MAYOR CHARLIE HALES is not a man who likes to talk about his missteps—but he came awfully close this month.

"We've got to always remember to wander around the building and check in with the other four voting members of this council," Hales told the Mercury on March 22. "I think there's been a time or two where we didn't do that enough."

The mayor was referencing an ongoing drama that hit new heights last week and saw the city twice reverse course on a controversial no-parking development on SE Division—angering, and then appeasing, neighbors and city commissioners who felt left out of the loop.

The dust-up has cemented the dormant 81-unit 37th Street Apartments as a chief battleground in the fight over how Portland grows. It also could set the stage for fresh litigation.

The project at SE 37th and Division has been stalled since late February, when the Oregon Land Use Board of Appeals (LUBA) ruled that the building didn't have a door where it should.

That ruling was a victory for neighbors, who fear the project's lack of parking will result in choked streets. Neighborhood groups began gearing up to fight a fresh application for permits.

But they weren't expecting the Portland Bureau of Development Services (BDS) to change the rules, allowing builder Dennis Sackhoff to revise his former application instead of submitting a new one (thereby skirting a public hearing).

BDS, in communication with Hales' staff, did just that on March 18, announcing the decision only after Sackhoff filed a revised application the next day, Tuesday, March 19—after an appeals window had closed.

Cue outrage.

Concerned neighbors called BDS a "rogue agency" and accused officials of colluding with Sackhoff. City Commissioners Steve Novick and Nick Fish called out the mayor's office for not keeping the public better informed.

"In my mind this is a pretty clear circumvention of the LUBA order," says Ty K. Wyman, a Portland attorney representing the group Richmond Neighbors for Responsible Growth in a fight against the project. "My people are just beside themselves."

Then on Thursday, Hales backpedaled, announcing the project would require a new permit application after all, and that backers won't be able to apply until April 11. That's a week after council is set to take up proposed amendments that could force future developments—the 37th Street Apartments included—to provide on-site parking.

Asked about the flap last week, the mayor distanced himself from BDS' decision to allow a revised permit.

"I can't do as good a job as other people in this office of telling you all those details because, actually, I wasn't all that personally engaged in them," Hales said. He conceded mistakes in communication, but said that's primarily because it's so rare a city permitting decision is reversed.

"Frankly that just caught the institution of the City of Portland—whether you want to talk about planners or city attorneys—a little bit by surprise," Hales said. "And although people in the building got pretty concerned about this, and certainly there are a lot of people in the community concerned about it, in my opinion there is no villain."

It's doubtful the dormant project's developers share the sentiment. Michael Robinson, Sackhoff's attorney, said Monday he feels the LUBA ruling is being improperly used as leverage to saddle his client with new building requirements.

How does Sackhoff plan to react? Robinson wouldn't say, noting he's not one to rattle his saber.

"What concerns me the most is the lack of desire to follow the rule of law," Robinson said. "We have an amended application in. We expect the city to act on it."