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Real estate developer John Russell won a battle over the fate of his downtown building known as the “Black Box” last week when a Multnomah County circuit judge ruled that the lender on the property couldn’t appoint a receiver to take control of it.
The lender, Metropolitan Life Insurance Company, sued for foreclosure on the building, called 200 Market, in June, arguing that Russell had failed to put money into an account reserved for improvements to attract 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.
MetLife asked the court to appoint a receiver for the building, a boxy 390,000-square-foot tower with tinted windows at Southwest Market Street and 1st Avenue that sits atop a popular retail plaza. A receiver is a custodian appointed by a lender to prevent a troubled building from falling into disrepair.
But MetLife failed to prove that Russell’s continued control of the building would harm the property, Multnomah County Circuit Judge Kelly Skye ruled.
“I don’t have evidence in the record right now from which I could find harm,” Skye said near the end of the one-day hearing last Friday.
Russell, 80, built the PacWest Center, a 30-story, aluminum-paneled building at 1211 SW 5th Ave. He bought 200 Market in 1988 for $21.5 million. Occupancy has averaged 99% ever since, Russell says.
Russell rallied Portland’s old guard to vouch for his ability to care for the building during any financial trouble. Former Congressman Earl Blumenauer and billionaire developer Jordan Schnitzer submitted declarations supporting Russell, saying he would be a better custodian than an out-of-state receiver.
MetLife called its witnesses in the morning, and Russell’s attorney’s cross-examined them. MetLife rested its case before lunch. Russell’s attorneys planned to call their own witnesses in the afternoon but opted not to.
Betting that MetLife had not met its burden of proof, Russell’s attorneys moved for a “directed verdict,” a ruling by a trial judge in favor of one party after the other fails to present evidence compelling enough to go to a jury.
“John Russell and 200 Market won this resoundingly, and so did downtown Portland,” said Anna Sortun, managing partner at the Tonkon Torp law firm.
David Criswell, an attorney for MetLife, didn’t return an email seeking comment.
Russell isn’t out of trouble on 200 Market. MetLife’s foreclosure case will proceed with a new judge. That case could take many months, Russell’s attorneys say.
