Development Director Puts Project on Market Track after Two-Year Stint
The path towards realizing the vision of Bend’s Juniper Ridge project is becoming clearer – as much as feasible in the near term – thanks to the help of Development Manager David Ditz, who has spent the last two years tackling thorny land use issues and negotiating implementation of key entitlements for the sprawling property at the city’s north eastern edge.
And as Ditz’s contract at the project executive helm draws to an end, CBN took the opportunity to recap the storied saga so far and look at future prospects from this point forward.
The roots of the Juniper Ridge initiative stretch back to 1990 when the approximately 1,500-acre property east of Highway 97 and north of Cooley Road was given to the City of Bend by Deschutes County.
In return, the County required that the City create a master plan for the site – to be approved through a public process – and that at least ten percent of the land be reserved for parks and open space. In addition, deed language required the land be used for a “public purpose” such as job creation.
To further its goals in an envisaged public-private venture, in 2005 the City selected the Juniper Ridge Partners consortium, headed by Ray Kuratek, as master developer for the project.
The initial focus was to be on some 500 acres off Cooley Road already sited within the Urban Growth Boundary, as part of the overall goal, to cultivate employment, educational and research opportunities. The balance of the property, which would require expansion of the UGB, was anticipated for further future phases.
Nationally-recognized “New Urbanism” design leaders the Cooper, Robertson architectural firm was enlisted to help craft an overarching conceptual plan addressing action goals of creating a varied, sustainable, pedestrian-friendly and energy-efficient development exemplifying best practices to foster employment, educational and research opportunities.
Incorporating traditional town design principles, sustainability, and the use of local materials, the Cooper, Robertson master plan called for a diverse mixture of uses, including a town center, walkable neighborhood shopping areas, office and light industrial, a university district, and a number of residential units (the housing element being anticipated on a longer term horizon requiring assent on UGB expansion).
But by the time the master plan was ratified, the private investors who were to sink substantial sums into infrastructure contributions – with such costs to be recouped through land sale proceeds in a profit split scenario – backed out, citing, among other factors, changing market conditions, eroded potential rates of return, protracted negotiations and some public opposition to elements of the deal.
NEW DIRECTION
In 2007, the City parted ways with the private development group, paying some $2.5 million in exchange for full development rights to the project and ownership of the master plan.
So, the vision embodied in the Cooper, Robertson plan had been approved and accepted on a conceptual level, but the associated land use actions needed to get the ball rolling had yet to be instituted.
Key changes were made, including the formation of the Juniper Ridge Management Advisory Board, comprised of professionals from varied backgrounds with decades of experience in the design and construction of successful large industrial and mixed use projects, reporting to the city manager and city council.
A project executive position was also created, reporting to the board, to steer Juniper Ridge’s further evolution and by early 2009, Ditz – whose 30-year+ experience included leading Western operations for one of the nation’s largest industrial and office developers – was hired to assume the role.
The first step was to create a Special Plan Area (SPA) for the acreage within the UGB, through an amendment to the City development code first rezoning the land’s designation from Urban Area Reserve (UAR) to
Light Industrial (LI).
Associated with this SPA was the ushering in of the Juniper Ridge Overlay Zone, allowing a variety of specific uses in a similar vein to other successful mixed use projects in Bend such as the Old Mill District and NorthWest Crossing developments.
Some 300 acres were set aside for the prioritized first phase “employment sub-district” intended to promote “economical, sustainable, and reasonable growth” by allowing a mix of light industrial uses, offices for research and development, corporate and regional headquarters and accessory uses, with the other 200 acres conceived as accommodating the town center tangent in a further phase.
But zone changes also require sign off from the Oregon Department of Transportation as a state law known as the Transportation Planning Rule (TPR) gives ODOT the authority to approve or disapprove any application for a rezoning of property if the proposed project creates an adverse impact on the state’s roadway system.
Typically, these impacts must be defined, mitigation measures identified, and funding sources guaranteed before ODOT will allow the requested rezoning to be approved.
