Seven development companies offered between $6 million and $10 million to buy property owned by the city of Portland now designated for a massive temporary homeless shelter.

Those offers may further complicate the City Council's plan to convert a city-owned warehouse into a shelter for up to 400 homeless residents.

Portland's sewer bureau had been actively trying to sell its 14-acre property and Monday marked the deadline for companies to submit offers. But the City Council abruptly reversed course last week, voting 3-2 to force the sewer bureau to lease its Northwest Portland property to the housing division for at least $10,000 a month.

The new purchase offers - released Wednesday in response to a public records request - add a new wrinkle to the ongoing dispute about how much the Pearl District property is worth, and whether the City Council agreed to inappropriately subsidize the homeless shelter by leasing property at a cut-rate price. A high-profile attorney plans to sue Portland next week.

Portland Commissioner Nick Fish, who oversees the sewer bureau, said several companies decided not to submit bids after the City Council's decision to greenlight a homeless shelter on the Terminal 1 property.

"The discussion about placing a mass shelter at Terminal 1 compromised the sale process and I would say it even poisoned the well," said Fish, who voted against the lease. "Equally important, I think we've damaged our credibility with a lot of people."

City officials don't know how much the shelter will cost or who will pay for it. But they've bought into the vision pitched by influential developer Homer Williams, who has vowed to come up with private money to operate the facility.

Williams didn't submit an offer to buy the waterfront property, at 2400 N.W. Front Ave.

But among those who did, two developers -- Texas-based Lincoln Property Company Commercial and Portland's Jim Winkler -- each offered $10 million. Winkler wants to rezone the industrial property to residential so he can build affordable and workforce housing on the site.

Portland developer Marty Kehoe offered $9 million while three other businesses - Portland's Cody Development Corp., Hawaii-based Watumull Properties Corp. and Washington-based Conax Properties USA -- each offered between $8 million and $8.25 million.

Costco, which wants to covert the warehouse into a new store, put in the lowest bid: $6 million.

"Based on what the council did last week, this process has effectively been put on hold," Fish said.

Kehoe said Wednesday he's not frustrated with the City Council's changing priorities. Kehoe said he expects officials will conduct due diligence on Williams' proposal before doing what's best for the city and ratepayers.

"I am ready and willing to make the deal if they want to sell it," added Kehoe, who hoped to buy the property for industrial use.

Portland's sewer bureau bought the property in 2004 for about $6.33 million. Today, it has a market value of $8.6 million, according to Multnomah County property records, and officials hoped to secure offers ranging from $8 million to $12 million.

Portland's real estate broker told city officials last week that the property's lease value is about $100,000 a month - ten times more than what Commissioner Dan Saltzman, who oversees city housing, wants to pay.

Now that the city has solid purchase offers, will that change the equation?

That may be up to a judge to decide.

Attorney John DiLorenzo, who previously sued Portland over improper utility spending, has vowed to challenge the city's proposed lease terms.

DiLorenzo thinks Portland should either sell the property and return profits to the sewer bureau to curb rate hikes, or lease it at fair market value. DiLorenzo now has real offers to use as evidence when making his case.

City officials have until Oct. 7 to negotiate lease terms and haven't indicated they'll bow to DiLorenzo's legal threat.

"It may be," Fish said, "that a court opines on this."

-- Brad Schmidt

bschmidt@oregonian.com

503-294-7628

@cityhallwatch