Prominent attorney John DiLorenzo made good Monday on his threat to sue the city of Portland for planning to open a temporary homeless shelter on property owned by the sewer bureau.

DiLorenzo wants a Multnomah County judge to intervene. But Portland will fight and says DiLorenzo's claim is without merit.

At issue: whether Portland's plan will deprive the city's sewer bureau from getting fair value for its property.

The argument reignites DiLorenzo's still-pending lawsuit from 2011 alleging Portland has misspent money from water and sewer customers on projects unrelated to water and sewer services. DiLorenzo has already secured several victories in the case and forced the city to reverse course on other questionable projects.

Now, DiLorenzo wants Judge Stephen K. Bushong to decide whether Portland's latest effort is illegal.

Two weeks ago, the City Council voted 3-2 to force the Bureau of Environmental Services to lease its riverfront property to the Portland Housing Bureau for a temporary homeless shelter. The 14-acre site, known as Terminal 1, is at 2400 N.W. Front Ave.

Although no lease has been signed, the City Council directed the Housing Bureau to pay no less than $10,000 a month. But the sewer bureau is currently collecting $26,200 a month and a broker estimates the property is worth about $100,000 a month.

Portland last week also received offers from seven businesses who want to buy the land, with offers ranging from $6 million to $10 million.

DiLorenzo argues the City Council has precluded the sewer bureau from leasing the land at fair market value or selling it at full price.

The sewer bureau "will be deprived at least $10 million," he argued in Monday's filing, which will require the agency to take on more debt - either resulting in rate increases for customers or eliminating the potential to reduce sewer rates.

DiLorenzo wants to accelerate a ruling by adding the lease issue to his existing lawsuit.

But Tracy Reeve, Portland's top attorney, said the complaint should be filed as its own lawsuit and officials will fight DiLorenzo.

Reeve also said officials have set a floor of $10,000 a month but the sewer bureau will be fully compensated. The bureaus have until Oct. 7 to sign a final lease.

"It's premature because no final amount has been agreed to and executed," she said. "There aren't going to be ratepayer resources used to fund the shelter activities," she added.

-- Brad Schmidt

503-294-7628

@cityhallwatch