Growth at Juniper Ridge is set to have a significant impact on the Cooley/97 intersection – enough to require that the intersection be completely redesigned and reconstructed, in what has been anticipated as a $40 million project in itself.
Because the City could not fund this large a project in advance, it needed to come to an agreement with ODOT about when it could generate enough money to facilitate upgrades before the rezone could move ahead.
One of the major hurdles that Ditz has cleared over his tenure has been to craft an agreement with ODOT on how to conduct transportation-related improvements in a phased program.
Some nine months of work went into conducting necessary initial transportation analysis in conjunction with traffic studies specialists out of Portland.
Ditz said, “We also worked with the state bodies such as the Department of Land Conservation and Development and ODOT to get agreement on the methodology of the transportation analysis.
“We found that 14 intersections were likely to be impacted; the biggest being Cooley and 97. To mitigate all these impacts was anticipated to cost around $53 million.
“We knew we couldn’t afford this all at once, so we came up with a proposal to phase in upgrades triggered by the number of trips generated due to development.
“Basically, the theory is that once a certain number of (peak time) trips are generated, we would not be able to get to the next phase of development until the transportation upgrades associated with that volume of trips were complete.
“So rather than all the improvements having to be funded upfront, to some extent we can now pay as we go.
“We knew we had to work with, rather than against, the state jurisdictions and made numerous presentations to the City and ODOT, whose regional manager I must say was great to work with and brought a lot of thoughtful comments to the table.”
Early phase roadway improvements include a roundabout at 18th and Empire Boulevard and upgrades to the
Empire interchange.
State law does not allow the City’s General Fund to be used for development costs, so the City has utilized a combination of tax increment urban renewal funds and line of bank credit on attractive terms to pay for streets and utilities needed to serve businesses at Juniper Ridge in the future.
These funds have been used to finance infrastructure costs including a sewer pump station which serves the initial 70 acres and related design and engineering costs.
The City then uses a combination of tax revenues, impact fees collected when building permits are pulled, and proceeds from land sales to pay back the debt.
To date, the City has had sufficient infrastructure in place to allow the sales of acreage to Les Schwab and biotech innovators Suterra, who have both constructed corporate headquarters at the site. Land has also been sold to Pacific Power for a service station to cater to Juniper Ridge’s growth, as well as a future associated building.
THE DEPTH OF THE PROJECT
Other major areas of Ditz’s work in fulfilling his contract remit have been the putting together of Covenants, Conditions and Restrictions (CC&R’s) for the project – including a mechanism for observing design guidelines emphasizing best practices – in conjunction with legal firm Ball, Janick and in-depth financial analyses of the project.
“On the financial analysis side, I have worked on ten or eleven different iterations over the last two years,” said Ditz. “That marked the last phase of my contract, though it has been extended a little to allow time to get the Owners’ Association in place.”
He has also now shepherded through a first phase subdivision plat to the approval stage for lots of varying sizes that will be offered for sale, ranging from one and a half to around eight acres, with all the pieces in place regarding infrastructure logistics covering around 65 acres.
Ditz added, “We are looking for companies that want to build, for example, Leadership in Energy and Environmental Design (LEED) certified buildings or Class A administrative headquarters in high scale development levels.
“Several companies have expressed interest in locating at Juniper Ridge. I was hired to entitle the property, and now that the necessary planning work has been put in place the project is ready and able to accommodate users as the economy improves.”
THE REMAINING VISION
Ditz observed that the remaining two major issues “hanging over” Juniper Ridge in the future include sewer capacity – meaning that development would likely be limited to the initial filing of 75 acres or so until the much-touted North interceptor public works initiative is put in place – and resolution to ODOT’s North corridor strategy involving major highway realignment scenarios.
Notwithstanding those potential variables, he added, “I absolutely believe in this project, which has been conceived as a flagship mixed-use, master planned, walkable community.
“The thinking that went into the plan is good thinking; Juniper Ridge is a long-term project and is perfectly situated geographically and strategically.”
