Updated 1:52 p.m. Sunday



Multnomah County commissioners approved the $10.8 million sale of the long-empty Wapato Jail and earmarked the proceeds for affordable housing. The sale represents a loss of tens of millions of taxpayer dollars.

The Board of Commissioners voted 4-1 Thursday to sell the property to Kehoe Northwest Properties. The lone "no" vote came from Commissioner Loretta Smith, who said the facility should house a homeless shelter or offer related services. Current zoning prohibits the use of the building as a shelter.

The county received six proposals by its Oct. 20 deadline. One was immediately withdrawn, and only two of the remaining bidders submitted "best and final" offers. Of those, county officials chose Kehoe.

Portland developer Marty Kehoe has said that he plans to convert the 155,400-square-foot facility into a distribution and storage space for a medical equipment company.

Wapato Jail sits on 18.24 acres in Portland's Rivergate Industrial Park and has long been a thorn in the county's side.

The county spent $58 million to construct the jail in 2004 and another $300,000 a year to maintain it. While it has been rented out for movie productions, the facility was never used as it was originally intended. The building was appraised for industrial use for $8.5 million in 2014.

The approval of the sale comes shortly after the county hired commercial real estate firm CBRE to market the property, in an attempt to recoup a fraction the millions it has sunk into the jail in the past 20 years.

Trevor Kafoury, cousin of County Chair Deborah Kafoury, is an executive vice president for CBRE in Portland. In an email, county spokeswoman Julie Sullivan-Springhetti said CBRE won the contract through the county's standard business procurement process. Chair Kafoury had no role in the process to hire CBRE, she said, and Trevor Kafoury has no role in marketing county property or supervising those who do.

Though Deborah Kafoury did disclose the connection, this was not required, Sullivan-Springhetti said. "Neither county policy nor Oregon ethics law include cousins within the definition of 'relative' for declaration of potential conflicts of interest unless the elected official or spouse is providing or receiving support from the cousin," she wrote.

Because the jail was built with tax-exempt bonds, the county was barred from selling the site to a private owner until those bonds were paid off, on Oct. 1, 2016.

The board voted unanimously to dedicate the sale proceeds to affordable housing. The money will go toward a pledge by the county, Portland and Home Forward (formerly the Housing Authority of Portland) to develop at least 2,000 units of permanent supportive housing by 2028. That plan was unfunded until now.

"This is a lot better than letting the building sit vacant, gobbling up operating dollars that can be spent on truly needed priorities like housing and mental health services," Chair Deborah Kafoury said. "We can't change the fact that decades ago Multnomah County made a terrible mistake and built a jail we don't need. But what we can do is ensure it doesn't happen again."

As Portland has struggled to house an increasing number of homeless people, city leaders and developers have offered up unorthodox locations for shelters.

These include an industrial warehouse in Northwest Portland – Terminal 1 – and Wapato Jail, both of which critics have said were too far from central-city facilities that provide meals, showers, health care and other services.

And according to the county, operating Wapato as anything other than a jail would cost an initial $950,000 plus $140,000 a month in utilities.

Ernesto Fonseca, chief executive of Hacienda CDC, a nonprofit that provides affordable housing, said few would use a shelter so far from services.

"Anybody that knows a little bit about homelessness, they know it's about systems, community and a series of networks," he said. "If it's simply going to be a sleeping pad, for many of them, they won't be going there."

Before Thursday's vote, Commissioner Smith spoke out in favor of using the jail as a shelter.

"I don't consider Wapato an albatross or a white elephant," Smith said. "I consider it an opportunity facility; an opportunity for us to get folks who are homeless off our streets, and to make sure that they're not dying on our streets."

She said she was disappointed that the county hadn't pushed for a zoning change or exemption that would allow a shelter on the property.

In a Nov. 6 letter to the board, Portland architect Stuart Emmons urged commissioners to postpone Thursday's vote on the sale to allow more time to consider proposals to use Wapato as a shelter.

Smith is running for Dan Saltzman's seat on Portland City Council, and Emmons has said he's "seriously considering" his own challenge.

At Thursday's meeting, Commissioner Sharon Meieran said she, too, initially thought transforming Wapato into a shelter was a good idea. But as she learned more about the site's various challenges – lack of transportation, prohibitive zoning and high operating costs – she said she realized that it wouldn't make any sense.

Meieran said she was troubled that some seemed to be using Wapato to promote their own political agendas.

"I feel it's disingenuous to say Wapato would be a smart choice for the county to operate as a homeless shelter when you actually do have all the information," she said. "It creates some good talking points, it's easy to say, but it's simply not true."

This story has been updated to reflect that Deborah Kafoury disclosed her relationship with Trevor Kafoury before the county selected CBRE to market Wapato Jail. In addition, Trevor Kafoury is not the vice president of CBRE's Portland operations, but a vice president.



-- Anna Marum

amarum@oregonian.com

503-294-5911

@annamarum