A Portland real estate investment and development firm has added a third historic building to its Central Business District portfolio, effectively positioning the trio for adaptive reuse.

Arthur Mutal, in a joint venture with NFN Investments, has purchased the 102-year-old Woodlark Building for $6.85 million. The nine-story office building, located on the Northeast corner of Southwest Ninth Avenue and Alder Street, is the third property Arthur Mutal has acquired on the block in recent months with an eye toward newer and better uses.

At the end of last year, Arthur Mutal saved the 105-year-old Cornelius Hotel (slightly east of the Woodlark Building) from the wrecking ball by purchasing it from TMT Development for $2.07 million. That followed the firm’s purchase of the 99-year-old Stevens Building (due north of the Woodlark Building) from the Church of Scientology for $4.35 million.

In a previous interview with the 91��Ƶ, Jeff Arthur, a managing principal at Arthur Mutal, said the company is considering for the three buildings a variety of schemes that could include a mix of hotel rooms, office space and multifamily housing. Arthur, who was out of the country at the time of the sale, was unavailable to discuss the plans further at present.

Arthur reported via email, however, that the Woodlark’s seller was Bill Jay Corp., and that Nick Kassab at Capacity Commercial represented both groups in the transaction.

“We continue to be bullish on Portland and the office market,” Arthur wrote via email.

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Demolition permits were issued in June, but the historic Cornelius Hotel in downtown Portland won’t be razed.

Portland-based Arthur Mutal Investments LLC is purchasing the 105-year-old building (at 801 S.W. Alder St.) with plans to redevelop it into multifamily housing. The building, owned by TMT Development and listed on the National Register of Historic Places, was slated for demolition after funding for a previous redevelopment effort by Guardian Real Estate Services fell through in May.

Jeff Arthur, an Arthur Mutal managing principal, said TMT is providing short-term financing for the $2.1 million purchase, which is slated to close in two weeks.

On the same block, Arthur Mutal recently bought the 99-year-old Stevens Building (at 812 S.W. Washington St.) from the Church of Scientology for $4.35 million, and might buy the Woodlark Building (at 813 S.W. Alder Street) next door. Company officials see those buildings as the key ingredients in a large, integrated mixed-use development.

“That area is getting better by the day, and we’re hoping to revitalize it even more and make that block a nice transitionary piece between the east end and the (Central Business District),” Arthur said.

A lot of planning work remains, but Arthur said the initial vision for the Stevens Building is to convert it into a boutique hotel replete with a pool, a spa and a restaurant; creative office also is a possibility. The company will refine that concept over the next four to five months.

Arthur Mutal is a real estate investment and development firm that specializes in restorations. One of its projects was redevelopment of the 300 Building in the Pearl District. The company currently is working with NFN Investments on an adaptive reuse of the R.J. Templeton Building at 230 E. Burnside St.

“The Arthur Mutal team is a very creative group, and we really like their projects,” said Vanessa Sturgeon, president of TMT Development. “So we felt they would do something really great with the building, and in a neighborhood where we own a lot of the real estate.”

TMT Development recently restarted construction of its $175 million, 30-story Park Avenue West tower. Slightly north, the Cornelius Hotel block is poised to absorb the influx of activity. Lewis & Clark Bank provided the financing for the Stevens Building purchase.

“The thing we’ve noticed in just talking to various lenders, both in traditional markets and in the debt fund market, is the appetite for hotels is getting better, and the desire for Portland’s market is getting better,” Arthur said. “Momentum is definitely in our favor.”

Adding some multifamily housing can’t hurt in today’s hot rental market, he said in reference to plans for the condemned Cornelius Hotel. In May, Sturgeon said the building would need approximately $1.5 million worth of fire and life safety upgrades before it could be occupied.

Arthur Mutal’s redevelopment would likely create approximately 20 apartments with access to the planned boutique hotel amenities. Arthur said he has an old rendering of the building from the 1920s, and his hope is to bring out some of that historic flair.