The City is hopeful that it can enter into agreements with other, private, developers for the future anticipated town center, educational, and residential elements of the project, while in regards to the first phase of the employment-related property, local real estate firm Compass Commercial has been hired to broker lot sales, with an expected market launch this summer.
John James, chair of the Juniper Ridge Advisory board and one of the initial members, said that if Bend is going to continue to grow, it’s going to need an employment base and that’s an important vehicle for Juniper Ridge to take.
“Since the advisory board started on this project, around August 2008, we took major action to get a handle on how the process should be managed…the fundamental problem was that the city initially didn’t deal with all the infrastructure challenges, but now we have a project that can help with job creation.
“I’m convinced that if Juniper Ridge hadn’t been there Les Schwab would have gone somewhere else and probably Suterra as well. We need to be patient with the vision of Juniper Ridge, in the long term it will
pan out.”
Advisory Board member Ron Foerster added that development of Juniper Ridge is a long term project and significant progress has been made over the last few years in putting infrastructure in place and securing local and state approvals for development of this property.
“A lot remains to be done to fully develop Juniper Ridge, especially in the area of highway access to the development and the highway improvements along Highway 97 will require substantial funding from the City of Bend and the State. But we have developed a plan for incremental development which will produce most, if not all, of the revenue through land sales needed for these improvements plus the other infrastructure needed.
“I am optimistic that the plan will work and over time Juniper Ridge will become a model business (and eventually residential) community in Bend.
“Over the next one to two years I expect to see several sales of lots to businesses who want to locate in Juniper Ridge. The attraction will be a well planned, beautiful business park, conveniently located near Bend, Redmond and an excellent transportation system.”
Foerster added that the type of businesses the project would likely attract include corporate or regional headquarters of larger companies, start-up high tech companies, companies engaged in light manufacturing, and companies involved in research and development. Some of these businesses might be local who desire to expand or relocate to Juniper Ridge, and others will be coming into the area from other parts of the state and country.”
Compass Commercial Real Estate is the city’s leasing agent for the project. “The goal of Juniper Ridge is job growth and to aid in the long-term economic viability of the region,” said Bruce Kemp, partner in Compass Commercial Real Estate Services. “We plan to work with EDCO, the City of Bend, the Chamber and other economic drivers to identify and specifically target industries and companies for the project, which is the perfect environment to headquarter regional companies like Les Schwab and Suterra.”
“The market is in recovery mode, so we expect the sales at Juniper Ridge to start slowly in 2011 with significant increases moving into 2012,” said Kemp. “As consumer confidence continues to rise and the economy improves, we’ll see more activity in sales and leasing throughout Central Oregon.”
Only the first phase of the employment zone will be open for sale starting this summer. Over the next year, further planning and design work will be conducted for the opening of the next phase of development of the employment zone. When that phase will be opened will depend, of course, on sales of lots in the first phase and the details of the plans and costs for the infrastructure needed to support the next phase.
Bend architectural firm Neal Huston & Associates is the new guy on the block on the advisory board who has spent a lot of time getting caught up in terms of goals and what has been achieved. “A great deal has been invested in the project to date and moving forward the investment needs to be preserved and hopefully built upon as can best be achieved in light of the current economy. Among other things this involves minimizing future economic risks, maximizing the potential value of the property, monitoring and responding to the needs of the community which Juniper Ridge may be able to address, and preserving the high quality proposed for the development from its inception.”
Foerster concluded: “Finally, I would like to state that, in my opinion, Juniper Ridge is a fantastic project for the City of Bend. “It will allow us to attract businesses and other entities (such as a university use) which would not be possible otherwise.
“Given the fiscal constraints faced by the City of Bend and the State, I think it is amazing how much progress has been made in the past several years in making ready a high quality environment for businesses to locate in Central Oregon. I am optimistic that the plans that have been put in place will ensure continued progress.
“I commend all members of the City of Bend, Mr. Ditz, the County, and the State, as well as a number of other community members for their diligence, hard work and many accomplishments that have brought us to the point where we can now begin the development of Juniper Ridge.”
