Leave it to Costco to try to sneak away with a bargain.
Earlier this month, the Washington-based retailer wanted to plop one of its enormous members-only outlets at Terminal 1, the controversial, Pearl District-adjacent property that might become a homeless shelter in coming months.
And of a handful of offers the Portland Bureau of Environmental Services (BES) received to purchase the 14.5-acre industrial property, Costco's was by far the lowest. Public records released by the city today show the retailer proposed paying $6 million for Terminal 1, $2 million less than the next-highest offer.
In total, the records show, officials got seven formal offers to purchase the property, which Portland City Council declared surplus nearly two years ago, but which had only been on the market since June. Those offers range from Costco's $6 million low-ball to $10 million proposals made by two different entities: A Dallas-based development company and a local developer that proposed building "well over one thousand affordable units" on the industrial site.
Those figures aren't likely to staunch acrimony over Terminal 1.
BES officials had estimated they could get between $8 million and $12 million for the site, considered a rare piece of central industrial land in a hot real estate market. But that process has been scuttled, after a divided City Council last week chose to scrap immediate plans to sell Terminal 1. Instead, groundwork is now being laid for BES to lease all or part of the property to the Portland Housing Bureau, which will seek to set up a 400-person homeless shelter on the site.
Prominent Portland developer Homer Williams is behind that plan. He says private money will pay for most of the shelter, and has been working toward developing a massive homeless campus, dubbed Oregon Trail of Hope, at the site in coming years. That proposal came to light just before Terminal 1 went on the market, and has lead to bitter disagreement on city council—and sparring over how much BES should charge the housing bureau to lease the land.
The offers released today lend credence to the notion that Terminal 1 is in demand—and some say there would have been far more bids without the tug-of-war over the property.
"There were probably three times that amount of inquiries on the property," says Jim Blackwood, a senior policy director for Commissioner Nick Fish, who oversees BES. "Given the action of the council, people who expressed interest and had done some due diligence elected not to offer."
At a council hearing on the Terminal 1 shelter proposal last week, real estate broker Scott MacLean said he'd toured 18 groups through the site, and expected 14 would be interested, though talk of a homeless shelter has "slowed [interest] down a little bit." Potential uses, he said, included space for breweries, greenhouses, and distribution warehouses, along with artist and business incubator space. None of those proposals emerged in the offers released today.
Here's a rundown of those offers.
•$6 million [PDF] from Costco Wholesale Corporation, which wanted to "construct and operate a business-to-business and membership warehouse club and associated parking."
•$8 million [PDF] from a Honolulu-based company that incorporated Terminal 1's address into its name: WPC 2400 NW Front Ave LLC. The company didn't propose a specific use for the property.
•$8.1 million [PDF] from Conax Properties, based in Spokane Valley, Wash. The company didn't propose a specific use for the property.
•$8.25 million [PDF] from Portland-based developer Project, which proposed building a new Portland outpost for "retail fixture company" EYELEVEL. That company included a letter with the pitch that says: "The 2400 NW Front Avenue site is the most ideal location that we have come across and we are looking forward to this as our potential new home."
•$9 million [PDF] from local developer Kehoe Northwest Properties. The company didn't propose a specific use for the property, saying only it would "work in a collaborative manner with Portland City Council to develop an occupancy and usage plan."
•$10 million [PDF] from Lincoln Property Company Commercial, based in Dallas. The company didn't propose a specific use for the property.
•$10 million [PDF] from Portland-based Winkler Development Corporation, which wants to build a large affordable housing project on the site. That proposal says: "With rezoning of Terminal l, we could develop well over one thousand affordable units, and the land cost per home at Terminal l would be tens of thousands of dollars less per unit than other affordable housings sites in Portland." That proposal would likely to have run into some of the same protests the homeless shelter is—a notion that the land should be used to create jobs.