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Fish mulls new land sale guidelines as legal action looms

by: TRIBUNE PHOTO: JONATHAN HOUSE - This is the decommissioned Freeman Water Tank, part of a property the Portland Water Bureau intends to sell for infill development to Renaissance Homes.Two men have been spending a lot of time lately thinking about a decommissioned water tank: Nick Fish, the city commissioner in charge of the Portland Water Bureau, which is selling the property where it’s located to a private developer; and Jeremy Solomon, a neighbor of the property who has made it his mission to stop the sale.

During the Nov. 13 City Council meeting, Solomon raised new arguments about the property sale.

Neither man seems to have any intention of backing down. But the dispute could lead to new guidelines on how the city deals with the sale of surplus property, giving more notice to neighbors and neighborhood organizations, Fish says.

“We’ve certainly learned some lessons from this,” he says.

The Freeman Tank property, near Southwest 42nd Avenue and Freeman Street in Southwest Portland’s Multnomah Village neighborhood, was earmarked for sale in June 2010, when the City Council declared it and seven other Water Bureau properties surplus and told the bureau “to dispose of (them) through sale for the best price, terms and conditions available.”

In March 2012, the bureau listed the property on Craigslist for $187,000. Six months later, Renaissance Custom Homes, a Lake Oswego homebuilder, put $1,000 down on the property and eventually purchased the land for $140,000. The company plans to build three new homes on the site.

Solomon and his neighbors formed the Woods Park Advocates to oppose the sale. They claim the Water Bureau didn’t offer enough public notice before putting the Freeman Tank property on the market, and that the bureau is jumping at what seems to be a lowball deal.

Solomon told the City Council last week that he believed the city failed to follow Oregon law, which requires cities selling property to “publish a notice of the proposed sale in a newspaper of general circulation in the city, and shall hold a public hearing concerning the sale prior to the sale.”

A notice about the proposed property sale was published in Portland’s Daily Journal of Commerce in June 2010. Solomon deferred comment on that notification to another member of the opposition group.

Neighbors say responses inadequate

Solomon and his neighbors say the city efforts to inform the public about the land sale are lacking. In mid-October, Woods Park Advocates member Michele Zwartjes filed a public records request for “all documents related to the appraisal, marketing and sale” of the property in mid-October, and the advocates say they’re dissatisfied with what they were given. On Nov. 4, Water Bureau Public Information Manager Tim Hall fulfilled the request — but not completely, they say.

“We asked for information related to 15 items, and we got partial responses to four of the 15 items. We got no response to 11,” Solomon says. “The partial responses that we got told us that there was a lot of other information they were not giving us, and ... whether they did that intentionally or not, I don’t know.”

The Woods Park Advocates have appealed to the Water Bureau, requesting details on how the Freeman Tank asking price was set and why the sale price ended up being lower than that.

In his response to Zwartjes, Hall wrote, “The land was valued at $124,000 and the tank was valued at $288,000, for a total value, including improvements, of $412,000.”

In an Oct. 14 letter to Solomon, Fish noted that in July 2008 PGP Valuation Inc. appraised the property at $240,000. Because of a decline in property values during the recession, Fish wrote that “the city applied a conservation depreciation schedule of 6 percent a year from 2008 to 2012,” which “led, in turn, to an adjusted selling price of $187,000.”

But the Woods Park Advocates say the valuations were cut-rate and took it upon themselves to conduct their own analysis.

Although Hall wrote that there were no property comparisons in the area because the land included a water storage tank and not a house, “We did an analysis of properties sold within six blocks of Freeman (and) within six months of September 2012 (the month of the sale agreement for $140,000),” Solomon says. “Our lowest estimate was $392,000.”

Sonia Schmanski, Fish’s policy director, says the sale price was $47,000 lower than the $187,000 advertised because “the decommissioned water tank is a liability, not an asset.” Solomon says the sale price was an example of the bureau’s failure to properly advertise the site.

“If I’m selling you my car, and my car now has a really ugly paint job on it, and ... you’re the only buyer, I’m agreeing to whatever crazy request you make,” Solomon says.

New guidelines in the future

City Commissioner Amanda Fritz, who is in charge of Portland’s Bureau of Parks & Recreation, told members of the Woods Park Advocates that if they were to stop the sale and a way can be found to remove the tank at no expense to the city, the Parks Bureau would be happy to adopt the property.

More than two years ago, Fritz told the council when the property was declared surplus that she wanted the city’s Office of Neighborhood Involvement to be involved in the future to “get the word out to neighborhoods, as well as the bureaus, to see if anybody wants to buy the properties.”

Fish, who wasn’t in charge of the Water Bureau at the time the sale process began, says while the level of public notice was legally sufficient, the experience has inspired him to work on changing the Water Bureau’s practice in the future.

“Reasonable people can disagree about some of the things in dispute, but what I do agree with is that the public notification process that was in effect as of 2008 was inadequate,” Fish says. “The Water Bureau is in the process of developing a new set of guidelines, which will require and mandate the sale of any property declared surplus ... notification to the community, posting at site, and other safeguards, discussing with neighbors.”

During his Nov. 13 presentation, Solomon gave the council a letter signed by leaders of the Ashcreek, Crestwood and Multnomah neighborhood associations and Friends of Woods Park requesting that “the City Council rescind the real estate sales agreement of the Freeman Tank Property,” and, “After rescinding the sales agreement ... that the city consult us to determine the appropriate uses of this strategically situated property for purposes consistent with its high value, including but not limited to habitat, open space, neighborhood connectivity, and public safety.”

Legal action ahead?

For his part, Fish plans to go forward with the sale, which is scheduled to close by Jan. 31.

“When I was assigned the Portland Water Bureau in June, I inherited a legally binding contract for sale. Breaching that contract would put ratepayer dollars at risk,” Fish says.

The Woods Park Advocates plan to do everything it can to stop the sale. The group has formed an ad hoc subcommittee of the Multnomah Neighborhood Association (one of 17 neighborhood associations comprising the nonprofit Southwest Neighborhoods Inc.) and hopes to receive tax-deductible donations through SWNI “to seek legal council in determining the options available to this committee to influence the city regarding the disposition of this strategic greenspace.”

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