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The ailing, iconic Centennial Mills site in Northwest Portland may be one step closer to redevelopment.

The Portland Development Commission on Tuesday approved a memorandum of understanding with Harsch Investment Properties for it to redevelop the century-old former flour mill as a commercial and residential mixed-use center. The MOU accompanies a $350,000 predevelopment loan from the PDC that Harsch will use 鈥� along with $350,000 of its own 鈥� to address lingering concerns about project feasibility.

Those concerns mainly are with the structural integrity of the site鈥檚 buildings and piers 鈥� many that date back to 1910. Due diligence line items include $446,000 for planning, architecture and landscape design; $50,000 for structural work; and $25,000 for civil work, among others.

The PDC in September 2012 was prepared to issue a similar contract to a joint team of Harsch Investment Properties and Venerable Properties, but negotiations were put on hold because of the death of Venerable鈥檚 president, Art DeMuro. Harsch is now proceeding without Venerable, according to the PDC鈥檚 report, though Craig Kelly, Venerable鈥檚 new president and principal broker, is listed as part of the project鈥檚 leasing team.

PDC spokesman Shawn Uhlman said board commissioners approved the resolution 3-0. Charles Wilhoite was absent and Commissioner Steven Straus, 骋濒耻尘补肠鈥檚 president, abstained due to a 鈥減erceived鈥� conflict of interest. Glumac is listed as the mechanical and electrical contractor for Harsch鈥檚 development team.

Because only three of the five commissioners voted, Uhlman said the PDC must wait 30 days before issuing the predevelopment money to Harsch. The developer would likely repay that money as part of a future construction loan or property sale agreement 鈥� though it may not have to repay the loan at all.

If, after conducting its due diligence, the company were to find the project infeasible, it could request loan forgiveness 鈥� at the PDC鈥檚 sole discretion. Identified criteria for that request include: inability to attract equity investment; failure to attract tenants; inability to obtain project financing; excessive development costs and/or insufficient operating income; and loss of the borrower鈥檚 financial capability.

Harsch envisions reactivating the site with 80,000 square feet of cluster industry/traded sector employment space; 71,000 square feet of retail; 36,000 square feet of arts-related space; 42,000 square feet of multifamily units; and 295 parking spaces.