Why are these Lake Oswego offices empty?

This question is top of mind for those who see what is happening to the Kruse Way Place office buildings.  The 3 buildings have been emptied of occupants for some time now with only a few tenants left.  The halls are devoid of workers, the parking lots are empty, and the offices vacant and dark. 

What is going on?  Are many businesses closing or downsizing?  Are more people working from home?  Why hasn’t the landlord lowered the rent and advertised more to fill the empty spaces?  None of this makes any business sense.  You don’t kill your revenue stream while paying increasing expenses just to pay taxes, utilities and insurance and keep the buildings viable.  So what’s the truth about Kruse Way Place?  

  

One thing that IS going on is that the land  owner has applied for a zone change from O-C/R-3 (Office Campus / High Density Residential) to R-O (the highest density residential possible).  Their application puts forward a conceptual plan for new apartments to take the place of the existing office buildings.  These plans are suggestions only and have nothing to do with what can or will be built on the property if the R-0 zoning is achieved.  One thing that is certain is that if the city approves the request for a “Comprehensive Plan Map Amendment”, the land will instantly be worth more than it is under current zoning.  This is called Zoning Arbitrage.  Is this the goal for the zone change request?  Re-value the property for more intense use for the profit of the current land owner?  

The problem for Lake Oswegans is that once done, an R-0 zone can never be rescinded, and with no plan for what will be built on the property, it could be a disaster for the city.  Imagine 3 - 5 Windward Apartments or Mercato Grove buildings on a single property along Kruse Way with 600-1,000 units.  Then imagine what the state, Metro and the LO planning department have in mind for the rest of Lake Grove and the city!!!  

Who gains and who loses in this deal?  

Who is watching out for the interests of Lake Oswego residents?  

Who do the LO bureaucrats and politicians work for? 

Whose city is this?

BTW:  NIMBY is not a bad word - it denotes a person who cares deeply about the place they live and defends it against bad influences, actions and policies.  Mothers and fathers are like that with their children.  People who call a place home are like that with their neighborhoods and towns.  

Here are 2 articles that explain the way Zoning Arbitrage works for real estate investors. Click on the links for the full text of each piece.   

https://deepblocks.com/blog/category/zoning/zoning-arbitrage-unlocking-hidden-value-in-real-estate-investments/

Zoning Arbitrage: Unlocking Hidden Value in 

Real Estate Investments

Olivia Ramos

November 11, 2024

Understanding Zoning Arbitrage

Zoning arbitrage refers to capitalizing on differences in zoning regulations to maximize the value or profitability of real estate investments. This strategy involves identifying properties where the current zoning laws either undervalue the property's potential or are likely to change in a way that increases the property's value.

https://hold.co/blog/zoning-arbitrage

Pros and Cons of Zoning Arbitrage in 

Real Estate Investing

If you spend any time around real‑estate investors, someone will eventually drop the phrase “zoning arbitrage” with a mischievous grin—usually right after they’ve run the numbers on a deal no one else noticed. The idea is simple enough: buy property that’s currently valued under one zoning designation, then unlock a more profitable use through a rezoning request, variance, or by leveraging pre‑existing loopholes.

Done correctly, that single change can make a sleepy parcel of dirt worth multiples of its purchase price. Sounds almost too good to be true, right? Yet zoning arbitrage is perfectly legal, remarkably lucrative, and—depending on whom you ask—absolutely loathed. City councils worry about neighborhood character, residents fear traffic and gentrification, and NIMBY forums ignite faster than a flare.

End Oregon’s Death Tax NOW

Oregon has the LOWEST estate tax exemption - or put another way - the HIGHEST estate tax - in the entire country.   Even without the terrible estate tax, Oregon rates as one of the worst states for taxes in the country.

In 2025, when the legislature rolled out their wish list of new bills, there was no recognition of funding problems from Democrat politicians, just a boatload of new, costly social justice programs.  It’s as if working Oregonians are only here for providing funding for the ideological agendas of the dominant political party.  Republicans fought back with sensible cost-cutting measures that never saw the light of day.  Ending the Death Tax was one of them, but anything that limits funding went nowhere.  It seems it will be up to the citizens to get done what the legislature can’t - ending Oregon’s estate tax.

Visit the End the Death Tax website below, and download the petition to sign.  Better yet…Send the link to as many people you can.  Also print copies along with the text of the measure and deliver it to neighbors and co-workers along with pre-addressed envelopes.  The online petition needs to be printed, signed and then mailed in - one signature per page.  (Oregon registered voters only.)  Print a lot of them and have them ready to hand out along with the website URL.  PASS IT ON!  

Central Oregon Daily   June 28, 2025

Oregon Legislature wraps for 2025 after 11th-hour strife, historic funding shortfall

Excerpts

Lawmakers introduced more than 3,400 bills — the highest number in at least two decades — during the session, prompting an ultimately unsuccessful effort led by Democrats to pass a law limiting the number of bills each legislator could introduce. 

The heightened tension among lawmakers Friday underscored the uphill battle they’ve faced this year in both chambers to pass ambitious policies, such as unemployment benefits for all striking workers, reforms of civil commitment laws and funding for more homeless shelters, all with limited resources and against the backdrop of rocky federal politics. 

After several years of higher-than-expected revenues and boosts from federal COVID-relief funds that have since expired, lawmakers had less money to spend this year. 

After strengthening the state’s sanctuary state laws and protections for abortion and gender-affirming care in recent years, there wasn’t much left to address.

It's getting to be that time of year --

--   when you can track winter rains and river flood levels!

I used to own property near the Willamette River in the Oregon City area in a 500-YR Flood Zone.  Every few years the river flooded the river parks nearby and I wondered if this would be the year my property would go under.  So far, even the worst flooding (46.04' on February 9, 1996) and all historical floods on record had not reached my property so I was confident that mine would be safe.  But whenever the river filled up and flooding was in the news, I still checked to see what current river gauges were being reported before I went to sleep.  

Willamette R below Falls at Oregon City - Maximum gage height, 46.04 feet Feb. 9, 1996

If you didn't live in Western Oregon in the winter of 1996, you missed the biggest weather-related disaster in Lake Oswego's history.  I couldn't believe my eyes when I saw a boat house from a home along the canal floating down the middle of Oswego Lake.  The dam on the Tualatin River had been breached and the lake returned to its original course as an arm of the Tualatin River.  Water flowed into Lakewood Bay, over State street and down Foothills to the Willamette and turned the dam at Oswego Creek into a waterfall.  

A new dam supposedly removed the flood risk, so the Corps of Engineers re-mapped properties along the lake and canal so they are no longer designated as in a FEMA flood zone.  Are they right?  See the MetroMap for FEMA flood zones.

Read about the flood here:  National Weather Service

 For information on other significant flood events in the US, use this map.

And for local (and national) real-time river level gauges, see the River Level Tracker.  The map and chart below are from this link.  For most of Lake Oswego, select Willamette River below falls at Oregon City.  Others might like to track the Tualatin River, downtown Portland, or any place you are curious about.