Building momentum

Building momentum

The Northgate Centre at the old Medco lumber mill site in Medford has hurdled its fair share of setbacks since it was proposed in 2005, but the project is still moving ahead, developers say.

Within the next few weeks, partners in the property at highways 62 and 238 will submit plan amendments to the city requesting permission to develop about half of Alba Village, the 417,000-square-foot retail center in Northgate, said Steve Morgan, managing partner of the 42-acre retail component.

"The city, as well as (the Oregon Department of Transportation) have been very cooperative, and if everything goes like we have planned ... we hope to be open in late spring 2012," Morgan said.

Approval of the new amendment allowing construction in phases should take about six months, leaving less than a year for construction, Morgan said.

Initially, the Northgate project was going to be developed all at once, and Alba Village was going to feature primarily small and medium-sized stores. But things have changed in the past five years, said Morgan.

"The small spaces are really difficult to rent right now, so we're taking a different approach: focusing on negotiations with major nationwide retailers for larger spaces ... to get the ball rolling," he said.

Over time, Alba Village will fill the smaller storefronts, but for now, Morgan is going to take what he can get.

"This is a completely market-driven development; we're going to respond to the market instead of trying to create a market," he said. "If the economy keeps improving, then we will go along with it."

According to Morgan, the development of Alba Village took a major hit in 2008 when top U.S. investment bank Lehman Brothers filed for bankruptcy and sent Wall Street deeper into crisis.

"We had a committal from a major Wall Street bank to fund the whole thing and we were all ready to go until the financial markets collapsed," Morgan said.

The combination of a lack of investors and retailers rethinking their expansion plans held up the development of Alba Village, and the Northgate project as a whole, Morgan said.

Regardless, Morgan said that he and his partner, San Francisco investor Guy Farthing, recently have formed a joint partnership with a "major publicly traded real estate investment trust," which he declined to reveal.

According to Morgan, the trust has about 60 million square feet of retail space around the country and should be a good long-term fit for the development of Alba Village.

"We're in good shape," he said. "Most all of the major players that were with us two or three years ago have hung with us and we've been very heartened by that."

Morgan declined to disclose the names of possible tenants, because negotiations are still under way, but he said that the speculation and rumors surrounding some of the retailers are true.

Some of the chain stores rumored to be interested in Alba Village include Trader Joe's, Banana Republic, Crate & Barrel and Borders Books and Music.

"There is all kinds of activity going on, and it has the potential to be very exciting," said Steve Neville of New & Neville Real Estate Services in Portland, which is in charge of lining up tenants for Alba Village.

Neville also declined to release any names of possible retailers. Morgan said he is hopeful that once the names of major retailers are released it will attract other businesses to Alba Village, but he did not say when that would be.

As a whole, the 84-acre Northgate Centre was touted in 2005 as the largest redevelopment project in Medford's history, and is estimated to cost $220 million to build. It is expected to provide the Rogue Valley with about 1,700 jobs, 750 of which would pay out a living wage, or about $20,000 annually for a single adult in Jackson County, said a report from Regional Economic Models Inc. of Amherst, Mass.

In addition to Alba Village, the Northgate Centre also will include a 180,000-square-foot light industrial business park and a 220,000-square-foot office park when completed, according to current plans.

In order to accommodate the increase to traffic Alba Village is expected to bring to the area, Morgan and Farthing also must partially fund ODOT projects involving many of the roads that run through and around the "big X" intersection where highways 99, 62 and 238 come together.

A new traffic signal at the intersection of Ross Lane and Highway 238, a right-turn lane for the northbound lanes on Sage Road at its intersection with Highway 238, and a right-turn lane for the southbound lanes of Table Rock Road onto Highway 99, including other changes, are all required to be complete before construction of Alba Village takes place.

The results of a traffic study and concerns about the retail center creating too much congestion for truck traffic from Timber Products and Sierra Pine mills led to the intersection improvements.

According to current plans, Alba Village will sit on the piece of land surrounded by Highway 238, North Central Avenue, East McAndrews Road and Court Street.

"We won't have to drive to Eugene, Bend, Portland or Redding anymore," said Morgan, describing what he saw as the major benefit that Alba Village will provide Rogue Valley residents.

"I think that's a big deal ... right now we don't have anything here."

Reach reporter Sam Wheeler at 541-776-4468 or at

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