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Art DeMuro is tired of people asking him what’s going on with Portland’s vacant U.S. Custom House, especially because he was passed over to redevelop it nearly two years ago.
DeMuro’s Venerable Properties is Portland’s premier renovator of historic buildings, but the company lost out in a bid to rehab the 100,000-square-foot building back in 2005.
DeMuro was one of two finalists picked by the U.S. General Services Administration, the government agency that owns the Custom House at 220 N.W. Eighth Ave., after the GSA issued a request for proposals to redevelop the property.
Instead, the GSA picked The Pochter Group of Chicago to breathe new life into the 106-year-old property that was the first federal building in Portland. The GSA and the Pochter Group began negotiating an 80-year lease agreement, under which the company would turn the building into an 82-room boutique hotel operated by Dallas-based Wyndham Hotels & Resorts.
The Pochter Group has never developed a property in Portland.
Two years later, the building is still vacant, the lease remains unsigned, and The Pochter Group’s owner, Keith Pochter, is keeping a tight lip about why nothing’s happened.
“The situation we have is the same situation we have had for some time,” Pochter said. “We’re still operating under a confidentiality agreement with the GSA, and it’s up to them to decide what commentary they want to make in regards to our negotiations.”
Although Pochter said “nothing’s changed with our plan,” the GSA’s Web site shows Pochter working with a different hotelier than he had lined up in 2005.
Plans for the Custom House have been stalled because Wyndham backed out of the hotel deal, according to Bill Lesh, a spokesman at the GSA’s Auburn, Wash., office.
According to the GSA’s Web site, Pochter is now partnered with Marcus Hotels & Resorts of Milwaukee.
“They had to look for new hotel partners,” Lesh said. “They had one that fell through, and when that happens, GSA has to start at square one to do due diligence.”
A new lease between GSA and Pochter should be signed within the next 60 to 90 days, Lesh said.
Pochter made news last year for his involvement with a Wilmette, Ill., development in which he and other partners broke ground on a site without gaining proper remediation permits. The site, which was contaminated with three fuel tanks, eventually was cleaned up after Pochter hired removal contractor R.W. Collins of Chicago.
“He was fine (to work with),” Dan Teague, a principal at R.W. Collins, said. “It was a small project, so I only talked to him about the job on-site. He seemed pleasant enough and to the point.”
The situation doesn’t sit well with DeMuro.
“I would like someone from GSA to explain why there is a very significant historic resource that has now been vacant for two-plus years,” he said. “It’s shocking. We were in competition and had a specific proposal and concrete time frame. The primary tenants we had lined up ended up relocating to other Old Town spots.”
Venerable had planned to house its own office, along with 30,000 square feet of classroom space for the University of Oregon, in the Custom House. The university is now slated to take up 100,000 square feet at the White Stag building, which Venerable is rehabbing in Old Town/Chinatown.
Venerable also had a commitment from a restaurant for the portion of the building facing the courtyard, along with the now-defunct Zimmerman Community Center, and the Contemporary Crafts Museum, which instead will open July 22 at 724 N.W. Davis St. as the Museum of Contemporary Craft.
“As a preservationist, you’re always concerned that there’s not active redevelopment going on,” he said. “And I’m concerned about the process, that once they’ve awarded a building to somebody and the redevelopment program isn’t being implemented, there’s an obligation to be proactive and pursue another route.”
DeMuro said the GSA told him it would keep in touch with Venerable in case the first deal didn’t go through. But DeMuro said he hasn’t heard from the agency.
“I think we deserve the opportunity to talk to them about what’s going on there,” he said.

Retraction
A July 5 Page 1 article, “Custom House vacant 2 years after rehab deal,” by Kennedy Smith, reported inaccurately that The Pochter Group of Chicago, chosen by the federal Government Services Administration to renovate the U.S. Custom House in Portland, previously had broken ground on a site in Wilmette, Ill., without gaining proper remediation permits.
In fact, the village of Wilmette issued The Pochter Group a demolition permit last spring, according to Lisa Roberts, director of community development at the village of Wilmette. During demolition, the developers discovered underground tanks and filed a remediation application with the Office of the Illinois State Fire Marshal, Roberts said. The permits were approved in March 2006, according to Jim Coffey, engineering technician at the fire marshal’s office, and the tanks were removed later that month by Chicago-based R.W. Collins.
The Pochter Group has applied with the village of Wilmette for building permits, which are still being considered, Roberts said.
The article also reported that Pochter Group owner Keith Pochter had never developed property in Portland. This is true, but the article neglected to report Pochter had worked in Oregon before, having renovated in 1997 the former First National Bank, a 31,000-square-foot historic building. Pochter sold the building in 2003.