Redevelopment agency approves fifth amendment to North Anchor DDA to facilitate hotel and housing financing

The Lake Oswego Redevelopment Agency (RDA) on Sept. 16 approved a fifth amendment to the Downtown North Anchor development agreement that changes a previously scheduled $749,000 cash payment into a loan to support property acquisition and the project’s financing structure.

Background and rationale Agency staff said the amendment reflects a financing approach in which an external capital investor will acquire the multifamily parcel and UDP (the developer) will lease the property from that investor while maintaining all DDA obligations. That structure is intended to bring additional capital and to help proceed with a hotel component; staff said the multifamily parcel purchase is expected to close in October.

Terms highlighted by staff - The $749,000 city payment (originally to be paid at the end of the project) will be converted to a loan and used for property acquisition and to close any financing gaps for the hotel, if necessary. - The amendment includes a clawback provision: if the investor/developer fails to perform, the city can reacquire the property at the same purchase price less documented hard costs incurred by the investor (for example, demolition costs). - UDP will remain responsible for its DDA obligations; the investor will be aligned to performance via the loan and related covenants.

Board action The agency board authorized the executive director to execute the fifth amendment and to approve a related ground lease. The board voted 7–0 to adopt the amendment.

Agency and council context Agency and city staff said the structure preserves the city’s development goals for a high‑quality, mixed‑use anchor site in downtown, while addressing financing market challenges for a hotel. Agency members asked staff to continue reporting progress and to return if material changes in financing or timelines occur.