Portland Building closed

A new city analysis pegs costs to fix structural deficiencies and water damage at The Portland Building at $95 million.

(Andrew Theen/The Oregonian)

The Portland Building – the city’s administrative headquarters beloved and despised for its post-modern design – needs a $95 million overhaul after officials spent decades ignoring major structural problems.

That’s the conclusion of a new analysis from the city’s Office of Management & Finance, which estimates that selling the building, tearing it down or building a new structure would cost even more: $110 million to $400 million.

The new projections are just the latest trouble for the home of the iconic Portlandia statue, a building completed 32 years ago for $25 million and plagued by defects ever since. Rather than addressing seismic concerns years ago, as promised, city leaders backtracked after consultants disagreed about the severity of problems.

Now, the bill to the Portland City Council and taxpayers may finally come due.

"I don't think this is anything that is going to catch council as a surprise, other than the magnitude of the issue," said Bryant Enge, director of Portland's internal business services division, which manages city facilities. "I think this has been something that we at facilities have been looking at for a very long time."

"Good money after bad"?

Enge’s comments Thursday came after The Oregonian filed a public records request for reports documenting deficiencies and options for The Portland Building, built between 1980 and 1982 next to City Hall at the corner of Southwest Fifth Avenue and Madison Street.

A city spokeswoman declined to immediately release the documentation, saying such reports are internal advisory communications.

At least four of five City Council offices have been briefed about options, Enge said.

“We’ve provided preliminary information of what it would cost,” he said. “In terms of how to proceed, we have not made a recommendation.”

But The Oregonian has learned that Enge’s division has in fact recommended overhauling The Portland Building instead of tearing it down and building anew.

Doing so would preserve the structure, which was designed by architect Michael Graves and joined the National Register of Historic Places in 2011.

Despite its fans, city employees have long complained about sloping floors, small windows and lack of natural light.

City officials have argued that renovations could begin as soon as summer 2014 and finish two years later. But that would require finding a temporary home for some 1,300 employees who work in the 364,000-square-foot building.

The complexity of the move would be similar to what was required during a $139 million overhaul of the nearby Edith Green-Wendell Wyatt Federal Building, which reopened last year.

City officials contend that The Portland Building needs nearly as much work.

Extensive water intrusion has been a problem since construction, officials now argue. Enge said water has leaked in from just about every surface – the roof, windows, siding, grout.

“We’ve tried to patch it as we’ve gone along, but not to a lot of success,” he said.

“What’s that terminology, good money after bad?” he added, saying officials are trying to answer,“Is there a solution to make sure we don’t have future problems?”

Longstanding seismic concerns

In addition to the water problems, recent briefings provided to elected officials and their staffs have warned that The Portland Building is expected to perform poorly in an earthquake because of structural deficiencies.

Structural problems at The Portland Building were first discovered during construction, when a city engineer stopped by the building on his lunch break in 1981 and found that reinforcing steel wasn’t integrated into key points of the building’s fifth floor. That problem was fixed, but the incident was hidden from the public until 1997, when The Oregonian reported the shortcoming . The newspaper story came as city officials wrestled with a leaky roof and sagging of the 14th and 15th floors.

Then-Mayor Vera Katz suggested that perhaps the city should simply “take it down and put ‘Portlandia’ on the river.”

A consultant at the time concluded that The Portland Building didn’t meet seismic codes when it was built between 1980 and 1982.

The cost to make fixes: $9 million.

“Because we will own and use this building for many more years and because we must hold ourselves to a high standard with the public, we should make the investment over the next several years to strengthen The Portland Building,” then-city Commissioner Jim Francesconi told employees in a 1997 letter.

But the improvements never happened.

Francesconi, who is now running for chair of the Multnomah County Board of Commissioners, said experts eventually determined the building was safe and improvements weren’t necessary.

“We brought in a group of people and deferred to the experts,” he said Thursday.

Payment plans

Today, city officials put the cost of addressing all the building’s problems at $95 million.

Enge said Thursday that about half of the money would go toward seismic improvements and half would cover a complete restoration of the building’s exterior.

Officials have warned that a moderate earthquake would result in medium to large levels of structural damage and substantial costs, while a major earthquake could leave the building unusable.

“We talked about the $95 million in terms of what it would take to fix this building,” Enge said.

City officials have suggested that the project could be funded through 20-year revenue bonds. Annual debt payments would be about $8 million a year.

Officials could tap city bureaus that occupy the building to pay back the debt, with more than 40 percent coming from the city’s ratepayer bureaus, water and environmental services. About $2.3 million could come from the city’s general fund and $1.5 million from the transportation bureau.

Mayor Charlie Hales met with his chief of staff and the city's chief administrative officer Thursday to discuss options.

“The mayor said lots of questions remain to be answered before he’ll sign off on the proposal,” Dana Haynes, spokesman for Hales, said in an email. “He wants to see alternatives.”

-- Brad Schmidt