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Port of Portland says terms will make the project too costly to proceed.

Culminating several years of meetings, consultants reports, blowups and other drama, Portland planning and sustainability commissioners briefed city councilors Thursday on their detailed recommendations for how to allow marine trade terminals on west Hayden Island while mitigating for the environmental and health damages that will bring.

Commissioners Amanda Fritz and Nick Fish raised a series of tough questions, suggesting the Port of Portland faces a close City Council vote on its request to have the city annex about 800 acres of its property into the city and rezone it for industrial development.

Mayor Charlie Hales and Commissioners Steve Novick and Dan Saltzman didn’t say much to tip their hands during Thursday’s work session about the west Hayden Island proposal, one of the biggest jobs vs. the environmental dilemmas facing the council.

But perhaps a bigger issue — the elephant in the room — was a letter issued three days earlier by Port Executive Director Bill Wyatt, saying the whole deal worked out by the Planning and Sustainability Commission after 11 work sessions was unworkable financially. Wyatt’s letter to Hales and the rest of the councilors proposed an “alternative” deal that would cut the port’s costs by $40 million. That would essentially eliminate much of the Planning and Sustainability Commission’s proposals for restoring the floodplain, forests and meadows caused by the port development, and setting aside a large sum to alleviate health concerns of mobile home residents who live next to the site.

“West Hayden Island is an amazing natural resource, and development absolutely will cause destruction,” said Susan Anderson, Planning and Sustainability Bureau director, introducing the proposal to the city commissioners. However, she added, the mitigation proposals suggested by the Planning and Sustainability Commission would make up for the damages and leave the island even better than before.

She noted that the planning commissioners approved the detailed recommendations unanimously, even though some oppose annexing the site into the city.

Fritz wanted to know why the planning commissioners voted to proceed with the project after the Washington Legislature left the fate of the new Columbia River Crossing bridge hanging. The bridge is located a few blocks from the port’s proposed marine terminals.

Fritz and Fish both questioned projections showing that diesel from trucks, cars and marine vessels would cause air toxins to rise far above state air quality standards.

Andre Baugh, chairman of the Planning and Sustainability Commission, noted that the air pollution levels projected by the development would make it on par with the air quality in the Pearl District.

“I don’t get that argument,” Fritz fired back.

“That doesn’t mean we should be imposing pollution on other communities,” added Planning and Sustainability Commissioner Gary Oxman, a retired doctor and Multnomah County health officer.

Planning and Sustainability Commissioner Mike Houck said there are concerns the project could lead to instability in the nearby mobile home park, a large source of

affordable housing. Some fear people will move out, leaving the state’s largest mobile home park pockmarked with vacancies and setting it on a downward spiral.

Wyatt, in his letter to city councilors, stressed that the project can only pencil out for the port if costs are kept to $8.50 a square foot. The Planning and Sustainability Commission conditions for the annexation would cost an estimated $12 a square foot.

“The result is a development proposal that is not financially feasible and would render the land undevelopable,” Wyatt wrote. He added that the Planning and Sustainability Commission proposal “goes well beyond legal requirements and in certain areas (such as floodplain, health impact, forest impacts) goes well beyond proportional impacts.”

Baugh said it’s customary for developers to protest that local government preconditions for their projects are too costly. That’s usually followed by negotiations between developers and local governments, he suggested.

However, Baugh noted, many people testified during the lengthy public process that they “don’t trust the port to do the right thing.”

But there are ways to cut costs on some of the city’s requirements, and some mentioned it’s possible the port can seek money from state economic development funds or other pots of money, such as the lottery-funded Oregon Connect program.

And the port is loaded with former political insiders who know their way around Salem and Washington D.C. Wyatt is a former chief of staff to Gov. John Kitzhaber, and his staff includes Tom Imeson, a former aide to Sen. Mark Hatfield and key lieutenant for multiple Oregon governors.

“There are some people that know where to look for money,” said Susie Lahsene, the port’s transportation and land use policy manager.

There is no date scheduled yet for bringing the matter to the City Council for a final vote, and Hales offered to hold another work session if needed.

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