A representative of Lowe's will attend the Albany City Council's regular meeting at 7 p.m. Wednesday at City Hall to discuss his company's request to modify its development agreement with the city.
The city has fulfilled its end of a 2011 agreement to help the home improvement giant open a 150,000-square-foot store in Albany by Dec. 31, 2014; Albany's contributions included spending more than $4 million on a punch-through of Oak Avenue between Ninth Avenue and Pacific Boulevard.
Lowe's is contractually on the hook for $1,000 a day in late penalties, up to $2 million, for every day after Dec. 31, 2014, that the store is not open.
Lowe's is asking the city for a one-year extension on the deadline, the waiving of the late fees during that year, and the right to open a store that's 35 percent smaller than the size agreed upon in 2011.
City Attorney Jim Delapoer told the council at their Monday work session that it essentially has three options regarding Lowe's request:
1) Do what the company wants.
2) Stick with the original agreement.
3) Arrive at some sort of compromise.
Delapoer's suggestion was to listen to Lowe's rep Mark Stoner on Wednesday, ask questions, then give city staff direction as to what the council wants from any negotiations that ensue, with an eye toward getting whatever the city can get without causing Lowe's to abandon the project.
Mayor Sharon Konopa noted the council's objective in entering into the deal with Lowe's was to stimulate job creation. Following a question from Councilor Rich Kellum, Delapoer said the city had not researched what the net effect on jobs would be, given that a store like Lowe's would tend to force smaller operations out of business.
Agreeing to Lowe's modifications would have an economic impact on the city in the form of fewer jobs in a scaled-down Lowe's, and in lower property tax revenues, building permit fees and transportation system development charge payments.
Stoner, the person who will visit the council meeting Wednesday, is the real estate director for the West for Lowe's Home Improvement.
In an email last month to City Manager Wes Hare, Stoner said "the project was delayed for three principle reasons. Lowe's dramatically slowed its new store program. ... Secondly, Lowe's Oregon stores had a significant drop in sales do the economic recession. ... Thirdly, Lowe's several years ago started redesigning its prototypical buildings and only recently have we decided which prototype to develop in small markets such as Albany."
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