Jul. 29, 2009--Kennewick could have its long-desired convention center hotel with a real estate deal approved Tuesday by the city council.

The council agreed on a real estate sales and purchase agreement with The Provost Group of Santa Rosa, Calif., for 2.25 acres the city decided three weeks ago that it would offer for sale. The agreed upon price is $563,482.

Jeff Kossow, Kennewick's economic development director, said The Provost Group wants the property developed as a multi-story headquarters hotel, which would be adjacent to the Three Rivers Convention Center in the Vista Entertainment District. The sales agreement allows 180 days for the purchaser to investigate development options.

The hotel would have all the amenities necessary for a headquarters hotel that serves the convention center. The agreement calls for a restaurant, bar, room service, fitness room and pool. A $5,000 deposit secures the sale agreement.

The Provost Group must submit building plans within six months after closing and begin construction within 18 months of closing. The city has the right to take back the property if conditions of the agreement are not completed according to the timeline.

The two-acre sale agreement follows a similar deal by The Provost Group with the city in May for nine acres, also in the Vista Entertainment District near the convention center. The property has not yet been developed.

The Provost Group also cemented a sales agreement earlier Tuesday for 15 acres owned by the Kennewick Irrigation District in the same area. That gives the Santa Rosa property development and management company control of about 27 acres in the Vista Entertainment District.

"This is an exciting time for those of us who've been involved with the convention center," said councilman Steve Young. He was on the Kennewick Facilities District Board of Directors eight years ago when it was created to design, build and open the Three Rivers Convention Center.

Young said the original vision to have a headquarters hotel next to the convention center is finally becoming reality.

Kossow said representatives of The Provost Group have already contacted national hotel chains. "They want to move quickly on this," he said.

Kossow said the deal has been several years in the making. Kennewick city staff contacted The Provost Group during an International Shopping Centers Conference: "We knocked on their door, and they answered," he said.

Also at Tuesday's special meeting, the council:

-- Approved a resolution creating a Southridge Revitalization Area of about 1,600 acres and authorized the City Manager Bob Hammond to negotiate agreements between the city, Port of Kennewick, Benton County and Kennewick General Public Hospital District to participate in a Local Revitalization Financing Program sponsored by the state.

The program offers up to $500,000 a year in tax revenues for up to 25 years to the city to help build infrastructure in the Southridge area that would promote growth of business and jobs.

The county and hospital commissioners have said they are willing to give their share of expected property and sales tax revenues associated with the growth to help pay for the improvements.

Port commissioners are supportive but have reservations about how their contribution would be spent.

The Port of Kennewick decided earlier Tuesday to opt out of the revitalization financing program.

The port would have to fork over $350,000 in future property taxes within the Southridge area to help prepare the area for development. But the port unanimously decided it didn't want to participate without knowing how its share would be spent, said Tim Arntzen, the port's executive director.

Part of the revitalization area includes land the port sold to a developer in 2006, and the port can't legally spend money to provide infrastructure to that land, he said.

The developer of South Ridge Village agreed to put in roads, sewer, water and electric lines as part of the purchase agreement for the port's 150 acres, Arntzen said.

The port may reconsider joining the revitalization area if it can sign an interlocal agreement with Kennewick spelling out the Southridge infrastructure development plans more clearly, Arntzen said.

The port would like to have more control on how its share is used, he said.

Dean Maldonado, who with his partners owns more than 200 acres in Southridge, said finding financing for infrastructure in the current economy is extremely difficult.

Kennewick needs to have the interlocal agreements completed in time to apply for the state's Local Revitalization Funding program Sept. 1.

The maximum that could be handed out would be five grants of $500,000 each, which will be awarded on a first-come, first-served basis, said Marie Mosely, the city's director of support services.

Councilman James Hempstead noted that if the city is successful, the grant will help develop the Southridge area without having to impose new taxes on Kennewick citizens.

"It's good for the state as well," said Mosely, who explained that by fronting money to the city for the development, the state will receive new sales taxes that come from the new businesses.

-- Agreed to lease the old police station at Dayton Street and West Eighth Avenue to Tri-Cities Residential Services. The agreement calls for leaseholder improvements to be done in lieu of rent for up to five years. Tri-Cities Residential Services intends to sublease part of the building to Columbia Industries and the YMCA.

-- Reporter Pratik Joshi contributed to this story.

-- John Trumbo: 582-1529; jtrumbo@tricityherald. com

-----

To see more of the Tri-City Herald, or to subscribe to the newspaper, go to http://www.tri-cityherald.com.

Copyright (c) 2009, Tri-City Herald, Kennewick, Wash.

Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.