DDA Gets Nod for $65M Condo Project

PORTLAND-The Portland Development Agreement recently signed off on a revised disposition and development agreement for a $65-million condominium development on one of last undeveloped parcels in the RiverPlace district. The property is located just north of the Marquam Bridge on the west bank of the Willamette River. The DDA, with an LLC led by local developer Homer Williams, has been in existence in one form or another since late 1999. Current plans call for RiverPlace Partners LLC to pay $3.67 million for the 2.5-acre property and build on it 210 for-sale residential units in three 12-story residential towers and a separate 8,000-sf riverfront restaurant. The sale is expected to close before the end of the month, with construction set to begin in November and take 24- to 30 months to complete.Located immediately southeast of the intersection of Southwest River Parkway and Moody Avenue, the site is the former home of the Lincoln Steamplant. The PDC acquired the site from Pacific Power & Light in 1985 and for the last eight years has been working with the state Department of Environmental Equality to clean up the property. The agency recently received a $200,000 EPA grant to complete asbestos cleanup related to the demolition of the plant that will clear the way for development.In late 1999, the PDC and Williams inked the original DDA for the parcel. It called for one hotel tower and one condominium tower, but the hotel financier eventually walked away from the deal. In August 2001, Williams brought on board Seattle-based Gordon Sondland (the new hotel partner, working with Inter-Continental Hotels) and a new DDA was approved that called for a 110-room luxury hotel and two other residential buildings containing 170 condominiums.According to that DDA, Williams was to pay $3.6 million for the property by the end of the year and then flip the hotel parcel to Sondland for $1.8 million, who would immediately begin a hotel feasibility study to satisfy Inter-Continental. The low purchase price for the property came with strings attached: if the condos cost less than $54.4 million to develop, the PDC was to get half of any savings, and if revenue from their sale exceeded $64.1 million, the city was to get half of that excess. With regard to the hotel, the PDC was to get half of the estimated $250,000 “opportunity fee” that Sondland was to pay Williams. However, by April 2002, plans changed again, with Williams and Sondland delaying the hotel project and bringing on local condominium developer John Carroll to focus on developing the condominiums first. Later that year, the PDC denied Williams’ request to raise the height limit on the property to 200 feet from 150 feet. By mid-2003, Carroll and Sondland were no longer involved in the project and the hotel portion of the project was tossed out altogether in favor of additional for-sale residential units and a destination restaurant. Also tossed out of the DDA was the city’s participation in any development savings and unit sale profits. At last check, Williams’ was working on the project with local developer Jack Onder, but that could not be confirmed Thursday afternoon.