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Lease of mind: Why developers should consider lease options in real estate agreements | Opinion

Chris Criglow and Ben Criswell — Thu, 22 May 2025 16:02:09 +0000

Chris Criglow and Ben Criswell

Before leasing land, it is important for developers to understand the benefits of using a lease-option structure instead of jumping straight into a leasehold. By deliberately separating and sequencing the grant of rights from a landowner to a developer, parties can better manage potential reporting obligations under the Agricultural Foreign Investment Disclosure Act (AFIDA) and environmental liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

Understanding lease options vs. leaseholds

A “lease option” agreement can give you the right, but not the obligation, to lease real property in the future. A lease option is generally considered to be a contractual, personal property right. On the other hand, a “true lease” agreement creates a leasehold estate once the agreement is signed. Leaseholds generally give rise to contractual, real property rights. By using a lease option or structuring a lease to function like a lease option, you can better control when real property rights are created, and by extension, when certain legal obligations/implications take effect.

Why this matters: AFIDA

AFIDA is a federal law that requires foreign persons (including entities organized or formed under the laws of foreign governments and domestic entities that are substantially controlled by foreign persons) to file a report with the USDA within 90 days of acquiring or transferring “any interest” in agricultural land. Leasehold interests of more than 10 years trigger an AFIDA filing requirement, as “any interest” is defined broadly. However, certain types of interests are excluded from the filing requirement, including “contingent future interests.”

If your lease has a term of longer than 10 years, you might need to make an AFIDA filing with the USDA. However, the USDA appears to interpret the “contingent future interest” exception to mean that lease options are not reportable interests because options do not effectively convey an ownership interest in agricultural land. The USDA’s Handbook on Foreign Investment Disclosure explicitly states that “options are considered future interests” and are not reportable. Some developers rely on this safe harbor to delay AFIDA filings after lease execution, arguing that the development period under a lease is functionally equivalent to an option period, with the AFIDA filing requirement triggered by the shift from the development period into the operations period of the lease.

While the clearest way for a developer to avoid triggering an AFIDA filing requirement would be to use a true option agreement with a lease attached as an exhibit, many developers favor a more streamlined document put in front of landowners. Thus, some agreements maintain the look and feel of a lease while making the distinction that the developer’s real property rights under the agreement are “contingent future interests” vesting upon a defined commencement date, not the agreement effective date. The developer can then treat that commencement date as the trigger for the 90-day AFIDA filing window.

Why this matters: CERCLA

CERCLA, on the other hand, is a federal law that deals with environmental liability. CERCLA creates a defense to liability a tenant can preserve by conducting all appropriate inquiries (AAI) before it acquires a leasehold interest in the facility. One of the key steps in a tenant’s AAI is obtaining a proper Phase I environmental site assessment within 180 days before the creation of the tenant’s leasehold estate.

While there is not much case law on point, courts deciding questions of tenant liability under CERCLA seem mostly concerned with the level of control the tenant had over the subject property. We are not aware of any case law interpreting whether a tenant under a lease could preserve a defense to CERCLA liability by arguing that it conducted AAI before it exercised exclusive control over, or earth-moving activities on, the subject property. Still, a tenant would be in a better position to argue for that defense if the lease itself only creates a leasehold estate in favor of the tenant upon a defined commencement date (e.g., the start of construction), not the agreement effective date.

How to structure your agreement

Ultimately, a developer’s ability to designate when its real property rights vest allows for greater control over timing for (1) the trigger date for the AFIDA filing requirement and (2)��the receipt of a Phase I ESA to preserve a defense to liability under CERCLA.

There are two approaches to address these concerns: (A) using a true option agreement with an agreed-upon form of lease attached as an exhibit; and (B) using a nuanced lease agreement that makes the distinction between the grantee’s rights during a development period (e.g., a license for site access and inspection only; no possessory interest) and the grantee’s real property rights (e.g., leasehold and easement rights; possession and right of use) vesting upon a defined commencement date, not the agreement effective date.

By using either of these strategies, you can better manage reporting obligations under AFIDA and/or environmental liability under CERCLA, providing important flexibility as you plan and develop your projects.

Chris Criglow is a Stoel Rives LLP partner. He practices in the real estate, development and construction group. Contact him at 503-294-9267 or��chris.criglow@stoel.com.

Ben Criswell is a Stoel Rives LLP associate. He practices in the real estate, development and construction group. Contact him at 503-294-9531 or��ben.criswell@stoel.com.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the authors and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither author nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

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Stoel Rives LLP

scott.huish — Fri, 18 Apr 2025 20:49:16 +0000

Founded in 1907, Stoel Rives remains Oregon’s largest law firm with a real estate practice dating back 140 years.

