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Trouble could be brewing for the Portland Development Commission‘s long-awaited redevelopment of a former flour mill into a foodie’s mecca on the west bank of the Willamette River.

Lab Holding of Costa Mesa, Calif., was selected more than four years ago to lead the Centennial Mills redevelopment project. But Lab Holding’s president, Shaheen Sadeghi, is concerned that a philosophical shift at the PDC conflicts with the project planned by the company. And unless differences can be worked out, Lab Holding will pull out of the project.

鈥淥ur team got involved in this project because of our expertise in creating unique public spaces,鈥� Sadeghi said in a letter. 鈥淐entennial Mills is a beautiful complex with potential to become a landmark for Portland. We are afraid that PDC’s new direction will severely limit this potential.鈥�

Sadeghi cited a recent directive from the PDC that requires 50 percent of the overall project 鈥� approximately 75,000 square feet 鈥� to be leased to businesses that sell globally. And the PDC would prefer that these businesses represent one of the five cluster industries it is working to develop: software; activewear and outdoor gear; clean tech and sustainable industries; advanced manufacturing; and research and commercialization.

The move, according to PDC Executive Director Patrick Quinton, is to align the project with the agency’s focus on job creation. The agency recently completed the .

鈥淭he focus hasn’t necessarily shifted, but we have underscored the direction we are heading,鈥� PDC spokesman Shawn Uhlman said.

LAB Holding won the right to redevelop the PDC-owned Centennial Mills site in 2006. The firm’s pitch 鈥� titled SEED 鈥� was to repurpose the area into a vibrant public space promoting Portland’s culinary culture and connecting the waterfront to the Pearl District. This would include several small, vendor-like spaces featuring local, artisan food, as well as ample public space and some office space on the higher floors.

鈥淥ur inspiration for the SEED at Centennial Mills project comes from the great food halls of the world,鈥� Sadeghi said.

In 2008, Lab Holding and the PDC agreed on a memorandum of understanding that laid out how the project should move forward. The next step was development of a disposition and development agreement that would specifically lay out public and private investments and the project timeline. A DDA was expected to be presented to the PDC’s Board of Commissioners in late 2010, but none has surfaced.

The preliminary idea was for the firm to invest approximately $40 million and for the PDC to contribute $8.6 million in urban renewal money.

鈥淭he revised (directive) for Centennial Mills is a radical departure from the initial (request for proposals) offering, and we believe a destructive approach to retooling a historic structure, and counterproductive to the community base of the SEED project,鈥� Sadeghi said. 鈥淚f the original RFP required conventional office space, our company, which specializes in community-based, historic and site-specific products, would never have submitted a proposal.

鈥淲e are not interested in building a $40 million office building in Portland. We need PDC to honor its original commitment to this project in order to continue.鈥�

Sadeghi projected that the SEED proposal would create nearly 900 jobs. He also said that a shift to an office focus would not only go against his research, but also be an unsuitable use for the historic complex.

鈥淭he new, limited focus on five industries not only precludes other viable economic drivers, but also ignores those variances that a particular location, building or neighborhood may present, as is the case of Centennial Mills,鈥� he said. 鈥淭here are numerous existing opportunities for PDC to create new, large, office buildings suitable to attract these users.鈥�

Lab Holding would like to move forward with the original vision for the project and has asked the PDC to commit to it. PDC officials are remaining tightlipped about what they plan to do moving forward.

鈥淧DC remains fully committed to the redevelopment of this important historic resource,鈥� Uhlman said. 鈥淥ur vision, which has been consistent throughout, is to leverage our public resources to create a project (that) reflects the regional significance of the property.鈥