Arthur Mutal is still weighing whether to purchase the Woodlark; Arthur said it could be converted into creative office space or become additional multifamily housing.

“We’re pretty pumped,” he said. “Obviously the buildings are older and have a lot of challenges, but we think it’s definitely something we can tackle.”

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Finnegan’s Toys & Gifts, the independent and locally-owned toy store, is moving three blocks from its current location in downtown Portland.

Finnegan’s will leave its space at the Blanchard Building, 922 S.W. Yamhill Street, and move to the Stevens Building at 820 S.W. Washington Street, the company said today. The windows of its new ground floor retail space are already painted.

The store will occupy space on the lower level and the second floor. The grand opening will be next month.

The store has been at its location on Southwest Yamhill Street for 30 of the 34 years its been in business. It’s moving because the new building has “a better configuration of space” and “a lot more light,” said owner Karen Leppman.

“It’s almost the same neighborhood,” Leppman said. “But it feels a bit different. It’s near the food carts, which is  a big draw.”

Finnegan’s also opened a new location at Bridgeport Village last year.

Doug Bean of Doug Bean & Associates represented Finnegan’s in the transaction. Bob Butler of Butler Brokers represented the owner of the Stevens Building, the Portland chapter of the Church of Scientology.

The Stevens Building is currently for sale at an asking price of $4.95 million.

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The Portland chapter of the Church of Scientology is being sued by a former tenant of a downtown building it owns.

, Teresa Barney filed a lawsuit Feb. 4 claiming she was exposed to toxic fumes in the Stevens Building. She claims $1.9 million in economic damages and $3 million for pain and suffering.

The fumes are allegedly from a built-in cabinet in Barney’s workspace that were released by a space heater – a space heater she claims she had to use because property managers would not fix the building’s heating system after several requests.

Along with the church, the lawsuit mentions the property manager, Income Property Management Company, and Barney’s employer, Legal Aid Services of Oregon.

The church currently has the Stevens Building for sale and plans to move into the Sherlock Building this summer.

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The Portland chapter of the Church of Scientology is being sued by a former tenant of a downtown building it owns.

, Teresa Barney filed a lawsuit Feb. 4 claiming she was exposed to toxic fumes in the Stevens Building. She claims $1.9 million in economic damages and $3 million for pain and suffering.

The fumes are allegedly from a built-in cabinet in Barney’s workspace that were released by a space heater – a space heater she claims she had to use because property managers would not fix the building’s heating system after several requests.

Along with the church, the lawsuit mentions the property manager, Income Property Management Company, and Barney’s employer, Legal Aid Services of Oregon.

The church currently has the Stevens Building for sale and plans to move into the Sherlock Building this summer.

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The Church of Scientology last week purchased its second historic downtown Portland building after the first didn’t meet its needs.

The Sherlock Building, at 309 S.W. Third Ave., is planned to be the headquarters for the church’s Portland chapter. The purchase is the second attempt for the church to establish a headquarters in Portland. The first building it bought, the Stevens Building at 812 S.W. Washington St., didn’t work out and is now up for sale.

“We love the Stevens Building,” said Gwen Barnard, spokeswoman for the Portland chapter of the church. “We don’t want anyone to think there’s anything wrong with it.”

The Church of Scientology prefers iconic buildings in cities where it locates headquarters. It purchased the Stevens Building for $5.38 million in 2008. It’s only a few blocks away from the Sherlock Building, which it purchased for $6.4 million from Seattle-based Urban Renaissance Group. Portland-based Butler Brokers managed the sale for the buyer. Norris, Beggs & Simpson represented the seller. Urban Renaissance Group bought the building in 2007 for $9.75 million.

“We had the opportunity to purchase the Sherlock Building for what we got it for,” said the Rev. Steven Crandell, president of the church’s Portland chapter. Crandell said the church has been in negotiations to buy the building since last fall.

