County votes to accept cut-rate Wapato offer
The Multnomah County Commission voted to sell the never-used Wapato jail to developer Marty Kehoe for $5 million on Thursday. Only Commissioner Loretta Smith, who argued that it should be used for the homeless, voted no.
The commission had previously voted to sell Wapato to Kehoe for $10.8 million last November. At the time, his offer was highest of any received by the CBRE Portland real estate services firm retained by the county to sell its surprlus property. It was $2.3 million more than Wapato's appraised value of $8.5 million.
County Chair Deborah Kafoury, who has been trying to sell Wapato for years, said that deciding to build the jail in 1996 was a mistake.
"We didn't have the money to operate Wapato then and we don't have it now," said Kafoury.
The commission set the closing date for the sale at 5 p.m. on April 20 and voted to keep $200,000 Kehoe has deposited in an escrow account if he does not buy it.
The majority of the commission did not seriously consider a $7 million offer from the Oregon Harbor of Hope to use it as a homeless shelter. Homer Williams, a developer who founded the organization, testified that it would be operated with private funds. Only Commissioner Loretta Smith, who voted against the sale to Kehoe, argued for giving Williams' organization an opportunity to study the feasibility of the proposal, however.
"Wapato isn't a solution to homeless, but it would reduce some of the pressure that's forcing us to make crisis decisions now," said Smith.
After the commission first approved the sale to Kehoe, he was granted two extensions to determine the financial viability of reportedly using it for a medical equipment distribution center. On March 23, Kehoe withdrew his $10.8 million offer, but said he would instead be willing to pay $5 million for the property.
"My colleagues seemed to set the dangerous precedent that any bidder at any time can successfully be awarded a winning bid based not on their original proposal, but rather on a secondary offer presented at the eleventh hour. I have real concern that this body may have just voted to give the purchaser of Wapato a sole source contract, which I fear could be in breech of state procurement laws," Smith said after the vote.
The majority also refused to consider Smith's request that the other bids to CBRE be reconsidered, too. Some were reportedly equal to or higher than Kehoe's new $5 million offer.
Architect Stuart Emmons questioned whether Kehoe had planned to reduce his offer from the start.
"I told Martin Kehoe that the economics he proposed for Wapato didn't work last fall, as many others did. It is certainly plausible, that this was his plan all along, to come in with an inflated number, tie up the property for months, get rid of other competitors, while people froze on our streets, and then change his offer to less than half of the original offer five months later," said Emmons, who supports using Wapato for the homleess and is running for the City Council.
During the hearing, Smith said she has been arguing that Wapato should be used for the homeless since 2014. Others supporting that idea have included the Portland Police Association, the Portland Business Alliance, some Old Town business owners, and some Southeast Portland residents oppposed to the councty's plan to open a homeless shelter in an empty grocvery store at Southeast Foster Road near 60th Avenue.
Kafoury and a majority of the commission have consistently opposed the idea, however, argue Wapato is too far away from existing homeless services, not well served by transit, and not properly zoned for such a use.
Wapato was built as a 525-bed medium security jail and substance abuse treatment center on 18 acres of property in the Rivergate Industrial Park in North Portland. It has long been a financial weight around the county's neck.
Voters approved a bond to fund the jail's construction in 1996. But county officials say that years later, the statewide passage of caps on property taxes meant that the county never had the funds to operate it.
Completed in 2004, it cost $58 million to build, and the county says it costs about $300,000 yearly to maintain.
An analysis by the Portland Tribune last year showed the total cost to date is more than $90 million, including interest and maintenance payments, and could exceed $105 million by the time all the bonds are finally paid off in 2030.
On Monday Williams and civic leaders announced plans to open a homeless navigation center and shelter in the Pearl District with a $1.5 million donation from Columbia Sportwear executive Tim Boyle.