As Oregon confronts its housing crisis, the firm has emerged as a pivotal legal force behind major affordable housing developments across the state. It recently represented Related Northwest in a transformative 13.7-acre redevelopment project in Milwaukie. The multi-phase initiative will convert low-density, single-family homes into a 500-unit affordable housing neighborhood with parks and common areas. Stoel Rives also continues its two-decade partnership with Home Forward, Oregon’s largest affordable housing provider. For rural communities, Stoel represented Chisman Development in financing five affordable housing projects last year, including the 100-unit Cypress Hill Apartments in The Dalles, Cascade Locks and Reedsport.

The firm’s work on the Portland Art Museum renovation project prompted Gareth Nevitt, chief financial officer with PAM, to nominate the firm for All-Star recognition. Stoel represented PAM on the construction and development of the project, which adds nearly 100,000 square feet of exhibit and public space. It is one of the largest capital investments in the arts in Oregon’s history. Stoel attorneys assisted PAM on drafting and negotiating the construction contracts for the new building and spaces, and they continue to assist with change order negotiations and ongoing construction-related issues.

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New Washington law applies limitations to retainage on private construction projects | Opinion

Bart Reed — Fri, 18 Aug 2023 12:30:15 +0000

Bart Reed

Emily Vo

On May 9, Washington Gov. Jay Inslee signed into law Senate Bill (SB) 5528, which limits the percentage of retainage withheld from contractors on private construction projects in Washington.

During a construction project, the withholding of retainage is a common practice and a frequently negotiated business term of a construction contract. This generally accepted custom in the industry is primarily regarded as security for an owner or contractor to ensure prompt and faithful performance by downstream contractors. The concept of retainage is an important tool to mitigate the risk of default by a contractor or its subcontractor, since monies withheld by an owner or contractor can be used to correct or complete defective or deficient work on a project.

Before the bill, Washington retainage statutes only applied to public works projects. See RCW 60.28.011. However, as of July 23, 2023, a similar statute will now apply to private construction projects in Washington. Since the retainage statute has recently taken effect, it is crucial for owners and general contractors to understand their obligations under the law and the potential impact these changes have on their construction contracts executed on or after July 23.

The new retainage statute, which will be codified as a new chapter in Title 60 RCW, largely mimics the retainage limits that exist in the public works context. SB 5528 sets forth two sections. The first of which limits retainage on private construction projects to no more than 5 percent of the contract price of the work completed and imposes interest, at the rate of 1 percent per month, if payment is not made after notification is received that the work (for which payment is requested) is complete. The second section of the approved law creates an opportunity for contractors or subcontractors to tender to the upstream owner or contractor a retainage bond in lieu of retainage.

The new statute focuses on private construction projects and does not apply to public improvement projects or single-family residential construction of fewer than 12 units.

Retainage Limited to 5 Percent

SB 5528 limits the amount of retainage that can be withheld by an owner, contractor, or subcontractor on private construction projects. The retainage amount that can be withheld is capped at “5 percent of the contract price of the work completed.”

Interest Imposed on Amounts Owed for Completed Work��

Another significant addition by SB 5528 relates to the owner’s or contractor’s obligations to pay after receiving notification from downstream parties of completed work and interest imposed for failure to pay for the completed work.

The statute imposes an interest rate of 1 percent per month on final payments due a contractor or subcontractor. The interest commences 30 days after the contractor or subcontractor has completed and the owner has accepted the work.

The statute also outlines a procedure regarding a contractor’s or subcontractor’s notification of its final completed work and the commencement of interest on unpaid final contract amounts. After completion of all the contracted work, the contractor or subcontractor must notify the party for whom the construction work is performed under the contract. The exact form of this notification is not specified in the statute. Within 15 days of receiving the notice of completion, the party for whom the work is performed must (1) accept the work or (2) notify the contractor or subcontractor of what portion of the work remains incomplete under the contract.

