Prosper Portland Proposes Settling Lawsuit Over Contract to Demolish Downtown Post Office

The city development agency’s insurer would pay Northwest Infrastructure $1.3 million to end litigation.

Prosper Portland, the city’s economic development agency, said in documents released today that its insurance provider is proposing to pay $1.3 million to settle a lawsuit over a disputed contract to demolish the shuttered U.S. Post Office processing center in the Pearl District.

Prosper’s board will vote on the settlement Feb. 1.

Prosper acquired the site in 2016, paying $88 million for the nearly 14-acre parcel. The agency planned to use the site as part of the larger, 34-acre Broadway Corridor project that it hoped would connect the Pearl with Old Town Chinatown and spur new office and residential development.

To ready the property for new construction, Prosper sought bids in 2020 to demolish structures where the U.S. Postal Service formerly processed mail (that work now happens in a new building near Portland International Airport). The agency, which has made atoning for historical injustice against Black Portlanders a key part of its mission, indicated it preferred the work to go to a firm owned by people of color.

One of the companies that bid for the work, Portland-based Northwest Infrastructure, owned by Michael Martin, who is Black, filed a $5.5 million discrimination lawsuit against Prosper, alleging that the agency manipulated bid results to award the contract to a larger company. In response, Prosper eventually canceled the original award, split the work into two parcels, and awarded Northwest Infrastructure a small piece of the work.

Related: Michael Martin Thought Portland Officials Wanted a Black Contractor to Tear Down the U.S. Post Office. He Was Wrong.

Prosper vehemently denied it had acted improperly, but Northwest Infrastructure’s lawsuit dragged on—it endured well beyond the collapse of the Broadway Corridor project, which hit a major setback during the pandemic when Denver-based Continuum Partners, the lead developer, withdrew.

Nonetheless, Prosper continues working toward its goal of developing the Broadway Corridor and, in a report prepared for the Feb. 1 board meeting, said it would settle Martin’s lawsuit—albeit reluctantly—and move on.

In a report to her board, Prosper executive director Kimberly Branam made it clear she was recommending settlement because Prosper’s insurance company wanted to end the lawsuit.

“No evidence has been produced that Prosper Portland discriminated against NWI,” Branam wrote. “Settlement decisions are not based entirely on whether a claim is meritorious. Prosper Portland and its insurer have incurred substantial expenses in the defense of the lawsuit to date, and they expected to spend as much or more through the end of a potential trial.”

Neither Martin nor his attorney responded to a request for comment.

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