Urban Renewal District Agency Board

CITY HALL 411 SW 9th STREET REDMOND, OR 97756 541.923.7710 FAX: 541.548.0706 info@redmondoregon.gov redmondoregon.gov URBAN RENEWAL DISTRICT AGENCY BOARD July 14, 2026 Council Chambers • 411 SW 9th Street BOARD FOLLOWING THE P.M. JULY 14, 2026 MEETING AGENDA MEMBERS COUNCIL MEETING Ed Fitch Chair I. CALL TO ORDER / ESTABLISH A QUORUM Shannon Wedding Board President II. MINUTES A. Minutes of May 12, 2026, Board Meeting Clifford Evelyn Member III. ACTION ITEMS John Nielsen A. Term Sheet Guidelines for Grant Award to Natural Grocers not to exceed Member $500,000 for Redevelopment of 732 SW 6th Street Kathryn Osborne Member IV. ADJOURN Jay Patrick Member Cat Zwicker Member Regular Council meetings are broadcast live on COTV11 – BendBroadband Channel 11 beginning at 6:00 p.m. on the 2nd and 4th Tuesdays of each month. Rebroadcasts are scheduled for the non-meeting Tuesdays at 6:00 p.m. The City of Redmond encourages all citizens to participate in its programs and activities. This meeting location is accessible to people with disabilities. Requests for accommodation may include sign language interpreter service, assistive listening devices, materials in an alternate format or any other accommodation. If any accommodations are needed, please contact the ADA Coordinator at 541-504-3036 or access@redmondoregon.gov. Requests should be made as soon as possible, but at least 3 business days prior to the scheduled meeting. The City of Redmond does not discriminate on the basis of disability status in the admission or access to, or treatment, or employment in, its programs or activities Page 1 of 10 Redmond Urban Renewal District Agency Board May 12, 2026 Regular Meeting Minutes Council Chambers & Remote Video Conferencing https://www.redmondoregon.gov/government/city-council Present: Clifford Evelyn, Ed Fitch, John Nielsen, Kathryn Osborne, Jay Patrick, Cat Zwicker Excused: Shannon Wedding Staff Present: City Manager Keith Witcosky; Deputy City Manager Steve Ashworth; Deputy City Recorder Kayla Duddy; Airport Director Zachary Bass; City Attorney Keith Leitz; Deputy City Manager/Chief Financial Officer Jason Neff; Public Works Director/City Engineer Jessica MacClanahan; Communications Director Heather Cassaro; Economic Development/ Urban Renewal Program Manager Chuck Arnold; Urban Renewal Program Analyst Meghan Gassner; Finance Director James Wood; Client Systems Administrator Tyler Roppe; Police Chief Devin Lewis; Planning Director Kyle Roberts; Budget Analyst Herlinda Corn; Engineering Technician Veronica Reinertson - CALL TO ORDER/ESTABLISH A QUORUM Mayor Fitch called the meeting to order at 6:06 p.m. MINUTES A. Minutes of January 27, 2026, Board Meeting Board Member Nielsen moved, seconded by Board Member Zwicker, to approve the minutes of the January 27, 2026, meeting, the motion passed. (Evelyn-yes, Fitch-yes, Nielsen-yes, Osborne- yes, Patrick-yes, Wedding-absent, Zwicker-yes) BID AWARDS / BID REJECTIONS A. Contract Award for Design-Build Services for the Downtown Ice Rink Project to Kirby Nagelhout Construction Company Urban Renewal Program Analyst Meghan Gassner requested approval of a Design-Build Services contract with Kirby Nagelhout Construction Company (KNCC) for the Downtown Ice Rink Project. Six proposals were received, three firms were interviewed, and KNCC was recommended by both staff and the scoring committee based on their experience, creativity, and familiarity with public recreation projects in Redmond. Downtown Urban Renewal Advisory Committee (DURAC) Chair Brandon Cook-Bostick reported that DURAC recommended approval, citing KNCC’s strong relevant experience, project approach, and consistent high scores across the evaluation criteria. Cumming Management Group Director Wayne Powderly noted that a kickoff meeting with KNCC and its design team, Blaze Control Architects, is scheduled for May 13, 2026, with a target delivery of the ice rink