After the church purchased the Stevens Building and completed an architectural inspection, it discovered it could not build a chapel in the building without completing expensive renovations, Crandell said. The church needs a space for a chapel that would fit about 250 people.

“We knew the Stevens Building’s best use was for an office building,” Crandell said, but added that the building has only, at maximum, contiguous spaces of 5,000 square feet. “At the time, it was the best building available for the price point,” he said.

Crandell said the church then began looking for a “more suitable” building to house its operations. The Sherlock Building has open floors that wouldn’t need renovation to accommodate a chapel. The Stevens Building was put up for sale this year. The church is asking $4.95 million.

The six-story Sherlock Building has more square footage than the 12-story Stevens Building – 61,430 square feet to 56,480 square feet. The Sherlock Building has red exterior brick and floor-to-ceiling windows that extend up the side to the fifth floor. Both buildings are on the National Register of Historic Places.

“It’s such a classic building,” Crandell said.

When the church purchased the Stevens Building, it told the tenants at the time that they would have to relocate. The church prefers to occupy the entire space of its headquarters. But after the church decided it would not convert the Stevens Building into its headquarters, it told the remaining tenants they could stay.

The Sherlock Building has only one tenant: Ruth’s Chris Steak House, which occupies the ground floor. The church doesn’t plan to renew the restaurant’s lease, if the restaurant opts to renew, Barnard said. Typically, the church uses the ground floor of a headquarters as a space where people can learn about Scientology.

Crandell said he anticipates the restaurant will move out on its own accord.

“We’re going to be here as long as we need to,” said Chris Jaworski, general manager of Ruth’s Chris.

Office space in the Sherlock Building was vacated last year by Zimmer Gunsul Frasca Architects. That and other space will receive a major seismic upgrade and other renovations scheduled to begin as soon as permitting is completed.

The Portland chapter of the Church of Scientology claims about 1,200 members in Oregon and Southwest Washington.

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When the Church of Scientology bought the Stevens Building in 2008, it told tenants to vacate when their leases ended. Most of them did.

Now the Portland building is 42 percent vacant, another 20 percent is used for storage, and the church no longer plans to move in.

“It would be nice to have it back to where it was in 2006 – about three-quarters full,” said Steven Ballinger, who has maintained a Princeton University Press sales office in the building for four years.

The Stevens Building, at 812 S.W. Washington St., is a 12-story high rise the international church thought could be its next downtown church center. But the building ultimately proved unsuitable, and the church is selling it.

“We found another possible opportunity that might fit our needs better,” said the Rev. Steven Crandell, president of the Portland chapter of the church. He would not elaborate.

The Portland chapter claims about 1,200 members in Oregon and Southwest Washington.

The church paid $5.38 million in cash for the building with intentions to renovate it. The ground floor, 4,527 square feet of retail space, was to be a lobby where people could come in to learn about Scientology. The church also wanted a chapel.

“What we didn’t realize is that there wasn’t a space big enough to have a large church service or a large church event,” said Gwen Barnard, spokeswoman for the Portland chapter.

The church needed a space that would fit about 250 people, but the architecture firm it hired – Gensler, a global firm headquartered in San Francisco – advised that tearing down walls would compromise the stability of the building, Barnard said.

Most of the space in the building is for small offices. The church occupies a few offices and is leasing others.

“I like the neighborhood, and I like being downtown,” said Ballinger, who pays $14.47 per square foot, per year. “And the price is right.”

Investors have been looking at the Stevens Building, said broker Robert Butler of Butler Brokers Inc. He expects a buyer will want to be an owner-user operating on one of the upper floors, which have unobstructed views.

The Stevens Building was built in 1914 and is on the National Register of Historic Places.  It was renovated in 1954 by famed Portland architect Pietro Belluschi.

The church is asking $4.95 million for the building, which has approximately 44,000 net rentable square feet and a net operating income of $355,042.

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