City closing in on deal for Post Office site

PDC, Postal Service finding common ground on purchase price

By Steve Law

The Portland Tribune, Dec 25, 2008, Updated Oct 30, 2009 (15 Reader comments)

A deal could be in the works for the Portland Post Office site on Northwest Hoyt Street.

Tribune File Photo

Nobody ever accused the Postal Service of being speedy, especially during the holidays.

But talks are getting down to the nitty-gritty in the city of Portland’s 20-year pursuit of the postal distribution center southwest of the Broadway Bridge.

Redeveloping the 13-acre site at 715 N.W. Hoyt St. presents a rare opportunity to expand Portland’s central business district. The property has been touted as ideal for a major employment center, a university or a Major League Baseball stadium, though the stadium idea is out of favor among city officials.

With a nudge from Oregon’s Congressional delegation, the Postal Service agreed two years ago to part with the site if a suitable price can be fetched.

That may be in the cards.Both sides commissioned recent appraisals to determine a purchase price for the complex, and the two figures turned out “very, very close – shockingly close,” said Steven Shain, Portland Development Commission manager for the River District Urban Renewal Area.

The city is “very confident of proceeding forward and making this happen,” Shain said.

A Postal Service spokesman was more tightlipped.“Finally, we’re at a point where I would call this serious negotiations,” said Ron Anderson, customer relations coordinator in Portland.

More than 800 people work at the complex, a hub for distributing mail from all of Oregon and Southwest Washington.

Under terms of the Portland Development Commission’s letter of intent to buy the property, the purchase price will be set by averaging the two appraisals, then adding 50 percent. PDC has explained the 50 percent bonus as a way of reflecting future property value, since it will be several years before the Postal Service vacates the site. In addition, the city anticipates changing the streets and zoning, enabling more density as the site develops than the Postal Service’s sprawling 390,000-square-foot complex.

The bonus also serves another purpose.Because the Postal Service derives all its operating income from selling stamps and other services – rather than relying on federal income taxes – it has insisted on getting enough money from the deal to build a replacement facility.

The two appraisal prices, plus the 50 percent bonus, may be enough to meet the Postal Service requirements, Shain said.The cost of such a replacement facility is one of the issues still on the table, he said.

Shain said the property is worth it to the PDC because “this is a transformational site for the city of Portland. If we don’t do it now, we’re going to want to do it some other time.” He said the site could accommodate as many as 10,000 new jobs in the future.

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