before Thanksgiving 2027. Board Member Osborne moved, seconded by Board Member Nielsen, to award the contract for design and construction of the Downtown Ice Rink Project to Kirby Nagelhout Construction Company and authorize the City Manager to sign the contract, the motion passed. (Evelyn-yes, Fitch-yes, Nielsen-yes, Osborne-yes, Patrick-yes, Wedding-absent, Zwicker-yes) Mayor Fitch called for public comments. Redmond resident Trevor Johnson commented on a possible downtown parking garage with mixed-use, multi-zone development. City Council Regular Meeting Minutes May 12, 2026 Page 1 Page 2 of 10 ADJOURN The meeting adjourned at 6:16 p.m. Prepared by ABC Transcription Services, Inc. Reviewed by Kayla Duddy, Deputy City Recorder APPROVED by the Board and SIGNED by the Chair this 14th day of July 2026. Ed Fitch, Chair ATTEST: Kayla Duddy, Deputy City Recorder City Council Regular Meeting Minutes May 12, 2026 Page 2 Page 3 of 10  CITY HALL 411 SW 9th STREET REDMOND, OR 97756 CITY OF REDMOND 541.923.7710 FAX: 541.548.0706 info@redmondoregon.gov redmondoregon.gov STAFF REPORT DATE: July 14, 2026 TO: Urban Renewal Agency Board THROUGH: Keith Witcosky, City Manager Steve Ashworth, Deputy City Manager FROM: Chuck Arnold, Economic Development/Urban Renewal Program Manager SUBJECT: Term Sheet Guidelines for Grant Award to Natural Grocers not to exceed $500,000 for Redevelopment of 732 SW 6th Street Report in Brief: This item requests the Redmond Urban Renewal Agency (RURA) Board approve a Term Sheet for a grant award to Natural Grocers not to exceed $500,000 in support of the redevelopment of 732 SW 6th Street (Property) and authorize the City Manager to execute the final grant agreement. Background: The Property consists of 1.20 acres, a 15,000-square-foot commercial building, and approximately 50 parking stalls. The building was previously occupied by JoAnn Fabrics for approximately eight years. However, the parcel has remained vacant since that company’s corporate bankruptcy in 2025. The proposed partnership is unique for RURA. Urban Renewal incentive agreements are typically guaranteed by a lien on the improved property. In this proposal, Natural Grocers will provide a corporate guarantee to back compliance with the performance metrics required by the grant agreement. The partners and their roles in this Project are as follows: Current Owner: Steve Wernke (Sisters, Oregon) Developer: Mark McPherson, President, Equity Ventures, Inc. (Topeka, Kansas) New Owner: Joint venture between Current Owner and Developer Tenant/Borrower: Natural Grocers, Inc. (Lakewood, Colorado) The Current Owner will partner with the Developer to form a joint venture (New Owner) that will hold title to the Property. The Developer has completed more than 60 Natural Grocers projects nationwide and will complete the redevelopment. The Tenant/Borrower is Natural Grocers, a publicly-traded (NYSE: NGVC), family-led national grocer with 168 stores in 21 states. The Project proposes transforming the long-vacant building into a full-service boutique natural foods grocery store, generating new tax increment, foot traffic, and activation along the Highway 126/6th Street corridor. Discussion: The redevelopment includes building, site, and interior tenant improvements, as well as modernization of building systems to meet Natural Grocers’ national standards. The New Owner will incur approximately $860,000 in soft costs (developer fees, design, permitting, financing) and will provide a $500,000 tenant improvement allowance to the Tenant/Borrower. Preliminary construction estimates range from $2.4 million to $2.7 million, financed by the Tenant/Borrower using a $70 million credit line with Chase Bank. The Tenant will pay all building expenses, including taxes, utilities, insurance, and maintenance. The lease consists of a 15-year initial term, with two 5-year extension options (total possible term: 25 years). Page 4 of 10 Property