The controversy over the City Council's decision to open a temporary — and perhaps permanent — homeless facility at Terminal 1 has only increased in recent days.
Commissioner Nick Fish, who oversees the bureau that owns the property, tells the Portland Tribune he might not approve the lease authorized by the City Council for the project. Fish says the 14-acre parcel at 2400 N.W. Front Ave. is worth far more than the $10,000 a month the council directed the Portland Housing Bureau to pay for it on Aug. 10.
"I'm in no hurry to authorize the lease and have asked for legal guidance on it," says Fish, who oversees the Bureau of Environmental Services.
Fish believes the lease should be as much as $100,000 a month, which he says is the market rate for the property. His position was reinforced last week when seven bids from private developers to buy the property were released. They ranged from $6 million to $10 million.
According to Fish, the lease must be market rate because the property was purchased by BES ratepayers. Fish says ratepayers cannot legally subsidize non-BES projects.
That view is supported by Portland attorney John DiLorenzo, who went to court Monday to block the shelter project on those grounds. DiLorenzo is currently suing the city in Multnomah County Circuit Court over alleged misspending of BES and Portland Water Bureau funds by the council. The judge has already ruled such spending must be reasonably related to the primary missions of the bureaus.
Last Wednesday, Commissioner Amanda Fritz, who also opposes the project, voted against an application to Metro for a $100,000 grant to determine whether the homeless shelter and large project proposed by developer Homer Williams is feasible. Fritz said the grant was a "waste of money" and also charged that project supporters violated earlier promises that no public money would be spent on the project, beyond the housing bureau lease payments.
The application was approved in a 3-1 vote. Voting for it were Mayor Charlie Hales and commissioners Dan Saltzman and Steve Novick, the same three who approved the lease. Fish, who voted no on the lease, was absent.
Terminal 1 was originally owned by the Port of Portland. After it became obsolete, BES bought it for about $6.3 million to use as a staging ground and access point for the Big Pipe project to reduce combined sewer overflows into the Willamette River. After that project was completed, the City Council declared the property surplus and directed it to be sold through a previously approved surplus sales process.
Multnomah County property records say Terminal 1 has a market value of $8.6 million. The broker handling the sale told BES it is worth more, however. He predicted the sale would bring in offers between $8 million and $12 million. But that was before the council voted to open a temporary 400-bed homeless shelter in a vacant warehouse on the property and consider a permanent homeless multi-service center there.
Fish believes that vote — which took place just before bids were due — discouraged some potential bidders, and resulted in lower offers. He also believes the vote damaged the city's reputation with anyone who might consider buying property from it in the future.
"The vote dampened the market and hurt the city's reputation," Fish says.
Only three of the bids mention specific development proposals. A $6 million bid from Costco Wholesale proposes one of its membership stores at the site. An $8.5 million bid from Kidder Mathews proposes a "new and innovative business park." And Portland developer Jim Winkler offered $10 million with the idea of having the council rezone the property to accommodate 1,000 affordable housing units.
The other bidders and their amounts are: Kehoe Northwest Properties LLC, $9 million; WPC 2400 NW Front Ave LLC, $8 million; Lincoln Property Company, $10 million; Conax Properties USA Inc, $8.1 million.
The bids were obtained by the Portland Tribune through a public records request. They were due Aug. 15, five days after the council authorized PHB to lease Terminal 1 from BES for six months, with two automatic six-month extensions. That was five days after the council approved the lease.
The proposal was presented to the council by Saltzman. During the hearing, he said the maximum 18-month period is intended to allow Williams enough time to raise the money necessary to open a larger homeless multi-service center on the property he is calling Oregon Trail to Hope. Williams outlined his proposal at the hearing but did not provide specific details, including the construction costs, which he had previously estimated at between $60 million and $100 million.
Fish says he intends to continue the sales process to provide an alternative in case the shelter project is blocked or Williams' larger plan falls through.
Oregon Trail to Hope
The grant application approved by the City Council on Aug. 17 was prepared by the Portland Housing Bureau. It seeks a $100,000 Equitable Housing Planning and Development grant from Metro, the elected regional government. This is a relatively new program intended primarily to help local governments build more affordable housing. It is unclear whether the application qualifies for the program. That will be decided by a screening committee and, ultimately, the elected Metro Council this fall.
According to the application, the grant would be matched by $150,000 in private funds and $15,000 in city staff costs for a total of $265,000. If approved, the grant would help fund a 12-month project to determine the feasibility of the Oregon Trail to Hope concept at Terminal 1. It describes the concept as a multi-service center providing shelter, services and housing for people experiencing homelessness.
The application says the concept was proposed by developer Homer Williams, who is leading the project, which filed with the state as a public benefit corporation in May. The directors are Williams, business partner T.B. Dame, business partner Matt Brown, and consultant and former Portland Development Commission director Don Mazziotti. Williams and his team have reached out to more than 38 government, nonprofit, business, faith and other partners to build support for the project over the past six months, the application says.
According to the application, if the grant is approved, a Stakeholder Adviser Committee will be convened to assist with the project by December of this year and a consultant will be hired by Jan. 31, 2017.
The work will then be conducted in three phases. The Visioning phase will define the vision for the project — including "the incorporation of a racial equity lens" — by March 31, 2017. The Feasibility Analysis phase will include an analysis of the zoning, land use, site acquisition and financial requirements for the project, to be completed by May 31, 2017. The Master Plan Development phase will produce a map of the site with scheduled uses by Oct. 30, 2017.
One issue to be explored is how much the site must be cleaned up to be suitable for residential uses. The Oregon Department of Environmental Quality has notified the city that it can be occupied now, provided the asphalt surface is not broken. That is not expected to happen while the warehouse is being used as a temporary homeless shelter, but it will if the larger project goes forward.
The application was accompanied by letters of support from Saltzman, Williams, Transition Projects, the Union Gospel Mission, and Marc Jolin, director of the newly formed city-county Joint Office of Homeless Services, which is negotiating the operating agreement for the temporary shelter with Williams' group.