A divided Portland City Council approved a controversial plan Wednesday to secure land for a 400-bed temporary homeless shelter that could open as soon as October -- provided it survives legal scrutiny.

The 3-2 vote prompted an immediate warning from a high-profile attorney who promised to sue in as soon as 10 days, arguing officials have agreed to inappropriately subsidize the massive shelter on the backs of Portlanders who pay sewer bills.

The uncharacteristically contentious decision marks the City Council's most aggressive move to help homeless Portlanders since declaring a housing emergency last fall. The Northwest Portland riverfront shelter would instantly become the city's largest and increase capacity across Multnomah County by nearly 40 percent.

But the moment was anything but a feel-good photo opportunity, with dozens of neighbors, business leaders, environmentalists and even a minority of the City Council taking sharp stabs at the unvetted concept proposed two months ago by marquee developer Homer Williams.

City leaders spent about three hours Wednesday mostly hearing from opponents who blasted the proposal as inhumane to the homeless, unfair to nearby residents, irresponsible because of the city's lack of due diligence and misguided for tying up valuable industrial property.

"Yeah, there's a lot of anxiety and some division now because we are moving quickly, because we are trying things and because we are spending real money," said Mayor Charlie Hales, who joined Commissioners Dan Saltzman and Steve Novick in voting yes. Commissioners Nick Fish and Amanda Fritz voted no.

"We need to take good faith from each other, so when you hear us say we're doing something as an experiment -- if it doesn't work, we'll stop -- I hope you'll count on those words being true because I mean them," added Hales, who leaves office at year's end.

Portlanders who live in apartments and condos along the Willamette River turned out en masse to criticize the shelter concept. One woman even had her 31/2 year old daughter register an official objection.

"High concentrations of mentally unstable and houseless citizens is not a proven formula," said Kimberly Eng, who lives one block from the proposed shelter, at 2400 N.W. Front Ave.

But a small minority praised city and business leaders for trying something, even if support was provisional. Nearly 1,900 people sleep on the streets each night, according to the most recent tally.

"I think it's easy to get to no. I think it's really hard to get to yes on something like this," said Rich Rodgers, a former City Hall political aide who handled housing issues. "I commend the private sector folks for stepping up."

But the most worrisome words didn't come from anyone who testified. They came instead from attorney John DiLorenzo, who has successfully sued Portland for misspending water and sewer money on projects not reasonably related to utility services.

DiLorenzo took issue with the City Council's decision to lease the building, owned by the city's sewer bureau, to the city's housing division for no less than $10,000 per month. The property has a market value that's 10 times higher, according to city estimates compiled by a broker.

After the vote, DiLorenzo told The Oregonian/OregonLive he will give Portland 10 days to rescind its vote or agree to pay full price. Otherwise, he'll sue.

"This action shows that certain members of the City Council have learned nothing" from a Multnomah County judge's 2014 ruling as part of an ongoing lawsuit, DiLorenzo said. "I'm disappointed by that. And I want to make sure this lawsuit isn't out of sight and out of mind."

Hales, in defending the lease decision during Wednesday's meeting, said the sewer bureau won't be spending any money on the project. But Hales said that doesn't mean the sewer bureau "is entitled to the maximum possible rate of return" from the housing bureau, which receives its money from the Portland's discretionary general fund.

"We're going to stay clean on that issue and not spend ratepayer money on housing and homelessness," Hales said.

Developer Homer Williams secured City Council support on Aug. 10, 2016, to lock up land for a 400-bed temporary homeless shelter.

Williams and the city's housing director, Kurt Creager, spent little time Wednesday offering details about the temporary shelter concept. But, if successful over the next six to 18 months, Williams hopes to build a $60 million to $100 million permanent homeless campus on the city-owned site.

Williams has promised to raise private money to pay for the temporary shelter and plans to work with Union Gospel Mission and Ibrahim Mubarak, co-founder of two Portland homeless camps, to operate it. Williams has downplayed improvement costs while Union Gospel's executive director said operational expenses could run up to $1.4 million a year.

Saltzman, who acknowledged that housing officials haven't yet conducted due diligence on Williams' temporary shelter proposal, opened the hearing by saying the city would not commit any general fund money beyond the cost of leasing land.

But Saltzman later persuaded the City Council not to put that pledge in writing, as Fritz wanted. He said Williams' proposal represents a "big vision" and Saltzman didn't want to unnecessarily "lock us in and tie our hands."

Fish offered the most devastating critique of the proposal, calling it "ill-conceived" and "half-baked" and suggesting only Williams, a well-connected developer, could waltz into City Hall and secure land without providing specifics.

"Here's what I learned about the plan," Fish said, pausing in silence for five seconds.

"Here's what I learned about the funding, both public and private" he said, again allowing quietness to linger.

"Here's what I learned about the city's role in the short term and the long term," he continued. "Here's what I learned about benchmarks for success and how we can judge this experiment."

"As you can see," he finally summarized, "I didn't learn much because very little was shared with us."

Saltzman conceded much work remains, including a formal agreement with Williams' non-profit, Oregon Trail of Hope, for use of the warehouse.

"It will be done in the full light of day, and the public will have the chance to see each step," said Saltzman, adding that the new shelter capacity "will get us through the winter."

After the vote, outside the City Council's chambers, Williams acknowledged the decision was difficult for city leaders.

"But if we do the right job," he said, "we'll win 'em all over."

-- Brad Schmidt

503-294-7628

@cityhallwatch