Valuation Impacts • Purchased by Current Owner in 2022 for $3,900,000 • Current Real Market Value (RMV): $3,600,000 • Proposed sale to New Owner: $4,800,000 (reflecting lease-secured value) • Projected future RMV following improvements and stabilized retail use: $8,000,000 RURA Proposed Terms: • The Tenant/Borrower is requesting up to $500,000 in RURA incentive funding, structured as follows: • Reimbursement-based grant not to exceed $500,000 or 20% of eligible construction costs • Forgivable over a 10-year term as performance metrics are met • Performance metrics to include: o Continuous operation as a boutique natural foods grocery store o Store design, furnishings, and offerings consistent with Natural Grocers’ national standards o Additional conditions as defined in the final RURA agreement • Tenant/Borrower will provide a Corporate Guaranty • Estimated incremental tax revenue: +$30,000 per year • Estimated ROI (TIF only): ~17 years (comparable to similar RURA project investments) This model aligns with past RURA practice which utilized forgivable or mixed loan/grant structures to incentivize redevelopment of underutilized properties, such as: • 470 NW Fir, nine-unit apartment building construction, project cost: $2.6M, RURA incentive: $455K or 18% of the project • Central Oregon Medical Specialists, medical building expansion, project cost: $6.2M, RURA incentive: $600K or about 10% of the project • SCP Hotel, hotel renovation, project cost: $11.8M, RURA incentive: $3.5M or about 30% of the project Fiscal Impact: The grant funding supports reinvestment in a long-vacant commercial building, stimulates taxable value growth, and promotes corridor revitalization. At full build-out and occupancy, the Project is expected to generate approximately $30,000 in annual tax increment. Based on the investment level and projected increment, the RURA contribution results in an approximate 17-year ROI (on tax valuation alone)—comparable to other RURA incentive projects such as the Central Oregon Medical Specialists Building and 470 NW Fir Apartments. Funding is available for this project through the Urban Renewal Redevelopment Opportunity Fund and is included in the FY 2026/27 Budget. If funded, there are no anticipated short-term (1 to 5 years) impacts to other planned Urban Renewal projects. Alternative Courses of Action: 1. Approve the term sheet and RURA incentive grant of up to $500,000 2. Request more information. 3. Do not recommend the approval of the term sheet and RURA incentive Recommendation / Suggested Motion: “I move to approve the Term Sheet for the Natural Grocers Redevelopment Project at 732 SW 6th Street, including a Redmond Urban Renewal Agency incentive of up to $500,000, and authorize the City Manager to negotiate, finalize, and execute the final grant agreement consistent with the approved Term Sheet.” Page 5 of 10 RURA Grant award consideratio - natural grocers Redmond urban renewal – agency july 14, 2026 Page 6 of 10  TH 732sw 6 St.- Site Specifications BUILDING • Former Joann • 1.20 Acres LOCATION FabricBldg • 50 Parking Slide /2 • 15,000sQFTBlDG spaces Page 7 of 10  Natural grocers THE project • $2.4m to $2.7m project investment • $30K estimate annual tax growth • 17-year Tax valuation ROI • $8m estimated valuation at term completion Slide /3 Page 8 of 10  20% of RURA grant Construction costs performance FUNDING - Not to exceed METRICS $500,000 PROPOSED Would qualify for proportional annual TENANT/ BORROWER provides a Corporate • Continuous, regular operation as a boutique RURA forgiveness over a 10-year term as project Guaranty to back RURA incentive if performance • natural foods grocery store Offerings, furnishings, and INCENTIVES performance metrics are met. metrics are NOT met. store design consistent with other Natural Grocer stores Slide /4 • Additional conditions as defined in final agreement Page 9 of 10 Questions? 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