By ERIC A. HOWALD
Of the Keizertimes
When it comes to grievances about Keizer Station, parking availability rarely tops the list.
However, Target is now the sole holdout preventing the construction of a new hotel in the area and its issue is parking.
“The only reason Target has given for denying its approval is that they will not approve the amendment until they get an agreement on an amendment that contains their request of an additional 10,000 to 20,000 square feet of retail space,” said Mark O’Donnell, an attorney for Cheo Fong Tzeo, the owner of the property that has long been envisioned as a space for a hotel.
At issue is a condition of an Operation and Easement Agreement (OEA) that would require the hotel to have 235 parking spaces. The language was adopted to cover the parking needed for retail space, but there were no exceptions made for a business as vastly different as a hotel. Even if there were space available to accommodate the sky-high parking requirement, Keizer city code would forbid it. City officials could only approve 120 parking spaces. Tzeo is only requesting 83 parking spaces, or a little more than one space per room in the hotel.
To alter the OEA allowing for fewer parking spaces, Target, Lowe’s and Donahue Schriber Realty Group all have to sign off on the changes.
Keizer Community Development Director Nate Brown was acting as an intermediary in July, but negotiations broke down and now O’Donnell is threatening a lawsuit to get Target to budge.
Last week, O’Donnell responded to a Sept. 16 email from a Target attorney that took Tzeo to task for not properly vetting the property requirements.
“To be frank, it seems your client should have reviewed the recorded documents before purchasing the property, and determined then that the minimum parking ratio might not easily work for the size of hotel it desired to build. Or figured out a way to build the parking stalls it needs—for example, through a parking ramp or parking under the building,” wrote Mike Broich, director of real estate counsel for the Target law department.
Broich states that Target is seeking additional building space for a potential outparcel and expects to approach the city for any development rights it needs.
That will prove easier said than done. To change to the overall square footage of Keizer Station area – it’s currently capped at 975,000 square feet – Keizer, Salem and state officials would have to sign off on the deal.
O’Donnell plans on having Alan Roodhouse, one of the original property developers, testify the language regarding retail parking requirements was mistakenly applied to the hotel property, if the issue makes it all the way to the courts.
O’Donnell said Target’s tactics reflect a sea change in the retail industry.
“Amazon and e-commerce have affected their sales. They now have excess land devoted to parking, which is not being used. So what Target is trying to do is to lay the groundwork to take 10,000 to 20,000 square feet of parking area that is being underutilized” O’Donnell said. “I keep telling them they are delusional, as it is not going to happen for a lot of reasons.”
In the midst of the disagreement, Tzeo is unable to draw down loan funds that would allow the building shell to be built out before rain sets in this winter.
“Work will have to stop pretty soon, as the bank will not disburse funds until this matter is resolved.”
Tzeo is seeking to erect a Holiday Inn Express on the site, which he purchased from the prior owner earlier this year.
Tzeo is an immigrant from Laos who was recruited by the Central Intelligence Agency to fight the Viet Cong. He later moved to the United States. He owned and operated a prior hotel in Canyonville, Ore., which he sold in January 2016. He currently owns a Travelodge Motel in Portland in addition to the Keizer property.