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New plan emerges for future of aging Portland Building

PORTLAND TRIBUNE FILE PHOTO - The exterior of the Portland Building is controversial but it's the construction that is causing problems for the City Council.If Fred Miller gets his way, all of the employees will be moved out of the Portland Building in 2017.

The interior of the city’s primary office building will be gutted and rebuilt, much of the exterior will be removed and replaced, and it will reopen for work three years later.

The cost? A maximum $175 million in 2015 dollars, financed mostly by bonds repaid by increased rents charged to the agencies that occupy the building. With inflation, the project will be capped at $195 million in 2020 dollars.

Miller is the Chief Administrative Officer and director of the Office of Management and Finance for the City of Portland. He plans to present his proposal for the aging building to the City Council on Oct. 21. According to Miller, if the council doesn’t approve the plan then, the cost will only increase as time passes and the building continues to deteriorate.

“The next time they look it it, the cost could be $250 million,” Miller says.

Mayor Charlie Hales, who is in charge of OMF, has reviewed the proposal and thinks it is sound, says his spokesperson, Sara Hottman.

It is unclear whether a majority of the council will support Miller’s proposal, however. Commissioner Steve Novick has been the most vocal member in support of preparing the building for a large earthquake. But, even though he has been briefed about the proposal, Novick says he has questions about it. He declined to detail them to the Portland Tribune, however.

Miller knows the vote won’t be easy. The city is facing a wide range of pressing financial demands, including a homelessness and rent crisis that caused the council to declare a “housing emergency” on Oct. 7, a campaign by the Portland Police Association to hire 700 more officers to fight crime, a $2 billion street-paving shortfall, the opportunity to purchase and prepare the downtown U.S. Post Office site for development for $115 million, a minimum $35 million repair and renovation bill for the aging Veterans Memorial Coliseum, and unknown Portland Harbor Superfund cleanup and Columbia River levee repair costs.

In the face of these demands, spending up to $195 million to improve the working conditions for approximately 1,300 city employees might seem a little insensitive.

And renovating the building will not satisfy those who prefer it be torn down. Since it opened in 1982 as the first postmodern building in an American city, the Portland Building has been widely criticized for its outlandish design and colors. But it also has been praised by preservationists, who respect architect Michael Graves’ bold alternative to the uniformity of the boxy glass towers that have come to dominate urban skylines. The building’s unique design helped get it added to the National Register of Historic Places in 2011.

But Miller insists the council doesn’t really have a choice. The 33-year-old building will not survive the large Cascadia Subduction Zone earthquake predicted to hit the region in the future, even though it houses agencies and equipment deemed essential to the city’s recovery. Persistent water leaks on numerous floors are undermining its structural integrity and could lead to mold infestations. Additionally, the interior was poorly designed and constructed, leading to employee and public complaints.

Miller also insists his plan is the best of all possible options.

Demolition, moving are expensive

When Miller came to the city several years ago after a lengthy administrative career at the State of Oregon and Portland General Electric, the city was considering spending $95 million on the Portland Building to attempt to stop the leaks again and bring it up to current earthquake standards.

Miller was not comfortable with the estimate and was not sure that was the best plan, considering the building’s other shortcomings. So he appointed a high-powered advisory group that includes some of the biggest construction-related names in town: Tom Walsh, president of Tom Walsh & Co.; Bing Sheldon, FAIA, retired founder and chairman of SERA Architects; Roger Roper, Deputy State of Oregon Historic Preservation Officer; John Russell, founder of Russell Development; Bob Ball, principle at Astor Pacific LLC; and Ralph DiNola, CEO of New Buildings Institute.

Working with city staff, the advisory group considered a wide range of options. They included demolishing and replacing it, or constructing a new building in adifferent part of town. All of the options cost more than $175 million, with the additional costs ranging from $40 to $51 million, in 2015 dollars. Demolition alone is estimated at $25 million.

Miller also wants the council to increase the rents paid by the agencies that will occupy the renovated buildings. The potential increases would be substantial. Miller says they currently are paying approximately $16 per square foot. The new rents could be around $50 a square foot. The increase could be brought down to about $30 a square foot, Miller says, if the council equalizes the rents paid by all city agencies in all city-owned buildings.

On Oct. 21, Miller will ask the council to approve three ordinances to move the project forward. Among other things, the ordinances will direct that no more than $195 million in 2020 dollars be spent to complete the project by then. Approximately one-third of the money would be spent relocating the existing employees to unknown locations. while the project is underway. The location of their temporary quarters has not yet been determined.

“There are still a lot of details to be worked out, but something has to be done,” Miller says.

Building and housing costs

The Portland Building hearing is scheduled as the council increases its focus on homeless and affordable housing issues. Scheduled and ongoing efforts include:

• The council will consider the use of surplus city funds to finance a program to prevent the eviction of low-income women at the annual fall budget adjustment hearing on Oct. 27.

• The council will consider a "linkage fee" on new developments that increase housing costs to help fund affordable housing projects at an Oct. 28 council hearing.

• The Mayor's Office and A Home for Everyone will identify city-owned properties that can be converted to homeless shelters. A Home for Everyone is a joint city-Multnomah County initiative intended to reduce homelessness. The former Sears Armory outside of Multnomah Village in Southwest Portland already is under consideration.

• The city will relocate the Right 2 Dream Too homeless camp in Old Town to Oregon Department of Transportation property in inner Southeast Portland.

• The Portland Housing Bureau will sign agreements with developers to spend $60 million in previously allocated urban renewal funds on affordable housing projects in various parts of the city.

• The council will identify the source for $20 million in new homeless and housing assistance funds promised by Hales as part of a $30 million agreement with Multnomah County Chair Deborah Kafoury.