IMAGE: thomas cobb
Sam Brooks made news last month when he became the first African-American board chairman in the 137-year history of the Portland Business Alliance and its predecessor organizations.
Announcing the landmark selection, PBA executive director Sandra McDonough praised Brooks, the 62-year-old president of Brooks Staffing and the founder and board chairman of the nonprofit Oregon Association of Minority Entrepreneurs.
"[He] is a pillar in the Portland business community," McDonough said in a statement. "He has worked tirelessly on behalf of minority- and women-owned businesses through OAME."
An examination of OAME's real-estate dealings, however, shows that it's nearly impossible to separate the nonprofit's interests from Brooks' personal financial interests.
Two buildings sold or donated to OAME ended up in the hands of Brooks and his friends.
"It's kind of strange," says Bernie Foster, publisher of The Skanner newspaper. "I've wondered if these were arm's-length transactions."
Victoria Cox of the Oregon Attorney General's charitable contributions section says the law requires that the directors and officers of nonprofits such as OAME act in the nonprofits' best interests when they buy or sell real assets.
"Any time there's a transaction, there's a burden of proof on the directors to show that they acted in [the] nonprofit's interest and that if there's any conflict of interest that it be disclosed," says Cox.
Based on those criteria, Brooks has been at the center of at least two curious property transactions.
The most recent came in 2005. As North Portland real estate exploded in value, Brooks sold OAME's primary asset—its headquarters—to a group of the nonprofit's insiders.
The building, located at 4134 N Vancouver Ave., was donated to the organization in 1990 by PacifiCorp. It has a footprint of 82,500 square feet, a little less than half of which is covered by a rambling one-story building housing a small-business incubator that generates about $200,000 in rent annually.
Records show the group sold its headquarters on North Vancouver Avenue in November 2005 for $2.55 million to a limited liability company. The LLC's investors include Portland Development Commission board member Sal Kadri; Jaime Lim, publisher of The Asian Reporter newspaper; Maxine Fitzpatrick, director of PCRI—a Northeast Portland community development corporation; Ed Wilson, owner of Ampere Electric; and, confusingly, OAME itself.
All the investors are OAME members, and one—Wilson—is one of the organization's eight directors.
Brooks did not return calls seeking comment. And Wilson refused to answer questions about the transaction. Kadri, appointed to the PDC board by Mayor Tom Potter in 2005, says Brooks wanted to sell the building to raise cash for a new headquarters across the street on North Williams Avenue. Rather than putting the property on the open market, however, Kadri says, "Sam and the board wanted to sell it to OAME members."
Kadri, who says he disclosed his ownership in the OAME building to PDC officials and also disclosed it on state ethics commission filings, says Brooks advertised the opportunity at OAME meetings and in newsletters. Before the sale closed, OAME obtained an appraisal, which Kadri says pegged the property's value at $2.55 million. Developers Jim Winkler and Bill Leigh, who both own nearby land, say the property is probably worth about $40 a foot now, or $3.3 million.
(Brooks and OAME have also leveraged public money from the PDC to help the nonprofit's financial position. In 1998, records show the PDC loaned OAME nearly $635,000. That loan refinanced earlier debt, saving OAME $145,000, according to the organization's tax return. PDC says the loans were repaid in 2003.)
The 2005 property sale wasn't Brooks' first eyebrow-raising transaction.
In 1987, the same year Brooks founded OAME to help minority business people, Qwest (then called US West) sold OAME a 22,000-square-foot property at 1130 NE Alberta St. for $75,000.
A decade later, OAME resold that same building to Brooks for $88,000.
Even before Alberta gentrified, that price caught people's attention. "It was a great deal at the time," Leigh says.
The building serves as the headquarters for Brooks' company, Brooks Staffing, which, according to the company's website, manages more than 150 employees and has contracts with PDC, the City of Portland, Metro, the Port of Portland, TriMet, OHSU and other local employers. In January, a similar property two blocks west on Alberta sold for $110 a square foot, which implies Brooks' building could be worth more than $2 million today.
As OAME grew over the years, Brooks wore two hats—and drew two paychecks. He served as president of his staffing company, and although OAME had a paid staff and director, Brooks also drew a salary from OAME of $64,000 in 2003 and $35,000 in 2005, records show. (It is unclear whether Brooks was paid in 2004).
"Sam operates a little differently than other people," says the Skanner's Foster. "I don't know how he does it."