Two Portland development companies set on renovating Old Town Chinatown's Grove Hotel are suing the owners of property across the street to evict the homeless tent camp set up there.

Filed by developers of the Grove Hotel, a high-profile project designed to help revitalize the neighborhood, the suit argues the camp violates Portland's zoning code, defies Oregon's permitting rules for setting up a park or camp and impedes redevelopment of the Northwest Portland neighborhood.

Bob Naito is lead owner of Grove Hotel Partners, which is developing the nine-story hotel, along with Grove Hostel Properties, a group that includes developer David Gold and others. They are working to remake the historic hotel, which stretches for a full block from Fourth Avenue to Fifth Avenue on West Burnside Street in Old Town, into a high-end tourist destination with restaurants and other retail offerings on the ground floor.

They argue the camp, known as Right 2 Dream Too and located at Northwest Fourth Avenue and Burnside Street, interfered with the renovation of the hotel by reducing the neighborhood property values and lowering the value of their proposed project by $900,000.

Portland city officials have long struggled to find another location for the camp, even after directing $846,000 toward to project. The tent camp, governed by its occupants, has operated on the site with the permission of its owners for more than five years.

Portland City Council voted in February 2016 to move the controversial camp to the Central Eastside, but a ruling by the Oregon's land-use board blocked the move. The ruling found that city officials abused local zoning rules by trying to classify a residential camp as a nonprofit so they could move it to an area zoned for industrial use.

In 2013, Commissioner Amanda Fritz and former Mayor Charlie Hales worked to find a new home for the camp in the Pearl District, but neighbors and local business owners fought the plan until Hales looked elsewhere.

City officials created a list of 21 potential new sites. None worked out so the city turned to the Central Eastside location.

The Oregon land-use's ruling left the camp with an uncertain future, which could soon be determined by the Multnomah Circuit Court.

--Jessica Floum

jfloum@oregonian.com

503-221-8306

@cityhallwatch

-- Jim Ryan

jryan@oregonian.com

503-221-8005; @Jimryan015