City sells Terminal 1 for $11.125 million
After more than three years of trying, Commissioner Nick Fish finalized the sale of Terminal 1 to Lithia Motors for $11.125 million on Monday.
"This sale is a win-win-win: preserving scarce industrial land, generating good family-wage jobs, and delivering a solid return for ratepayers. With the property in Lithia's hands, I'm confident that T1 will continue to be an asset on our working waterfront," says Fish, who oversees the Bureau of Environmental Services (BES), which sold the site along the Willamette River in Northwest Portland. "
Mayor Ted Wheeler agrees, saying, "Lithia Motors is an important economic player in Oregon. I know that they will leverage this property to its fullest potential to create good jobs in our city."
Lithia Motors, a Southern Oregon-based Fortune 500 comany, will use the 14.5-acre property at 2400 N.W. Front Ave. to consolidate its Portland operations.
"The development of Terminal 1 allows our company to plan for the future, control current operations and meets the needs of our customers in a fully consolidated facility," says Mark DeBoer, the company's vice president of corporate development.
The price was more than the $10 million the company originally bid on it, but less than a revised offer of $12.5 million because of structural problems discovered during the due diligence process.
The sales process was suspended in 2016 when the City Council voted to consider allowing a privately financed homeless service center to be built on the property. The process was restarted after that project fell through a few months later.
BES Director Mike Jordan signed the deed on Aug. 28, officially transferring the property to Lithia Motors and capping the final chapter in the $1.4 billion Big Pipe project, the city's largest infrastructure project to date.
BES bought T1 for $6.3 million in 2004 from the Port of Portland. It was used as a staging area for the project, which constructed two large pipes on either side of the Willamette River and installed rain gardens and other green solutions that have eliminated most combined sewer overflows to the Willamette River and Columbia Slough.
The property includes a large paved lot with a 96,000-square-foot warehouse in addition to a 3.6-acre dock. It is identified in the city's Comprehensive Plan as prime industrial land, and is a key part of Portland's jobs forecast and economic development strategy for the next 20 years.
"We're equally excited at the possibilities for use of the surplus property at Terminal 1 and hope to best address the vision and future clean transportation needs of the greater Portland community by aligning with the City of Portland Comprehensive Plan," DeBoer says. He explains the company is uniquely positioned to partner with Portland to further explore, develop and adopt innovative urban transportation solutions while creating living-wage jobs to a diverse resident population in accordance with the city's equity and prosperity goals.
Lithia Motors is one of the largest automotive retailers in the nation and has strong relationships with virtually every automotive manufacturer. The company employs a team of more than 13,000 in 18 states. About 2,200 of those workers are based in Oregon.
When the council originally authortized the sale of Terminal 1 in 2014, it was assessed at $8.6 million. In 2016, BES received seven bids ranging from $6 million to $10.5 million before the council canceled the sale process. After it was restarted, BES received seven bids ranging from $10 million to $10.5 million. When BES asked those bidders for their best and final offers, Lithia raised its offer $2 million to $12.5 million, making it the high bidder. The offer was accepted in December.
The final sales price of $11.125 million was based on further information discovered during the inspection phase, also known as due diligence. During the inspections, a sinkhole in the main lot and damage to the dock were discovered. To address these findings, the city and Lithia negotiated a price adjustment as well as an additional $625,000 BES had to put in escrow. Lithia can draw upon those escrow funds for repairs, subject to BES approval. All offers received would have been subject to the due diligence process.
For more information on T1 including photos, see www.portlandoregon.gov/bes/article/514449.