The Pendleton City Council voted 4-3 on Tuesday to reject a 50-year lease for a 74-room, $11.5 million airport hotel, even as some additional conditions were added before the final vote.
The council breezed through the open portion of their meeting in 24 minutes before filing into the jury room for a 90-minute executive session that included discussion of the hotel, which is being proposed by a subsidiary of Vancouver, Washington, company Makad Corp.
Instead of a monthly flat fee, the lease proposed that the hotel would pay Pendleton a percentage of its gross revenue as rent, eventually ramping up to 2 percent per year.
Before the meeting, Makad Corp. agreed to extend the revenue percentage setup through the life of the lease and build a new parking lot to replace the long-term parking lot on which the hotel would be built.
And right before the council took a vote, Councilor Becky Marks made a motion to approve the lease contingent upon Makad Corp. providing a security bond, securing financing, and obtaining a franchise agreement with a hotel chain.
Even with all the amendments to the deal, councilors Paul Chalmers, Scott Fairley, Dale Primmer and Neil Brown voted against the lease. Councilor Jake Cambier was absent.
A brief period of confusion ensued as the council tried to figure out how the city would proceed.
“At this point, I have no idea what is going to satisfy the council,” City Manager Robb Corbett said.
Fairley and Brown said they were generally opposed to the concept of a hotel at the airport and were unlikely to support it regardless. The other opposing councilors indicated they were amenable, but only if the lease was further amended.
Brown asked City Attorney Nancy Kerns if the city was legally liable for backing out of negotiations, but she declined to speak about it in open session.
Although the city touts Makad Corp.’s involvement in developing the River Lodge and Grill in Boardman, the company’s other projects at the Port of Morrow weren’t as fruitful.
Planned manure and ethanol plants were never built, while a power plant got tied up in a lawsuit before it was sold off.
Makad Corp.’s other Pendleton project, a data center on the Airport Road extension, has yet to break ground since the council approved a 30-year lease in 2015.
The council also discussed the Pendleton Heights housing development behind closed doors, but did not take any action when members returned to council chambers.