeking funds to complete the next-level engineering and architecture necessary to attract traditional construction financing.

On the technical side, Scove said Miller Engineering performed a structural analysis of the mill and silos, including a rebar-density survey using a scanning technology. The engineers created a digital structural model that the team says reduces uncertainty about how the existing concrete might be adapted for hotel use. Krause and the applicants said those findings, together with the market study, informed the decision to pursue a roughly 80-room, higher-end lodging product rather than a smaller, lower-tier hotel.

Financing and timeline The presenters outlined a staged development plan: a letter of intent and conditional commitment, further architecture and engineering, initial small-scale construction and then larger construction starting in 2026, with an optimistic completion target in 2027. Scove said the team expects development costs around $30 million and estimated bank financing could cover roughly 60% of the project; Krause and other presenters listed potential additional sources including new market tax credits, enterprise zone tax credits and other federal or private programs. Tom Peters, who described decades of experience in hotel financing, told the board that projects like this can be financed and that “financially, it doesn’t bother me,” while noting that exact funding strategies would depend on final cost estimates.

Board and staff response Board members and staff pressed for specifics. URA board member Stacy Coburn praised the presentation but asked about lending conditions and the broader economic context. Board member Kristen Lilbeck asked whether the requested $250,000 would be lost if the project does not proceed; Scove replied that the funding is intended to remove unknowns and that the team accepts some risk if the project does not go forward.

Staff and several board members suggested the $250,000 ask is premature as an upfront grant and urged the applicants to return with a more detailed cost and financing package. A staff member summarized the likely next step as additional vetting and work with agency staff; no board vote or formal commitment of funds occurred at the meeting. The presenter and staff left the meeting with the expectation that the applicants and agency would continue to refine the cost, risk and funding plan and return to the board for later consideration of gap financing or participation.

What was not decided There was no formal action or vote on the $250,000 request at the meeting. The board did not approve any subsidy, and staff did not promise a specific funding pathway. Several board members said they were generally supportive of the concept but wanted stronger evidence of bank and partner commitments and clearer engineering deliverables before allocating Urban Renewal Agency funds.

Next steps Presenters said they plan to complete full architectural and engineering work and to work with local and national advisors on financing. Agency staff said they would work with the applicants to determine what information the board would need for a future request and bring the matter back at a later date if and when the applicants submit a formal funding request.