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August 23, 2021

Portland may seize land from failed Midtown development for site of 700-space garage

Photo / William Hall A view of Lot 6, one of four that comprise the site of the failed Midtown project, looking southeast.
By William Hall

A decade after Portland struck a deal with a Florida company to develop 3.25 acres of blighted, city-owned land, and two years after the project dissolved into still-pending lawsuits, the city may soon take back some of the property and build on it independently. 

The City Council is scheduled to vote Monday on whether to begin a condemnation process for a vacant, formerly industrial 1.04-acre parcel at 59 Somerset St., in the Bayside neighborhood.

Lot 6, as the parcel is known, is one of four that were the site of the proposed Midtown development, a sprawling, $85 million complex that would have included 450 housing units, nearly 100,000 feet of retail space and an 800-vehicle parking garage.

The initial proposal by the Federated Cos., based in Miami, called for an even larger development with up to seven high-rise towers. But opposition from some Portland residents led Federated to scale back the project. Ultimately, a complex legal dispute quashed the project.

As the deal fell apart, Federated sued the city in 2019 and the city countersued. The property remains vacant except for piles of gravel Federated has allowed the city to store on the lot, some scrubby plants and trees, and pedestrians on their way to the nearby Bayside Trail or Trader Joe’s strip mall.

Lot 6 remains encumbered with a deed restriction that requires the construction of a parking structure, among other possible uses. Under the restriction, which runs until 2046, the garage must include at least 700 spaces and 30,000 square feet of retail space, and result in the creation of at least 40 jobs. The city still holds $9 million in financing from the Department of Housing and Urban Development to help fund the garage.

Federated purchased the four lots for a total of $2.3 million in 2016. A January appraisal conducted for the city estimates that together they’re worth over $13.5 million, although Federated recently contested that finding. The value of Lot 6, without the adjacent parcels, was negligible, according to the city's estimate.

If the council approves the process to take Lot 6 by eminent domain, Monday’s vote would be followed by a Sept. 8 public hearing on the condemnation order.

The council meets virtually Monday at 5 p.m., and more information can be found here.

Editor's Note: This article has been revised to clarify several details about the Midtown project.

Courtesy / City of Portland
This aerial view shows the four Bayside lots owned by the Federated Cos., and that would have been the site of the Midtown development: counterclockwise from lower left, Lot 1, Lot 3, Lot 6 and Lot 7. Lot 6 is the parcel considered for possible condemnation.

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4 Comments

Anonymous
August 25, 2021

Who in their right mind included the codicil about building mega-parking in the midst of valuable retail and residential space? Where's the METRO on this - it's like a revenue boon for them?

Anonymous
August 24, 2021
Facilitating the use of car is not what we need right now - or ever again for that matter. If you build garages, more cars will come. And we need to think outside of car-forward urban planning to make our city more enjoyable for everyone.
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