The future of the former Concordia University campus in Northeast Portland is still uncertain nearly two years after the school shuttered. And the reasons that led up to the closure of Oregon’s largest private university are still hazy as well.

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A Multnomah County Circuit Court hearing Friday aimed to offer some clarity. Attorneys on opposing sides of a lawsuit related to the former university are litigating over the fallout from the school’s sudden closure. One of the key parts of that — especially for Oregonians — is how that case might affect the future of the now-empty, 13-acre property.

Last year, a few months after Concordia’s Portland campus closed, the technology company HotChalk sued the university and others connected to it for more than $300 million. By managing its online program, HotChalk helped increase Concordia’s enrollment, allowing the college to grow into Oregon’s largest private university, before it closed. In its suit, HotChalk argues the former university owes it that nine-figure sum due to an illegal breach of contract, fraud and other allegations.

HotChalk is not just suing Concordia Portland. It’s also suing the Lutheran Church Missouri Synod, the organization which supervises the Concordia University System — including the former Portland campus; the Lutheran Church Extension Fund, a nonprofit financial institution that supports Synod organizations through loans and other financial assistance; and others, like individual members of Concordia Portland’s Board of Regents.

Among its claims, HotChalk says the Lutheran Church Missouri Synod’s religious beliefs were a main contributor to Concordia Portland’s closure. At the Friday hearing, Multnomah County Circuit Judge Eric Dahlin didn’t directly rule on that claim from HotChalk.

But, Dahlin made a different judgement that could make selling the former Portland campus a smoother process.

Court decision could accelerate sale of Concordia Portland property

At the court hearing Friday, Judge Dahlin struck down a “lis pendens” that HotChalk had filed on the Concordia Portland property. A lis pendens is a notice letting the public know that a property has a pending lawsuit attached to it.

The Concordia campus in Northeast Portland has sat empty since the university’s closure last year, and the property’s owner — the Lutheran Church Extension Fund, or LCEF — is working on selling it. But the LCEF has said that the lis pendens has made selling it more difficult, by creating a “cloud” over the property’s title, according to legal documents. The LCEF also said HotChalk does not have a direct involvement with the property to justify the lis pendens.

“[T]he fact remains that HotChalk is nothing more than a garden-variety unsecured creditor of [Concordia Portland] that has never possessed an interest of any kind in the [Portland] properties,” a court document from LCEF reads.

Judge Dahlin agreed that HotChalk doesn’t have a direct connection to the property. And he stated since HotChalk is only asking for a monetary reward, the underlying lawsuit doesn’t involve the Portland campus at all.

“Ultimately, this comes down to whether the litigation will impact the property,” Dahlin said. “If there’s just a claim for damages, even if HotChalk wins on this claim, they’re not getting an interest in this property. They would get money … but they wouldn’t get the property itself.”

The LCEF says it owns assets valued in excess of $1.8 billion, and therefore would be able to pay HotChalk regardless of the outcome of the sale or whether it had any interest in the property or not.

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The LCEF also argued that removing that lis pendens would actually be the best thing for either party.

“HotChalk ignores the fact that striking the lis pendens notice would actually improve its prospects for the collection of any money judgement it might obtain against LCEF,” LCEF attorney Thomas Sand wrote in a court document. “Having the lis pendens notice stricken would allow LCEF to sell the property for the highest possible price.”

It’s unclear how quickly LCEF may move to sell the property now that the lis pendens has been stricken.

LCEF spokesperson Joe Russo told OPB before the Friday hearing that the organization has “spoken with several parties who may be interested in purchasing the property,” but he did not offer any further information.

HotChalk seeks to tie Concordia closure to Synod’s interference

The next set of decisions before Judge Dahlin have less to do with the Portland property, but could get to the root of why Oregon’s largest private university closed in February 2020.

HotChalk attorneys hoped to convince Dahlin that the Missouri Synod’s interference contributed to Concordia Portland’s closure. To prove that, HotChalk wants access to the church’s internal communications. But the Synod argued Friday that the company should not have access to roughly 2,000 emails and other records it considers confidential.

In its legal complaint, HotChalk says both the Missouri Synod and the Concordia University System had objected to the Portland campus’ services for LGBTQ students, including its Gender and Sexuality Resource Center and Queer Straight Alliance group. That objection led to interference in the Portland university’s operations, HotChalk claims, including blocking the university from hiring a new president.

Attorneys representing the Synod argued Friday that HotChalk should be restricted from accessing any internal church communications related to religious doctrine, church governance or employment decisions — including any discussion of presidential candidates at Concordia Portland.

Some of the Synod’s sentiment toward Concordia Portland’s actions regarding its LGBTQ community is already public knowledge.

“A club advocating homosexuality is not possible, under the Constitution and Bylaws of the Synod, on a Concordia campus,” the Synod’s president, Matthew Carl Harrison, said at a February 2018 board meeting, according to previous reporting from OPB.

Dahlin did not make a decision Friday on whether to grant the Synod’s protective order and restrict HotChalk from accessing internal documents.

Instead, he is opting to pick 25 random documents out of a pool of records to make a better-informed decision.

“I would need to see something here to have a better idea … to have more context,” Judge Dahlin said.

Dahlin is asking the Synod to either challenge that request or to produce a list of random documents for the judge to choose from by the end of this year.

A trial date has not yet been determined for the case. However, the judge and attorneys spoke about potentially scheduling it for spring of 2023.

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