City Offers Fourth Avenue Building to University

PORTLAND-The City of Portland is offering to sell its seven-story, 140,000-sf portion of the 194,000-sf Fourth Avenue Building to Portland State University for $24 million, which is equal to the amount of debt on the property. Portland State University already owns the remainder of the building, located at 1900 SZ Fourth Ave., and is in need of additional facilities.The university’s vice president of finance and administration Jay Kenton tells GlobeSt.com that as currently discussed no cash would trade hands, PSU would simply assume the debt, which carries an interest rate in the 4% range and matures in 2018. “They asked if we would have an interest and we said sure, we’d talk to them about it,” says Kenton. “It looks like a pretty good deal; they would agree to lease back some of the space.”Kenton says the city wants to move forward with the sale this fall. Ron Bergman in the city’s Bureau of General Services acknowledged the possibility. “We’ve talked about it in general but haven’t come to any specifics,” he tells GlobeSt.com. “We’re exploring the possibility.”The city’s licensing department recently moved out of the building and the city’s urban renewal agency, the Portland Development Commission, is moving out of the building this fall. That will leave about one-third of the city’s portion of the building vacant. PSU’s portion of the structure is leased long term to PacifiCorp. The locally headquartered company in January signed a seven-year extension of its lease that commences in mid-2006, when its current lease term expires. In need of extra space, PSU recently signed a five-year lease for the 12,227-sf top floor of the nine-story AT&T Wireless Center building at 1600 SW Fourth Ave. The space will house the university’s Regional Research Institute for Human Services, which is part of the university’s Graduate School of Social Work. In addition to the purchase of 1900 SW Fourth Ave., the university also recently proposed a $42-million, 130,000-sf development that would include a student recreation center topped by 130 units of housing on Southwest Market Street between 11th and 12th avenues.