The Portland City Council is scheduled to vote Wednesday on drawing up a lease that would give the Bureau of Housing control of a site that a prominent housing developer has advocated using as a homeless shelter.

Portland City Council is debating what to do with surplus land at Terminal 1, in an industrial part of Northwest, along the Willamette River.

Portland City Council is debating what to do with surplus land at Terminal 1, in an industrial part of Northwest, along the Willamette River.

Courtesy of City of Portland

Creating a shelter at Terminal 1 is the brainchild of renowned Portland developer Homer Williams. A few months ago, Williams proposed the idea of helping house some of the city’s growing homeless population by opening a shelter on the industrial waterfront property.

Williams has said the plan could be privately financed, with a minimum of government spending.

Housing Bureau Commissioner Dan Saltzman is formally proposing the idea to city leaders Wednesday. The proposal is still very sketchy, without a formal written proposal.

Backers describe a two-fold strategy: an initial conversion of a warehouse at Terminal 1 into a temporary homeless shelter, which could be run legally without a zoning change for up to 18 months under the city’s “Housing State of Emergency.” The second step is the potential construction of a permanent shelter, possibly costing up to $100 million — money that Williams has said would be privately raised rather than using tax dollars.

But the Housing Bureau has to acquire the property first. It belongs to the Bureau of Environmental Services, which has gone through a nearly three-year process to prepare to sell the property as “surplus.” BES has an Aug. 15 deadline for bids from interested buyers. 

The Portland Utility Board is the latest voice calling on the city council to delay Wednesday’s vote until after the deadline.

The board, tasked with supervising Portland’s two utility bureaus, drafted a letter this week articulating their worries about giving the property to the Housing Bureau. Co-chair Kendra Smith said transferring the property just days before the bid process closes could shortchange ratepayers and undermine a public process.

“We don’t take a position on the homeless issue, or what the use is,” said Smith. “It’s more about how we go through the process of the disposition of the property, and making sure that ratepayers are protected and that we maintain the public’s trust.”

The Portland Business Alliance has also requested a delay, so the city can learn Terminal 1’s market value.

Saltzman’s chief of staff, Brendan Finn, told OPB that the city council could still consider proposals through the bidding process, even if they vote to transfer the property to the Housing Bureau.

In defending the timeline, Finn said there was an “absolute need,” and that the city is “desperate for another shelter.”

There’s another reason supporters might want a vote Wednesday: The city faces a deadline Friday to apply for grant money offered by the regional government Metro through its Equitable Housing Planning & Development Grants program. The city of Portland submitted two letters of interest to Metro in June. Neither mentioned the Terminal 1 proposal.

Finn said that the city would withdraw its tentative proposal from the Bureau of Housing that Metro summarized as “Equitable Lease-up Policies – policy evaluation/implementation related to access to affordable housing.” It would instead submit a proposal related to “predevelopment work on the Terminal 1 site to determine feasibility of the Oregon Trail to Hope project,” as it’s called in the Portland City Council agenda for Wednesday.

Metro officials said they have already suggested to Portland that its original idea with a policy focus “would not likely be eligible for this grant program because it concerned access to housing and would not lead to the development of equitable housing.”

Affordable housing advocates generally draw a bright line between “shelters” and “housing,” so it’s not clear if the Housing Bureau’s Terminal 1 proposal would be more eligible.

The Equitable Housing grant program has drawn more requests through letters of intent than its $500,000 total funds available can cover.

Finn also said the council vote is not the last word. He said the joint housing office overseen by the “Home For Everyone” board expects to review a more formal “use agreement” in September.

Saltzman has committed to spend $10,000 per month to lease the land — the same amount the city charged Nike to use the property during recent TrackTown events.

The Bureau of Environmental Services bought the Terminal 1 property for $6.25 million in 2004. BES Commissioner Nick Fish has suggested a sale could draw more than that or leasing the property could bring in as much as $1.2 million per year to the right industrial user.

The Portland Utility Board looked into the Terminal 1 proposal after discussions with Fish. In a recent letter, PUB argued that $10,000 per month is likely far below what the city could get from an industrial customer.

“The PUB urges the Council to ensure that BES customers will be held harmless and fully compensated for the use of the property at market rates,” the board wrote. “The currently proposed floor of $10,000 per month is well below the current market analysis.”