- Associated Press - Monday, May 16, 2016

PENDLETON, Ore. (AP) - As street level storefronts in downtown Pendleton have been developed in recently into restaurants, boutiques and salons, most of the second story spaces have remained vacant and unusable.

They’ve come to be known as “ghost properties” to the Pendleton Development Commission, decades out of compliance with occupation codes and in need of tens or even hundreds of thousands of dollars of upgrades before they can be put into use.

The Haw Building is an exemplary case.

The 101-year-old structure on Southeast Court Avenue is home to Prodigal Son Brewery and Pub, one of downtown Pendleton’s newer and more popular restaurants.

But Haw’s unused second floor befits the building’s early 20th Century history as an auto shop. It includes oil stains on the floor and a car ramp.

Having removed the cars and junk that once littered the floor, Prodigal Son owner Tim Guenther sees potential upstairs. While he has no immediate plans to renovate it, Guenther said he’d like to use the second story as an event space, especially since the Prodigal Son has had success in renting its side rooms.

Although the Haw Building’s owners - Mike and Jill Thorne - are amenable to further development, Guenther said his main concern is being able to make a profit out of any investment.

Guenther said the second story would need plumbing, heating, ventilation, air conditioning, emergency escapes, handicap access and access from the restaurant below in order to be useful and meet building codes.

“There are way more ideas than there is time, energy and money,” he said.

Councilor Chuck Wood, chairman of the Pendleton Development Commission, said access to capital and profitability concerns were the biggest reasons building owners were hesitant to develop their second floors.

The commission is trying to alleviate that concern, voting April 19 to officially make second story development one of its top goals.

Commission officials toured second stories across the downtown area and identified 14 buildings with developable space, prioritizing them based on owner interest.

The Haw Building made the list as a high-priority project, joining eight other buildings with that designation.

While the commission has resources of its own to tap into for second story development, it also plans to act as a facilitator in helping owners find the capital to make that development pencil out.

Charles Denight, the commission’s associate director, helped compile a list of funding sources owners could apply for.

Beyond the commission’s own second story development grant, which maxes out at $100,000 or a quarter the cost of the project, Denight said there are other state grants owners can access.

If a building has maintained its historic character and is located in the South Main Street Commercial Historic District, an area centered around the four blocks that surround Main between Dorion and Frazer avenues, owners can apply for a grant of up to $20,000 from the Oregon State Historic Preservation Office.

More importantly, Denight said the office also acts a “gatekeeper” for lucrative federal tax credits.

Additionally, the Oregon Legislature allocated $2.5 million in lottery funds to its Main Street program, half of which is earmarked to rural downtown areas for preservation-based economic development.

That’s not to say that these state grants don’t come with strings attached. Denight said the state could nix any project if it doesn’t do enough to preserve the historic integrity of the structure.

While this might be a problem for the owners of former boarding houses looking to convert their small, windowless rooms into modern apartments, Denight said it was less of an issue for Old City Hall, another building that the city deemed a high priority.

Although a fire last year gutted the interior, Denight said the owners would face less stringent requirements from a historic preservation program because much of it has already been destroyed.

Jose Quezada and his family, the owners of the property, have been vocal about wanting city assistance to turn Old City Hall into an apartment complex.

The Quezadas have already met with City Manager Robb Corbett and hired engineer Dave Krumbein and are working on a complete set of plans to present to the commission.

The city may assist the Quezadas and other second level property owners with obtaining funding for development that could start next year.

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Information from: East Oregonian, https://www.eastoregonian.com


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