Emergency session called to discuss Red Lion deal

An emergency executive session to discuss a possible purchase of a portion of the Red Lion Hotel property will be held by the Medford City Council at 7 p.m. Monday in the Medford Room at City Hall.

The council — which also makes up the Medford Urban Renewal Agency — will attempt to discover the purchase price that DHD LLC would pay for the Red Lion.

DHD, a company formed by Lithia Motors executives Mark and Sid DeBoer, hasn't disclosed the purchase price for the almost 8-acre hotel property, though it is listed for $3.5 million. DHD wants the city to purchase a less valuable, 3.29-acre portion of the property for $1.6 million.

Many city councilors have been troubled by DHD's failure to disclose the purchase amount.

In particular, councilors say the city could be embarrassed if it pays more than half the cost of the property while getting less than half the value.

The proposed purchase of the Red Lion property by the city is not part of MURA's revitalization plan. So the money for the property initially would come from the city's contingency account.

MURA plans to turn its share of the property into a 200-space parking lot. As part of the deal, the hotel could use up to 100 spaces during up to five special events a month.

Councilors, acting as the MURA board, on Thursday approved altering MURA's revitalization plan so it can purchase the property from the city.

Councilor Dick Gordon, who is chairman of the MURA board, said the price that the DeBoers are paying for the Red Lion isn't necessarily the major concern for him.

He said he's more interested in the kind of money that will be sunk into the Red Lion to improve it after the purchase.

"As long as we know that this will manufacture an additional $3 million to $4 million private investment," he said.

Gordon said the city has spent $10.2 million for the Evergreen parking garage and has offered a $2 million incentive to build something around it.

Pacific Retirement Services, Rogue Disposal and Procare Software have joined forces to build a 117,000-square-foot office building around the garage.

Gordon said he views the Red Lion deal as something similar to the Evergreen deal, though he acknowledges details of what the DeBoers plan to do with the property haven't been disclosed yet.

Gordon said a lot is riding on the executive session because the council wants to make sure that it can present a strong case to the public as to why this is a good deal for the city.

"It may torpedo this deal, but I hope it doesn't," he said.

Reach reporter Damian Mann at 541-776-4476 or dmann@mailtribune.com.

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