PORTLAND, Ore. — The McMenamins chain of brewpubs and entertainment venues is well-known for renovating and reinventing historic sites in the Pacific Northwest.
But the company co-founded by brothers Brian and Mike McMenamin more than 30 years ago is trying something new with its plan to convert a former Bothell school into a hotel, brewpub and theater.
The Oregonian reports that McMenamins is looking for a group of investors to raise $8 million of the equity in the $26 million project. It’s the first time the company has sought outside equity partners.
Investors will be members in the development of the project, promised an 8 percent-a -year return on the money they invested as well as additional returns if it appreciates in value and benefits from tax credits for historic rehabilitation.
“We really hope there are people who are really interested in how the community develops,” Mike McMenamin told the newspaper. “In the end, I think it’s a lot more fun when you have a lot more folks who really know what you’re doing and believe in the community investment.”
The project comes as Bothell attempts to liven up its downtown. The city north of Seattle has spent $95 million on infrastructure improvement downtown in the hopes of unlocking more private investment.
The city called McMenamins around the time it bought the vacant site from the local school district. City manager Bob Stowe said several developers offered concepts, but McMenamins presented the only proposal that didn’t call for a subsidy or for the city to use the site.
“McMenamins definitely fit perfectly with the vision,” Stowe said. “I don’t believe another possible tenant or end user could produce the same draw and the same sort of stimulus to the community.”
The redevelopment will be similar in scale to McMenamins’ Edgefield or Kennedy School complexes in the Portland area. Those projects were developed in phases. This, according to Mike McMenamin, is a “one-shot deal.”
So McMenamins decided for the first time to seek partners. At first, they sought one investor who could spend $8 million to get the project moving.
Those talks kept falling apart. So “out of frustration,” McMenamin said, the company considered crowd-financed real estate development.
Members of this crowd, however, need deep pockets. The minimum investment is $250,000, and participation is limited to investors worth at least $1 million or who make more than $200,000 a year.