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The city will spend $195 million to retrofit the Portland Building, which is only 33 years old but maligned by structural defects and other flaws.

The exterior of the Michael Graves-designed postmodern office building will be left alone while the inside is gutted and given a seismic overhaul, per a preliminary plan approved by the Portland City Council on Wednesday.

The city’s chief administrative officer, Fred Miller, told the council that he wants to help minimize the project cost by keeping some of the 1,300 city employees who work at the Portland Building there during construction. Presently, approximately $30 million would be used to relocate employees and secure temporary workspace during the five-year project.

鈥淲e could save millions,鈥� Miller said.

The council on Wednesday heard and approved three resolutions related to the project, bringing a formal end to its budget-setting phase. The city will now solicit bids from contractors before a design-build contract is considered by the council.

City commissioners were dismayed the cost was so high above initial estimates, one of聽which was less than聽$100 million. Miller told the council it would be more expensive to tear down the Portland Building and start over, or build elsewhere.

鈥淚t’s important to note that this is the lowest-cost option,鈥� Commissioner Nick Fish said.

Fish聽and the other commissioners approved the first聽resolution to set a timeline of five years and a cost of $195 million.聽They repeatedly sought assurance from Miller that those numbers would not grow.

鈥淚’m still skeptical,鈥� said Commissioner Dan Saltzman, who ultimately voted to approve the resolution.

The second resolution equalized rents across all city departments. The renovation will be funded through the rent increases and a 5 percent appropriation from the general fund.

The third resolution 鈥� to dedicate 1 percent of the project cost to opportunities for women and minorities 鈥� elicited the most discussion on Wednesday. Minority business owners and advocates questioned the figure and asked how officials determined it.

鈥淎lthough it sounds like a good number, I’d like to know how much that really is,鈥� said Maurice Rahming, president of O’Neill Electric.

Also, three of the building’s current vendors 鈥� two restaurateurs and a retail shop operator 鈥� spoke at the hearing and sought reassurances about the project.

The 15-story Portland Building was completed in 1982 for $25 million. The iconic Portlandia statue was added near the front entrance three years later. The building is listed on the National Register of Historic Places; however, it’s not up to current seismic code and is subject to plumbing and electrical problems. Those issues and the nontraditional exterior have frequently drawn criticism.

鈥淵ou have $195 million,鈥� Mayor Charlie Hales told Miller. 鈥淢ake this right 鈥� make us proud.鈥