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It’s been 15 years since the city bought the Centennial Mills property with the idea of seeing it developed. Now there are signs of progress.

Construction fences for demolition of buildings on the site are going up on the 4.74-acre parcel, once the site of a large grain milling and processing facility between Naito Parkway and the banks of the Willamette River. A new development planned by Harsch Investment Properties, however, is still at least a couple of years away because the two-phase demolition won’t be a quick or easy process.

The Portland Development Commission recently granted a contract with a guaranteed maximum price of nearly $8.6 million for the demolition to Northwest Demolition and Dismantling of Tigard to remove most of the 11 buildings on the site, which have been deteriorating for years.

The contract is for phase one demolition, which will involve only structures on land.

Structures over the river will be removed during a second phase of demolition and will require another action by the PDC board.

The city’s original plans for the property were to enhance the waterfront with open spaces and create more connectivity to the river. In 2006, the PDC and the Bureau of Planning completed the Centennial Mills Framework Plan after a six-month process that outlined different development possibilities. In March 2013, the PDC and Harsch Investment Properties signed a non-binding memorandum of understanding with the goal of future development.

In October of last year, Harsch president Jordan Schnitzer unveiled a redevelopment plan that called for 120,000 square feet of multifamily units, 80,000 square feet of office space and 24,000 square feet of retail space.

But the site is in bad shape, and neither demolition nor construction will be easy, according to Schnitzer.

鈥淎nyone who doesn’t approach this project humbly and thinks he has all the answers is a fool,鈥� Schnitzer said. 鈥淚t’s a very complex site.鈥�

The first phase of demolition itself will be daunting, and will include several warehouses 鈥� all connected but built at different times 鈥� as well as blending bins and grain elevators. The only structures that may be preserved are the old feed mill and flour mill, said Bruce Wood, the PDC’s manager of real estate and construction services. But he cautioned the PDC board that even those structures aren’t in good shape.

鈥淭he stairs are broken, there is lots of lead paint and there’s been a lot of effort to see what can be done because those buildings are part of the character of the site,鈥� Wood said. 鈥淲e have an alternate plan to demolish if we can’t save them. It’s very challenging.鈥�

The buildings also have 鈥渓ots of asbestos and lots of rats,鈥� Wood said, but PDC experts have already done a lot to clean up the site.

The site has a list of other problems as well, which led to a higher cost than anticipated, Jeff James of Northwest Demolition told the PDC board.

鈥淲hen you first put a proposal together there’s always limited information, but as we got deeper into the buildings we found things like (grain) elevator A has asbestos underneath it,鈥� he said. 鈥淲e’ll have to demolish the building around the elevator and then come back for the asbestos.鈥�

Lead-based paint in some areas also will be a problem, James said.

鈥淚n some areas it is very loose and flaking, and in some places we can’t even walk on the floors,鈥� he said. 鈥淪o we’re using water blasting and have to treat that safely.鈥�

James expects there will be other surprises encountered during the demolition, but he believes his firm is ready to handle whatever is uncovered.

鈥淲e plan for surprises and think about what could go wrong,鈥� he said. 鈥淏ut you can look at our history. We have a lot of very talented people.鈥�

Founded in 1954, Northwest Demolition’s biggest project to date has been an $80 million demolition of an aluminum smelter in Washington state. The company also has experience in demolishing and dismantling nuclear plants and chemical weapons plants.

Before demolition can start, haul roads must be established, PDC spokesman Shawn Uhlman said. There also are some permits that need to be finalized.

Demolition is slated to begin in earnest in August or September, and the first phase will take about a year. During that time, the far right lane of Naito Parkway will be closed off, but pedestrian and bike passage will be preserved.

The second phase of demolition may take longer and be even more complex because many of the structures hang over the Willamette River.

The Centennial Mills project has been through a lot of planning, and although developerSchnitzer called the process a 鈥渇ascinating journey,鈥� there are still many problems to solve, including what to do with the Portland Police Mounted Patrol Unit that has been housed on the site.

The police horses are off-site now, Wood told the PDC board. But whether they will stay there in the future, after demolition, is still up in the air.

鈥淭he resources aren’t there to build a new MPU and we have to make that building occupiable, which will cost about $500,000,鈥� Wood said. 鈥淭hen they will decide if they want to be there long-term or not.鈥�

The horse facility is a big sticking point for Schnitzer, because he said the PDC’s original request for proposals indicated that the MPU would be gone from the property.

鈥淭he current development agreement says the MPU’s going to stay and that’s taking half the site,鈥� Schnitzer said

He hasn’t decided how his development plans might change if that structure remains, but he said he believes that ultimately there will be a positive outcome for Centennial Mills.

鈥淭his process has been frustrating for our company, and certainly there have been delays that were not expected,鈥� he said. 鈥淏ut I think everyone is well-intended, and I’m still optimistic that we’ll be there cutting a ribbon one day.鈥