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Fish, Saltzman spar over lease cost of proposed homeless warehouse

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PORTLAND TRIBUNE: JONATHAN HOUSE - Commission Dan Saltzman has proposed using this warehouse at Terminal 1 as a homeless shelterCommissioners Nick Fish and Dan Saltzman seriously disagree how much the Portland House Bureau should pay to rent Terminal 1 for a homeless shelter.

On Wednesday afternoon, Fish's office released an email saying a market value lease could be almost $1.2 million a year, based on a assessment by a broker and two current leases for potions of the 14-acre property in Northwest Portland.

Saltzman responded by saying it should be $10,000 a month, which is how much it was leased to Nike for an indoor track facility earlier this year, before the assessment was made and the current leases were signed.

The council will consider a proposal by Commissioner Dan Saltzman on Aug. 10 to use the 96,000 square foot warehouse at Terminal 1 for a homeless shelter for up to 18 months, after which a decision must be made on whether to make it permanent.

Terminal 1 is owned by the Bureau of Environmental Service, which is overseen by Fish. It has been declared surplus and is currently being sold as industrial property by BES.

Mayor Charlie Hales and Commissioner Steve Novick have expressed support for Saltzman's idea, however.

Here is the statement released by Jim Blackwood, Fish's senior policy director, on Wednesday:

We have consulted with our Broker, Colliers International and now have the most recent market value rent for the entire Terminal 1 property, surface and warehouse.

"The most recent market Total is $925,920/year for the building and land.

If you add in the dock space along with the dock moorage – this would increase to $1,196,328/year.

The Broker did the following analysis:

There are four components of the 2400 NW Front Ave property that could potential generate lease income.

The 96,000/SF industrial building with 4 acre of land has a current lease rate value of $0.35 per square foot NNN. ($33,600 per month)

The 10 acres of fenced, paved yard storage area would rent for $0.10 per square foot NNN. ($43,560 per month)

The 1,600 linear feet of dock moorage would rent for $10 per linear foot per month. ($16,000 per month)

The 3 acres of surface dock area could rent for $.05 per foot per month NNN. ($6,534)

The current industrial vacancies are at historic lows though out the Portland area and NW Portland remains one of the strongest submarkets. I following is a link to our most recent industrial marketing report.

BES is currently renting the property to 2 parties. One is using surface area only at $.10 a sq ft. The other is renting suface ($.10 sqft) and part of the warehouse at $.30 sqft. The warehouse rate reflects the market rate before this most recent update of market factors. Those parties will continue to rent the property, and BES will continue to receive that rent, until Council directs otherwise.