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Real estate developer John Russell rallied a who’s who list of prominent Portlanders, including former Congressman Earl Blumenauer and billionaire Jordan Schnitzer, in his fight to keep a downtown building out of foreclosure.
Russell owns the “Black Box,” a 390,000-square-foot office building with shaded windows at 200 SW Market Street that sits atop a popular retail plaza.
Metropolitan Life Insurance Company sued for foreclosure on the building in June, arguing that Russell had failed to put money into an account reserved for improvements aimed at attracting new tenants. That requirement went into effect in 2023 when Regence Blue Cross Blue Shield of Oregon, the building’s largest tenant, said it planned to occupy less space.
In his answer to MetLife’s complaint, Russell called MetLife’s action “puzzling” and “unwarranted” because the $63-million loan on the building is being paid.
“The predicate for MetLife’s motion is a technical and non-material `default’ in one of the ancillary agreements to the loan agreement between the parties that does not pose any real threat—indeed, it hardly poses even a theoretical one—to the partnership’s loan performance or the overall viability of the building," Russell wrote in his response to MetLife, filed in Multnomah County Circuit Court on Aug. 22.
A hearing on the matter is scheduled for Friday. The building is owned by Russell through an entity called 200 Market Associates LP.
Russell, 80, is a fixture in Portland development. He built the PacWest Center, a 30-story, aluminum-paneled building at 1211 SW Fifth Avenue. Russell bought the building at 200 Market in 1988. Occupancy has averaged 99% ever since, Russell says.
“There are important legal points at issue here, but I’ll leave those details to the attorneys,” Russell said in a statement to WW. “What matters to me is the outpouring of support by the Portland community. I’ve been very moved by the numerous tenants and community members who have submitted declarations on my behalf.”
Parties submitting declarations argue that Russell, who has a track record of civic service, would be better at revitalizing downtown Portland than an out-of-town lender that brings in a receiver and classifies the building as distressed. A receiver is a custodian appointed by a lender to manage a troubled building.
“Every asset needs management,” former Portland Mayor Charlie Hales wrote. “But there is a level of care higher than simple management, which we usually describe as stewardship. Management is generally available, stewardship is rare. Good management is expensive, stewardship is priceless.”
Blumenauer, meantime, said he knew “very few people with John’s record of public service and care for the city of Portland.”
Schnitzer, a fellow developer, wrote that he has known Russell for 40 years, having met him through Henry Lorenzen, Russell’s roommate at Harvard Business School.
Russell’s “commitment to work with every mayor and city council member over the last 40 years, as well as being chair of the Oregon Investment Council, and so many other nonprofit organizations, in my opinion puts him on a pedestal that few in this community could reach,” Schnitzer wrote.
Russell chaired the OIC, which oversees the state pension funds, from 2015 to 2023. He was elected chairman of the council in 2020.
As for the improvements fund, Russell says he spent $4,685,000 on buffing up the building, a “substantially similar amount” to the $4,738,680 that MetLife claims he owes to the fund because Regence downsized.
“To be clear, MetLife doesn’t complain that the funds in question were not, in fact, used for the purpose of attracting new tenants—it simply laments that those funds were not first placed in a reserve account before being utilized," Russell says in his response to MetLife.
MetLife could not be immediately reached for comment.