It is noteworthy that SB 5528 reflects that the contractor may notify the owner of completion of a subcontractor’s work, and the statute seems to require the same notification process: 30-day notice from the contractor, 15-day notice from the owner, and, in the event the owner does not respond, interest (at the rate 12 percent per annum) commences 30 days after the end of that 15-day period (whether or not the owner accepts the work or fails to provide notice) in the event of nonpayment. This new law appears to place an obligation on the owner to determine whether a subcontractor’s work is complete, to mitigate the risk of accruing interest on unpaid amounts.��An owner can manage this risk by independently verifying the completion of the subcontractor’s work (an onerous task since the owner does not have direct contractual relations with or oversight over the subcontractors) or by relying on a certified statement of the general contractor that the work is complete and reserve rights to pursue the general contractor (e.g., via indemnity) if that statement proves false.

If the owner or contractor does not accept the work or notify the contractor or subcontractor of the incomplete work within 15 days after receiving the notice, interest at the rate of 1 percent per month on the final payment due to the contractor or subcontractor commences 30 days after the end of the 15-day period. The interest runs until final payment is tendered to the contractor or subcontractor.

A contractor’s obligation to pay interest to a subcontractor does not begin until that contractor receives payment of the subcontractor’s retainage, provided that the contractor submitted the subcontractor’s retainage request to the owner or upper-tier contractor within 30 days of the contractor’s receipt of the subcontractor’s retainage request. This language of the statute seems to address the risk of imposing interest on the contractor based on delayed payment from the owner (or an upper-tier contractor).

Bonds in Lieu of Retainage

��The second section of SB 5528 introduces a mechanism for contractors or subcontractors to get paid their retainage prior to full completion on a project and allows for contractors or subcontractors to post a retainage bond as a means to obviate the withholding of retainage and receive their earned contract billings as the work is performed and accepted on the project.

Under the new law, in lieu of retainage, a contractor or subcontractor may tender a retainage bond, which the owner or contractor “must accept,” not to exceed 5 percent of the amount earned by the contractor or subcontractor.

When an owner accepts a bond in lieu of retained funds from a contractor, the statute mandates the contractor to accept like bonds from any subcontractor or supplier from which the contractor has retained funds. The contractor must release funds retained from the subcontractor or supplier within 30 days of accepting the bond from the subcontractor or supplier.

Additional requirements include that a contractor or subcontractor must provide a good and sufficient bond from an authorized surety company, conditioned on the contractor or subcontractor: (1) faithfully performing the provisions of the contract; (2) paying all laborers, mechanics, subcontractors, and material suppliers, and all persons who supply such contractor or subcontractor, or other subcontractors, with provisions and supplies for the carrying on of such work; and (3) paying the taxes, increases, and penalties incurred on the project.

The contractor or owner may require that the authorized surety have a minimum A.M. Best financial strength rating so long as that minimum rating does not exceed A-. The contractor may withhold the subcontractor’s portion of the bond premium, provided the contractor tenders a retainage bond to obtain a release of the subcontractor’s retainage.

SB 5528’s Effect on Current and Future Private Construction Contracts

Construction industry stakeholders will be curious to learn whether or to what extent the enactment of this new legislation will apply to and affect their contracts executed before July 23. Although the statute is phrased in terms of future actions (withholding), it raises questions about the enforceability of contracts made in the past and therefore raises questions about whether the statute should be given retroactive effect. See, e.g., Gillis v. King County, 42 Wn.2d 373, 255 P.2d 546 (1953) (analyzing amendment to street vacation statute); In re F.D. Processing, Inc., 119 Wn.2d 452, 832 P.2d 1303 (1992) (analyzing amendment to agricultural lien statute); Cameron v. Atlantic Richfield Company, 8 Wn.App.2d 795, 442 P.3d 31 (2019) (analyzing amendment to construction statute of repose).

A statute is presumed to have prospective effect only unless the legislature indicates otherwise, or unless the statute is deemed “curative” or “remedial.” See, e.g., Densley v. Dep’t of Ret. Sys., 162 Wn.2d 210, 223, 173 P.3d 885 (2007). Neither SB 5528 itself nor its legislative history indicates the legislature’s intention to have the statute apply retroactively. SB 5528 is not curative or remedial in the relevant sense.

Even if a statute is intended to be retroactive, it may not be applied to interfere with vested rights, which include contractual rights (see, e.g., Gillis, 42 Wn.2d at 376), nor may it “impair the obligation of a contract,” Scott Paper Co. v. City of Anacortes, 90 Wn.2d 19, 35, 578 P.2d 1292 (1978).

Based on these legal principles, it seems reasonable to conclude that SB 5528 does not have retroactive effect and that contracts existing on its effective date (July 23) calling for retainage greater than 5 percent are not affected. Contracts made on or after July 23 should be subject to the 5 percent retainage provision. If an owner has an ongoing relationship with a contractor, questions may arise whether a new contract is formed or an existing contract amended. The answers to these questions may determine how the new statute will apply.

