The Pendleton Development Commission during its public meeting Friday, May 20, approved a $500,000 grant to remake The Marigold Hotel, 105 SE Court Ave., into the new Pendleton Hotel.

PENDLETON — The troubled Marigold Hotel in downtown Pendleton is getting big help from urban renewal funds.

The Pendleton Development Commission during its public meeting Friday, May 20, approved a $500,000 grant to remake The Marigold Hotel, 105 SE Court Ave., into the new Pendleton Hotel.

The successful applicant, True Holdings LLC, of Clackamas, plans to redevelop the premises into extended stay lodgings. The project cost to True Holdings is approximately $3.7 million to $4 million, with purchase price of $1.5 million, remodeling expense of $2.2 million and the costs of furnishings, according to a report to the commission from Charles Denight, Pendleton urban renewal associate director.

Denight recommended the commissioners approve the rejuvenation grant. Given the history of police calls to The Marigold, he said, “We should all be rejoicing (over True Holdings’ application).”

Resident Neal Berlin and City Councilor Carole Innes both expressed concern during the meeting about security for the underground parking garage, a scene of criminal activity. Sydney True, owner of True Holdings, promised to secure access to the garage for vehicles and foot traffic.

As with all PDC grants, the project owner receives reimbursement in three payments, when each third of the project cost is reached. That could take until the third quarter of 2023, according to Denight’s report.

Denight also reported the development commission does not have sufficient remaining funding for this grant, given its commitment to 15 ongoing building projects, plus several street reconstructions for summer and fall of 2022. However, Banner Bank is working to amend PDC’s existing line of credit for $10 million, with a proposal to add $500,000 to allow this grant, bringing the line of credit to $10.5 million.

According to Denight, True wanted to buy The Marigold Hotel, rebrand it with a new name and look and sell lodging to a market interested in extended stays. Longer term occupancy has been a successful business model in the otherwise depressed lodging industry during the pandemic, according to an article from Hotel Management magazine attached to the staff report.

The commission also received conceptual designs for the remodel of the former hotel. Final designs are to be submitted as part of the grant application process, with other components required for the PDC’s grants. These are a scope of work description, a business plan, a budget with two bids or estimates from two contractors, proof of insurance on the building and a signed contract for the grant funding.

The hotel plans call for a modern property in design and function, a restaurant and even a small corner market for hotel guests and city residents.

According to Denight’s report, True intends to operate The Marigold through the 2022 visitor season while beginning some work on the facade, including signage with the new name. Then in the fall through the winter, his contractor can make room renovations. In the spring, the rooms may receive new furnishings to make them ready for the 2023 visitor season.

“Given the cost of purchasing the property and restoring and furnishing it, he does not feel he could complete the project without the urban renewal grant,” Denight reported to the commission.

Due to the timing of his arrangement with the current owner, True sought a commitment on the grant by May 23. He has an option contract, but must make an offer for a purchase agreement by that deadline.

True has developed other properties, including Klamath Cascade, the Canyonville Inn and other projects, according to Denight’s report. The redeveloped Klamath Cascade Apartments, previously a historic Klamath Falls hotel, has become a desirable place to live, with 48 low-income housing units. Another development was a 100-unit blighted apartment complex in Klamath Falls with a 22% vacancy rate. True redeveloped the apartments, adding new amenities and filling the units.

Denight also reported True has retained a manager for the new hotel, a woman with a master’s degree in hospitality and 27 years of hospitality experience. She is to live on-site with her husband. They intend to move to Pendleton as soon as True takes possession.

Commission approves demolition grant

The PDC also approved an application for a demolition grant for the building at the future site of the Farm II project.

Farm II — Facility for Agriculture Resource Management — has received millions of dollars of state support for Blue Mountain Community College and partners to construct a facility providing education and performance areas related to agriculture along Southwest 18th Street near Fallen Field.

Farm II has received millions of dollars to state support for Blue Mountain Community College and partners to construct a facility providing education and performance areas related to agriculture. Pendleton Round-Up Holdings, an arm of the Pendleton Round-Up Association, wants to take down the structure at 1816 S.W. Byers Ave. to open the space for FARM II. Pendleton Round-Up Holdings then will lease the vacant land to the college.

According to the memo to the commission, the estimated demolition cost is $73,000, and the urban renewal program covers the entire cost of demolitions.

According to a memo, Pendleton Round-Up Holdings contacted numerous demolition companies before finding one that could handle the large amount of asbestos in the building and take it back to dirt this year. 3 Kings Environmental, of Vancouver, Washington, got the job. The project may occur in July.

The PDC will meet June 14 to consider altering its grant-giving process to improve financial sustainability.