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For Sale: surplus property


Portland has begun to prepare 24 properties for sale, which could generate millions of dollars

Photo Credit: TRIBUNE PHOTO: JONATHAN HOUSE - Bureau of Environmental Services property manager Eli Callison turns on the lights in bureau-owned warehouse that sits at Terminal 1 in Northwest Portland. The bureau is hoping to sell the 18-acre industrial siteTwo Portland bureaus are preparing to dispose of dozens of pieces of property they no longer need.

Located in residential and industrial neighborhoods, the properties could be acquired by other city agencies, Metro or the state of Oregon. If not, private developers could buy them.

The properties are owned by the Water Bureau and the Bureau of Environmental Services and, if sold, they could bring in millions of dollars to help fund some of their projects or hold down water and sewer rate increases.

“It could be a win-win-win. The bureaus get rid of properties they no longer need, they get money for them, and they are put to new uses,” said Commissioner Nick Fish, who is in charge of both bureaus.

But the last time that happened, neighbors in Southwest Portland reacted bitterly when the Water Bureau sold property holding an unused water tank to Renaissance Homes for residential development. The neighbors complained about the lack of public notice, charged that the $140,000 sales price was too low, and argued the .07-acre parcel should instead be preserved because it abuts a Metro green space.

The Water Bureau has now identified 22 more properties it is no longer using. The Bureau of Environmental Services, which operates the city sewer system and stormwater management programs, has identified two properties for sale and is beginning to evaluate four others.

Fish hopes to avoid controversies over these properties. He has directed the bureaus to adopt a new policy for identifying and disposing of unneeded parcels. The policy — which Fish presented to the City Council on Feb. 18 — requires much more public notification and includes a formal process for giving other agencies and governments the first chance to obtain them. The policy also includes specific advertising requirements if they are to be sold.

Now that the new policy has been adopted, the bureaus are moving to identifying and publicize the properties they are no longer using. But it is unlikely to prevent all future controversies . Some of the properties have the same characteristics as the so-called Freeman Tank property along Southwest Freeman Street — they are quiet parcels in residential neighborhoods. One is like a small park behind homes along North Macrum Avenue and another is being used as a community garden on North Edison Street.

Others, however, are just the opposite. Most of the BES properties are in industrial areas, which is important because the city has a shortage of industrial land for private development. One site is Terminal 1, which was formerly owned by the Port of Portland along the west bank of the Willamette River at 2400 N.W. Front Ave. The 18-acre site includes a 68,000-square-foot warehouse and dock.

BES bought Terminal 1 from the port for $6.5 million as part of the $1.4 billion Big Pipe project. At Wednesday’s council hearing, Fish said there already has been tremendous interest in it from private developers and he expects it will be sold at a great profit.

Past policy inadequate

Fish readily admits the Water Bureau’s policy for disposing of unneeded properties was totally inadequate in the past. The bureau sold the Freeman Tank property after posting it only once on Craigslist. The sale happened when Commissioner Randy Leonard was in charge of the bureau and before Mayor Charlie Hales gave it to Fish. By the time the controversy erupted, the bureau had already signed a contract with Renaissance Homes that Fish felt he couldn’t break without exposing the city to financial liability.

Fish says he took the neighbors’ complaints seriously, however, and began working with them and bureau officials to craft a better policy. When it was done, both bureaus adopted it. The “Surplus Property Identification, Disposition and Notification Process” Fish presented to the council has 10 steps, beginning with bureau staff conducting internal evaluations of properties that are no longer needed. If the bureau directors and commission-in-charge agree, other city agencies will be notified in writing the properties are available. If no agency wants them, they will be offered to Metro, the elected regional government, and to the state. Only if they turn down the offer will the properties be sold to private parties.

Along the way, neighborhood organizations where the properties are located will be notified they are available. The organizations include neighborhood associations, neighborhood business associations and neighborhood coalition offices. Both bureaus must identify the properties on their websites. If the properties are to be sold, a sign must be placed on them and they must be advertised in local newspapers.

The policy is supported by Moses Ross, who was chairman of the Multnomah Neighborhood Association where the Freeman Tank property is located when it became controversial.

“Commissioner Fish listened to what the neighbors had to say. The new policy is a direct response to the criticisms,” Ross said.

More water tanks

Last week, the Water Bureau posted 22 unneeded properties on its website. Eight of these properties are in North Portland, three are in Northeast Portland, two are in Northwest Portland, four are in Southeast Portland, and five are in Southwest Portland. They range from .07 acres to almost 3 acres in size. Appraised values run from $1,500 to $1.14 million, and total $3.174 million altogether. That figure is undoubtedly low, however. Several of the appraisals are more than seven years old, and eight of the properties have not been appraised.

Ironically, most of the properties identified under the new policies — 15 — are unused water tanks. Some were acquired from other water districts during annexations. Some were never even used.

Two of the other properties hold wells that are no longer used, one is a nonfunctioning pump station, and four are vacant lots. The largest vacant lot is a nearly three-acre tract near the 6600 block of North Syracuse Street that the bureau bought for a water tank that was never constructed. It is currently zoned for low-density residential housing.

Despite the Freeman Tank controversy, not everyone is upset by the idea of having unused water bureau properties redeveloped. Steve Spear has lived across the street from a large unused water tank at 5010 S.W. Alfred St. for 29 years. It sits on .34 acres, and Spears wouldn’t mind if it was replaced with housing.

“I’m pretty ambivalent about it. It’s a pretty quiet neighborhood, and one or two houses wouldn’t make much of a difference,” says Spear.

The Bureau of Environmental Services has only posted two properties so far. One is Terminal 1, an 18-acre industrial site formerly owned by the Port of Portland. The port stopped using Terminal 1 several years ago when shipping vessels grew too large to serve it. BES bought it to use as a construction and equipment staging site for the Big Pipe project.

According to BES property manager Eli Callison, a portion of the pipe runs under the property, which also includes a shaft for accessing it at the northwest end of the site. Callison says the bureau is currently studying how much of the site needs to be retained for access to the pipe. Once easements and other details are worked out, the remaining property will be put up for sale.

Already available is a nearby three-quarter acre site that was also acquired for the Big Pipe project. Located at 2439 N.W. 22nd Avenue, the vacant gravelled site is comprised of two parcels being advertised together. It is also zoned industrial and valued at $788,750.

Hagerman says that since the new policy was adopted, BES officials have begun evaluating four other properties. They include two industrial sites on Swan Island totaling 10 acres, 10.7 acres of industrial land along North Columbia Boulevard, and a small parcel of commercial land on Southwest Macadam Avenue in the South Waterfront area.