Utility board wants council to delay Terminal 1 homeless shelter proposal

The Portland Utility Board is encouraging the City Council to postpone any decision on turning Terminal 1 into a homeless shelter until the fair market value of the property is established through the surplus sale process that is currently underway.

The board was established to advise the council on issues related to water and sewer rates. Terminal 1 is owned by the Bureau of Environmental Services, which operates the citys sewer system and stormwater management programs. The 12-member board wrote the council on Aug. 8, two days before it is scheduled to consider a proposal by Commissioner Dan Saltzman to open a homeless shelter in a 96,000-square-foot warehouse on the property, which is zoned for industrial uses.

BES no longer needs Terminal 1 North to service its customers, and has followed proper disposal processes according to the citys surplus property policy. Any proceeds from the immediate sale would be returned to the BES Construction Fund, to comply with bond requirements and best practices. These added construction fund resources will allow BES to delay or decrease future bond sales for construction projects and address much needed investment in aging infrastructure, helping to delay or slightly reduce rate increases, the letter says.

Under the surplus sals process, BES is scheduled to receive bids for Terminal 1 through Aug. 15, just five days after Wednesdays hearing on Salesmans proposal. The Portland Utility Board letter says the council should take no action on the proposal before then.

The PUB therefore encourages the City Council delay any action regarding Commissioner Saltzmans proposal to allow the fair market value of the property to be determined by the sale process," according to the board's letter. "This will set a baseline for future negotiations while respecting the disposition process and prior commitments to BES customers. Failing to meet these prior commitments is detrimental to improving trust between city bureaus and the citizens of Portland. Disrupting the process at this late junction erodes the trust of the business community with regard to the disposition of property by the utilities; it could impact the value of city property by increasing perceived risks and transaction costs.

Potential for jobs?

Saltzman is proposing that BES lease Terminal 1 to the Portland Housing Bureau, which he oversees, for $10,000 a month. In its letter, the PUB says that amount is well below market rates for such properties, although its actual value needs to be set through the surplus sale process.

Commissioner Nick Fish, who oversees BES, opposes Saltzmans proposal. He says it should be sold to a private employer who will create high-wage industrial jobs, a position the board supports.

As a large piece of industrial land on the river, Terminal 1 North holds the potential for job creation, economic growth, and increasing the tax base. Taking the site out of industrial use, even temporarily, means the potential loss of this alternative, according to the board's letter.

If the council approves the proposal, the PUB recommends a series of steps to reduce BESs potential liability on the property. It also believes a cost-benefit analysis should be done comparing Terminal 1 to other options for homeless shelters.

You can read the PUB letter here.

Industrial sanctuary

Saltzmans proposal is also opposed by the Northwest Industrial Neighborhood Association, the official city neighborhood association representing the area that includes Terminal 1. It also sent a letter to the council arguing against using the warehouse for a homeless shelter on Aug. 8.

Among other things, the letter notes Terminal 1 is located in the Guilds Lake Industrial Sanctuary, which the council established to maintain industrial land and jobs.

The Guilds Lake Industrial Sanctuary is meant to be just that  protected lands zoned for industrial use. Changing this will have adverse impacts on our business owners, our employees, Portlands economy as a whole and the future of industry in our city, according to the letter.

You can read the NINA letter here.

You can read an earlier Portland Tribune story on the issue at www.pamplinmedia.com/pt/9-news/317870-197367-city-needs-to-work-with-deq-on-terminal-1-homeless-shelter.