PORTLAND TRIBUNE: JONATHAN HOUSE - A majority of the City Council supports using this 96,000 square foot warehouse at Terminal 1 for a homeless shelter.Less than an hour after the City Council agreed to lease Terminal 1 for a homeless shelter, Portland attorney John DiLorenzo told city officials that he will sue to stop the lease if the monthly cost is not significantly increased.

After a lengthy hearing Wednesday, Aug. 10, the council voted 3 to 2 to let the Portland Housing Bureau lease Terminal 1 from the Bureau of Environmental Services for $10,000 a month, plus additional expenses incurred by BES.

But in an Aug. 10 email to City Attorney Tracy Reeve, DiLorenzo wrote that the lease must be at market rates. During the hearing, and in written documents, BES estimated the market value at up to $1.2 million a year, which would make the monthly payments closer to $100,000.

DiLorenzo represents BES and Portland Water Bureau ratepayers in an ongoing lawsuit that accused the council of illegally spending ratepayer funds on numerous occasions. Multnomah County Circuit Judge Stephen Bushong has ruled that ratepayer spending must be reasonably related to the bureaus' primary missions.

“It is obvious that the arrangement outlined in the ordinance deprives the sewer ratepayers of significant value," DiLorenzo wrote, referring to the ratepayer case. "We believe the action is tantamount to commanding the sewer fund to deprive itself of value to perform a service which has no reasonable relation to the provision of sewer services, in blatant violation of the orders which have so far been issued in the Anderson v. City of Portland case which is still pending in the circuit court.

“If the City Council does not within the next 10 days rescind the ordinance or increase the rental rates to match current market rents, we will file a supplemental complaint and ask Judge Bushong for a declaratory judgment or injunction declaring the arrangement as a violation of the charter.”

Commissioner Nick Fish, who is in charge of BES, repeatedly made the same point during Wednesday’s hearing. He was supported by representatives of the Portland Utility Board and the Citizens Utility Board, who said the interests of BES ratepayers must be protected.

Charges for Nike track meet

BES bought the 14-acre property from the Port of Portland to be used as a staging ground for the Big Pipe project. It is being sold by BES through a surplus sales process approved by the council.

The property is zoned industrial. Fish believes good-paying industrial jobs should be created on it, and the proceeds of the sale should be used to hold down future BES rate increases. Bids are due Monday, Aug. 15.

The idea of using Terminal 1 as a homeless shelter was proposed by developer Homer Williams, who envisions it ultimately being converted to a multi-service center for the homeless. The proposal was presented to the council by Commissioner Dan Saltzman, who in in charge of the housing bureau.

Saltzman says the monthly payment should be $10,000 because that is what BES charged Nike to build an indoor running track and hold track meets in the warehouse earlier this year. Fish said that amount was chosen to cover the bureau’s costs before the market value of the property was set by two subsequent partial leases on the property and the real estate broker who is helping to sell it.

Saltzman's office declined to comment on the threatened suit because it is a potential legal matter.

For a Portland Tribune story on the hearing and vote, go to

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