Despite settling design issues, Allegro sale now may be a no-go
Even in a depressed housing market, some deals may be just too good to pass up. For instance, how about this? A half-block of Goose Hollow property five blocks from downtown — for $1. That’s how much the developers of the proposed 158-condominium tower called the Allegro arranged to pay TriMet for the property three years ago. It appears that in two weeks those developers will default on their deal with TriMet, leaving potential buyers lining up, hoping to get the same deal. TriMet wants to sell the property, especially to a buyer who will build something for people who will use the underutilized MAX station near the site. Feb. 10 is the closing date for the development agreement between TriMet and California developer M. David Paul and Associates. By then, the developer needs to show it has obtained the necessary city permits and that it has sufficient financing to complete its proposed 20-story tower on Southwest 18th Avenue across from Lincoln High School. But a November letter sent to TriMet by the developer makes clear that it isn’t going to meet the deadline. And it doesn’t sound as if TriMet is open to the idea of an extension. “Our view is the way the agreement reads, it’s over after Feb. 10 if the conditions to close haven’t been met,” said Jillian Detweiler, TriMet senior planner. The Allegro was the focus of neighborhood and City Hall attention in 2006, when questions were raised about its size and the transfer of development rights that made its size possible. Neighborhood opposition changed the Allegro design, and forced a building considerably smaller than originally proposed. Construction was supposed to have begun on the Allegro last summer, but never did. Paul Krueger of M. David Paul wrote TriMet that the slowdown in the condo and financial markets “makes it impossible to obtain reasonable financing on this type of development.” Detweiler said that TriMet already has fielded inquiries from other developers. The $1 purchase price may be part of the reason. It was offered by TriMet, even though the property was appraised at more than $2 million in 2003, because of problems at the site, Detweiler said. Anyone who develops the site is required by TriMet to produce 76 public parking spaces that were lost when the MAX line along Southwest 18th Avenue eliminated on-street parking. Also, a large city sewer pipe runs beneath the site, and a developer will have to replace the pipe, estimated at a cost of $450,000. Detweiler said this week that a new appraisal may come before attempts to sell the property again, and that given the state of the Portland condo market, a project that doesn’t depend on market-rate housing — such as a subsidized-housing building — might make more financial sense. “These market cycles happen, but it’s a disappointment. There was a lot of energy by a lot of people put into this,” Detweiler said. A lot of money, too. In his letter to TriMet, Krueger said that his company already had invested about $2.5 million in the Allegro.