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City puts its stock in port property

$6.3 million purchase replaces lease of 16 acres at Terminal 1

The city hopes it is getting a good deal in its $6.3 million purchase of nearly 16 acres at Terminal 1 from the Port of Portland.

Right now, the site is being leased by the city for use through 2006 as the staging area for its combined sewer overflow project. Eventually, the hope is to develop the site or sell it for a profit.

'Rather than do the lease, we decided to purchase it and have an asset at the end,' said Linc Mann, spokesman for the city's Bureau of Environmental Services.

City officials aren't exactly sure just what they will do with the property once the sewer project is done. 'We'll put it to productive use, but what that use is we don't know,' Mann said.

The city leased the parcel from the port for $3 million last year.

The City Council is expected to approve the purchase of the land sometime in the weeks ahead; the port agreed to the sale this week.

Three years ago, the port sold an adjacent parcel Terminal 1 South to Riverscape LLC, which is undergoing site preparation in anticipation of residential development. The Terminal 1 South parcel is in the River District Urban Renewal Area, but the north parcel being purchased by the city is not.

Bruce Allen, urban renewal manager for the River District, thinks that the city's site will be marketable but probably not for residential use. 'It will be a great opportunity to bring in some new light industry or light manufacturing when they're all done,' he said.

Port officials had been uncertain what to do with the Terminal 1 North property. They considered but rejected developing it as industrial property, rezoning it for commercial or residential use or re-establishing it for maritime use, said port spokesman Aaron Ellis.

Re-establishing the site for use as a shipping terminal would mean big expenditures, including reinforcing the docks, installing cranes, improving the roads to handle heavy traffic and dredging the river where sand has built up.

The space has been used for storage and for parking empty ships since the port stopped using it as a shipping terminal in 1989.

Ellis said the site has no contamination to be remediated and is not included in the Willamette River's federal Superfund designation. An adjacent parcel, he said, has a leak from an old fuel line that once carried bunker fuel to river ferries. The line was in use before the site became a shipping terminal in the 1940s.

In the sale, the city will receive credits for rent and tunnel construction easement fees paid before the June 30 closing date. The port must pay $25,000 for maintenance services for the facility.

Prefab concrete pipe for the sewer project already is being assembled at the site. Tunnel-boring machines will be sent to the bottom of the 120-foot shaft, and the tunnel spoils will be used for fill at Ross Island.

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