At the corner of Southwest 3rd Avenue and Oak Street lies an empty, weed-filled lot that may be the most costly dirt in the city's history.

The lot is on its way to costing its owner nearly $5 million—more than four times what it's worth. Despite the land's prime location, there are no plans to build on it. And the owner's financial obligations last another 293 years.

That's not a typo—293 years, as in nearly three centuries.

Who got stuck with such a loser of a deal?

That would be you.

City of Portland taxpayers are on the hook for the land and its growing costs, thanks to an overly ambitious—and ultimately failed—plan to build a 26-story condo tower on the site.

But the true cost of the deal—struck more than a decade ago—became public this month, buried in an audit report sent to the City Council. The audit has forced the Portland Development Commission to come clean about the exposure it created for Portland taxpayers.

"The Oak Street parking deal is consistent with PDC's history of wasting our property-tax dollars," says developer Randy Rapaport.

Here's what happened.

In 2002, the PDC, the city's economic development agency, bought the parcel at the northeast corner of 3rd and Oak. The agency paid $1.2 million for the quarter-block of land, records show, well over its appraised value of $850,000. 

The PDC often stockpiles land, using urban renewal money to purchase property to encourage the kind of development the agency wants.

In 2005, the PDC announced it would give the land at no cost to Trammell Crow, which planned to build a condo tower on the site. The subsidy, the agency said at the time, was granted in exchange for an agreement that Trammell Crow would offer some of the units at below-market prices in order to create what the city defines as affordable housing downtown.

But the deal had one long string attached: 32 underground parking spaces controlled by a company owned by trial lawyer Bob Stoll. His firm, Stoll Berne, has offices next door in the old Police Headquarters Building at 209 SW Oak St.

The PDC agreed to preserve the underground parking spaces—or pay to provide new spaces. In the fine print, the city agreed to the guarantee for 99 years, and gave Stoll the option to renew the 99-year agreement—twice.

But the Trammell Crow deal collapsed in 2007 under the weight of uncertainty in the housing market and a dispute whether the building project would pay union wages. The proposed land giveaway so incensed then-City Commissioners Erik Sten and Randy Leonard they placed a measure on the 2007 ballot curtailing the PDC's autonomy in future. 

The measure passed, leaving the PDC more accountable to city commissioners, but also holding a very expensive bag at 3rd and Oak.

PDC officials, so confident they would cut a deal with Trammell Crow, had already demolished the parking garage at a cost of $500,000.

Up to that point, the parking agreement with Stoll hadn't cost the city anything. But once the PDC demolished the garage, the agency had to start leasing the parking spots for Stoll.

Today there's nothing at the lot except a few cigarette butts and a depression where the underground lot used to be. 

Meanwhile, city auditors discovered the PDC wasn't accounting for taxpayers' long-term costs to fill the agreement with Stoll: $3.2 million.

With the money spent on the property, the bill for the empty lot hits $4.9 million.

PDC public affairs director Keith Witcosky says his agency had confidence it could find a buyer for the lot and could pass the parking obligation to Trammell Crow or another developer. 

"The way you did things was to prepare the site by demolishing the existing [parking] structure," Witcosky says. "[The block] is in a pocket that missed the wave of development."

A PDC memo says the city now has three options. First, it could sell the land and unload the long-term obligation, if it could find a buyer. 

Second, the city could rebuild the underground parking garage to provide the spaces. Cost: $2.8 million.

Or, third, the city could negotiate with Stoll to settle the matter. 

As the PDC’s Witcosky acknowledges, “That probably won’t happen.”