An Offer The City Could Refuse

[October 22nd, 2008]

One of Portland’s savviest real-estate investors and Mayor Tom Potter are locked in a high-stakes game of chicken over property for a police training center long sought by the cops and the mayor.

And if Potter accepts the terms offered by that investor—Portland property owner Joe Weston—he’ll have to explain it to city analysts squawking that Weston’s deal could leave the city holding the bag.

Negotiations for 276 acres Weston controls out in Scappoose began in 2006. In the talks’ latest turn, Weston wrote Potter on Oct. 6 that the city’s latest offer was “unbelievable and totally unacceptable.”

Potter, a former Portland police chief, wants to secure property for the training facility before he leaves office in January (see “Potter’s Legacy,” WW, April 16, 2008). The current budget has $250,000 set aside for the project in the general fund, and another $1.75 million in the city’s “rainy-day fund” earmarked for it.

But Potter’s timing is becoming increasingly dicey. The city faces a projected $10 million shortfall in business-license fees this year. And City Commissioner Sam Adams, who replaces Potter in January, has asked bureaus to prepare for 5 percent cuts for the fiscal year 2009-2010.

Adams is less gung-ho on Scappoose than Potter. “We recognize the police need a training facility,” says Tom Miller, Adams’ chief of staff. “Whether it’s this property, we’re not sure.”

The $2 million now set aside is enough to meet Weston’s asking price for the land, which lies just east of the Scappoose Airport, about 19 miles northwest of Portland. But non-monetary considerations imperil the so-called “Regional Public Safety Training Center Project,” a $120 million idea that Potter identified as a priority 11 months ago.

Potter and police brass want the center because police now pay about $400,000 annually to rent training facilities in Canby and Shelton, Wash.

Negotiations have become contentious, however. Weston grew so upset Sept. 4 with the city’s lack of progress that he gave Potter an Oct. 1 deadline (see Murmurs, WW, Sept. 17, 2008) to deliver a firm bid. According to Weston’s letter, here’s what Weston and his development partner, Ed Freeman, want in addition to money:

“The sale would be conditioned to the site and the adjacent property to the south being included into the [Scappoose] Urban Growth Boundary.”

“The property transfer would be with a restriction that the site would be developed for public purposes…and the city would participate in the cost of the road and related utilities.”

“Construction would commence within four years following the UGB designation, and if not, Airpark Development, LLC [Weston and Freeman’s company], has the absolute right to acquire fee simple the land at the cash price paid by the city.”

Weston’s proposal could be a windfall: With the city’s assistance, he would get his adjacent 200 acres, now zoned agricultural, inside the UGB. That would multiply the property’s value because he could then develop it for housing.

He also wants the city to pay about 30 percent of the cost of bringing a road and utilities to his land. And, if the city fails to break ground within a short time, he gets the land back at cost—with new zoning, a road and utilities.

A Sept. 23 city analysis of Weston’s proposal shows city officials have reservations about such terms.

“Active support for a UGB expansion in Scappoose could be controversial and may cause a backlash both in Columbia County and in Portland,” says the memo from the City Attorney’s Office, the Office of Management and Finance, and Kyle Chisek, a Potter policy adviser.

The document also notes any new road would primarily benefit Weston and Freeman, whose other land is between Scappoose and the parcel the city of Portland covets.

“We may derive some benefit from a spine road,” the document says. “However, it is not a requirement, since we would have alternative access and would not necessarily need to bring utilities to the property.”

Finally, city officials are leery of Weston’s requirement that the land be sold back to him at the same price if construction doesn’t begin in four years. Currently, the plan is to share the project’s cost with 11 regional partners. But only one, Portland Community College, has committed in writing to contribute to even the land acquisition cost so far.

When the city replied with an Oct. 1 counterproposal omitting any of Weston’s non-monetary requests, he snapped, “the city is not a serious buyer.” He also showed just how eager he is to get the city on his property.

“Because of the conditions [described above], the seller is subsidizing the price of the land,” Weston wrote. “If any or all of these conditions are acceptable we can, and will, adjust the price accordingly.”

Chisek promises the mayor won’t get taken for a ride.

“The mayor wants this project to happen,” Chisek says, “but he’s not so desperate he’s going to take the deal they’re dangling.”