Main Street Courthouse RFEI

The fair market value is the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. Per the Disposition and Development Agreement with Level OCC-01, LLC, the purchase price was the greater of $100,000 or the appraised value of the property. In September 2025, Clackamas County retained NW Value Consulting to conduct an appraisal, taking into consideration the legally allowed and physically possible uses of the property, as well as the financial feasibility of those uses.

The appraiser considered the “highest and best use” of the property, both “as is” and as a vacant parcel. The appraiser concluded that redevelopment would be the highest and best use of the parcel. In this scenario, to determine the value of the property, the appraiser considers the market value of the prospective improvements and subtracts the estimated costs to construct those improvements, including the demolition of existing improvements, to arrive at the value of the property. Based on Level OCC-01, LLC’s proposed improvements, the appraiser calculated that the prospective market value at $27,000,000, and that the cost to construct those improvements, inclusive of the County’s required conditions to sell the property, at $29,628,000. In this case, the value of the site is a negative number, -$2,628,000, and the purchase price was established at $100,000.

The appraiser's assignment is to consider what would typically be expected, which is informed by but not reliant on the specific project. The developer estimated their hard and soft costs of construction at $27,294,188, or $328 per square foot. The appraiser necessarily validates any data supplied by the developer about their expected construction costs against industry data and local comparables to ensure that the numbers presented are reasonable. Industry data indicates a typically expected cost of construction at $29,067,610, or $350 per square foot, and local comparables were estimated at around $23,258,362, or $348 per square foot. Based on this information, the appraiser assigned a value of $27,000,000, or $325 per square foot, to complete the proposed construction. This value is a judgement of the appraiser based on their understanding of the project and the provided data.

In addition to the necessary construction costs above, as part of the disposition process, the County entered into a Disposition & Development Agreement (DDA) with the developer, conditioning the sale on three items:

1. Construction of structured parking that would not ordinarily be required for this project under current land use regulations
2. Dedication of the open space known as Liberty Plaza to the City of Oregon City, which will require the developer to undertake land use processes to partition the site and make necessary improvements to the site before dedication
3. Recovery and reuse of historical elements of the building, including carved stone figures, trim work, interior and exterior doors

The developer estimates that these extraordinary requirements would cost an additional $2,628,000 that would not normally be incurred for this project absent the County’s DDA. The appraiser judged these estimates to be reasonable and did not make any adjustments. Based on the appraiser’s judgement of $27,000,000 in necessary costs plus the $2,628,000 in estimated expenses for the extraordinary costs, the appraiser determined the cost to construction the project at $29,628,000.

Through the Disposition & Development Agreement with Level OCC-01, LLC, Clackamas County gained certainty in the timing and transaction price that would not have existed in another scenario. A traditional market listing offers little certainty to a seller than an offer will be received, or that the offer will be for the asking price. Real estate market analysis for Oregon City indicates that there is relatively low demand for additional office space, especially given the additional square footage beyond the courthouse made available by relocation of other County offices, which would reduce the likelihood of an offer being made.

Through the Request for Expressions of Interest, over 450 local and regional development firms were asked to express their interest in the purchase of the Main Street Courthouse, and to offer a proposal for how they might reuse or redevelop the property. During the approximately 60 days that the County accepted proposals, the County received one proposal and no other meaningful inquiries. 

Additionally, maintaining a vacant office building requires the County to bear the expense to keep the building secure, maintain major mechanical systems, and ensure that the public’s property is protected from vandalism or environmental damage. The County estimates these costs at $350,000-400,000 per year of vacancy, including the cost of staff time, which would reduce the benefit of a potentially higher price that might be obtained in a traditional market listing.