post office pearl district

The U.S. Postal Service office in Northwest Portland is shown in this 2008 file photo.

(Stephanie Yao Long/The Oregonian/file)

The U.S. Postal Service may be closer than ever to filing a change-of-address form for its central post office in the Pearl District, freeing 14 acres for redevelopment in one of Portland's toniest neighborhoods.

The Portland Development Commission next week will consider entering exclusive negotiations to acquire the site at 715 N.W. Hoyt St., The Oregonian/OregonLive has learned, and it will put down $500,000 to show it's serious.

Similar exclusive negotiations fell apart about a year ago, and the PDC forfeited to the Postal Service the $500,000 it had put down for the right to exclusive negotiations. But this time, PDC officials say, the Postal Service will use the money to start planning for a new mail-sorting facility.

"The level of enthusiasm with the Postal Service gives us a lot of confidence we're on a positive path and something will come of this," PDC Executive Director Patrick Quinton said Wednesday.

But the Postal Service isn't a motivated seller, and it has asked for the city to cover the costs of building a new facility as a condition of a move.

Postal service spokesman Peter Hass declined to confirm the ongoing negotiations or say whether a potential replacement site has been identified.

"The Postal Service has met with the Portland Development Commission ... and various options for the facility at 715 N.W. Hoyt St. have been discussed," Hass said. "We have no information about those options to share with the public at this time."

The Postal Service's move from the Pearl District is nearly three decades in the making -- agonizingly slow for city officials who have watched the district grow up around what has been an untouchable corner.

City officials and developers have variously eyed the site for a baseball park, a massive corporate campus or affordable and market-rate housing. It's an opportunity for blank-slate development on a large scale -- and on a portion of the central city that would be under the city's control.

Moving the Postal Service, however, could be an expensive venture.

In the last round of talks, the PDC was to pay one and a half times the appraised value of the Postal Service property. A 2007 appraisal paid for by the PDC pegged its value at $45.5 million, so the PDC would have paid more than $68 million.

This time, if a deal moves forward, the PDC is looking to pay the costs of moving the postal service in exchange for the land. That price tag could end up higher or lower than the one previously imagined.

The agency plans to set aside nearly $35 million in its budget over the next three years, but Quinton said that's a placeholder and likely less than the amount it will eventually need.

Pollution clean-up needed before the site is developed could also add costs down the line.

The $500,000 the PDC would put down to open negotiations would come from a $1.5 million escrow account it had already opened with the Postal Service, so it wouldn't have an immediate budget impact. Future funding would come from the River District urban renewal area.

The PDC offered another clue it's feeling more confident about the proposed new round of negotiations. It's planning to set aside another $500,000 for planning on the post office site and the surrounding area.

Nearby are several vacant blocks controlled by the city, as well as Union Station and the Broadway Bridge, a link from downtown to the Rose Quarter.

Given the location and the size of the blank slate it would offer for development, Quinton said it's one of the sites he's most frequently asked about.

"If we acquire it, it automatically becomes one of the highest-profile urban sites in the country," he said.

Even if a deal moves ahead, the timeline is uncertain. If dictated only by the PDC's process, Quinton said, the property could be ready for development in about two years. But the Postal Service needs to find and build on a new site, which could take longer.

-- Elliot Njus

enjus@oregonian.com

503-294-5034

@enjus