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Portland’s commercial real estate crisis has arrived at the door of one the city’s most storied developers.
Metropolitan Life Insurance Company sued John W. Russell for breach of contract on a $63 million loan for the “Black Box,” a 390,000-square-foot office building at 200 SW Market St. that sits atop a retail plaza like a black obelisk.
MetLife, based in New York, filed its suit in Multnomah County Circuit Court on June 23. It seeks a judicial foreclosure.
Russell, 80, started his career as a partner at Melvin Mark Properties in 1970, according to his LinkedIn profile, and has been active in Portland real estate ever since.
Russell bought the building at 200 Market in 1988 for $21.5 million, according to county records.
According to MetLife’s complaint, the trouble started when a large tenant of the building, Regence Blue Cross Blue Shield of Oregon, let its lease expire.
Soon after, MetLife and Russell agreed to set up a reserve account with cash to be used for improvements aimed at attracting a new, sizable tenant, something that has been in short supply in Portland since the 2020 pandemic and subsequent riots prompted companies to leave town.
Russell and 200 Market Associates failed to make payments into that account on Aug. 1, 2023, “and each subsequent month thereafter,” MetLife says in the complaint.
MetLife says it warned Russell about the default in letters it began sending in August 2023 through May 1 of this year.
“Despite these multiple notices from lender, borrower failed to cure the existing events of default,” MetLife says.
In a brief telephone interview, Russell called the suit “old news.”
“There are issues with my lender,” Russell said, “but nothing will change.”
Regence leased 60,000 square feet of space in the building.
In his LinkedIn profile, Russell says he bought the building in 1988 in a partnership with Blue Cross of Oregon. Occupancy averaged almost 100% for years, he says in the profile.
For the past several years, Russell has aggressively pitched City Hall on a redevelopment of the Keller Auditorium, the performing arts venue that stands across Market Street from the Black Box.