Conclusion

The enactment of SB 5528 represents a significant change to how owners and contractors can withhold retainage on private projects in Washington. To comply with the new law, owners and contractors alike should carefully prepare their contracts to ensure precision in defining completion of the work and consider strategies for implementing security, via limited retainage rights or bonds in lieu of retainage, to manage and mitigate the risk related to delayed or incomplete work.

Bart Reed is a partner and member of the Construction and Design Group in the Seattle office of Stoel Rives LLP and may be reached at (206) 386-7568 or bart.reed@stoel.com. Emily Vo was a 2023 summer associate at Stoel Rives LLP and is a student at the University of Washington School of Law.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

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OP-ED: A key battleground: material price escalations and supply chain disruptions

Colm Nelson — Fri, 16 Jul 2021 13:27:23 +0000

Colm Nelson is a partner and member of Stoel Rives‘ construction and design practice group. Contact him at 206-386-7525 or colm.nelson
@stoel.com.

Material price escalations and supply chain disruptions are hot topics in the industry, with many clients inquiring about their rights and how these risks should be shared. Some have even questioned whether their projects should proceed given the volatility in the market.

For instance, I saw at least one project’s price increase by over $10 million in a matter of months due to the precipitous price increase in lumber. The resulting sticker shock was mitigated somewhat by the recent drop in lumber prices. However, the developer and contractor team were not alone in asking whether the project should proceed and, if so, who carries the risk of future price changes and/or supply chain delays.

Generally speaking, under a standard Guaranteed Maximum Price (GMP) contract, such as the American Institute of Architects’ A102/A201 combination, the contractor is guaranteeing its price against price escalations – i.e., this is a contractor risk. This risk allocation can be adjusted through a variety of methods, including the use of: 1, allowances; 2, contingency; 3, savings bonus; or 4, specifically tailored risk-sharing provisions, addressing both compensation adjustments and/or time adjustments.

How allowances and contingency work in concert, and what those terms mean, differs even among sophisticated contracting parties. For many in the Pacific Northwest, an allowance is merely a placeholder for the expected “Cost of the Work.” If the allowance item costs more than the placeholder, the GMP is increased. If it is less, then the owner should get a deductive change order.

However, industry standard forms like the AIA A201 don’t treat allowances this way and in fact state that “Contractor’s costs for unloading and handling at the site, labor, installation costs, overhead, profit and other expenses contemplated for stated allowance amounts shall be included in the Contract Sum but not in the allowances” – i.e., no increase in the GMP for additional time or labor related to the allowance item.

Under the AIA approach, the contractor would get more, for example, for the price of the door, but wouldn’t be allowed to seek an increase for the time it took to install it. Contingency for some owners and contractors is simply padding to cover additional costs of the work until the GMP ceiling is exhausted. For others, contingency is solely for discrete items, and only to be used upon advance written approval by the owner. Many contractors prefer to list price escalations in materials as an approved use of contingency.

When contract discussions become logjammed over risks that neither party can control, finding an outcome where both the owner’s and contractor’s interests are aligned is sometimes the best way to advance discussions. That often means a sharing of risk to some degree, full transparency by both sides, and even sharing in any savings for effective materials and subcontractor buyouts. Alternatively, if the owner is not willing to share in the risk, which is not uncommon, it should expect the contractor to ask for a higher fee for taking on that risk, or price padding on certain line items.

Supply chain disruptions and resulting delays are treated differently and separately from price escalation risks. Unusual delay in deliveries is generally a basis for a contract time adjustment under most industry-accepted contracts. This is important to contractors because, without the adjustment, they could face liquidated damages or other delay liability.

Who pays for the extended costs resulting from the delays is a more difficult question and not squarely addressed in the AIA A201. Owners feel they are already losing money because of the late delivery (time is money), and contractors question why they should carry the costs.

Historically, given the economic risks to the owner resulting from delay, contractors typically agree to limit their recovery to a time extension and/or expressly negotiate a contingency line item to cover this risk. Also, because contractors are in a better position to control timely subcontractor buyouts and coordination of work among subcontractors, including through the use of float, some argue that contractors should carry this risk. In other words, the party in the best position to control a risk should be the party who bears it.

While not uncommon in other industries, insurance products to cover price escalations in materials are not commonly used in the construction industry. However, sensing the stress in the marketplace due to lumber prices, insurance products are now being offered for those interested in “hedging” risk against future price fluctuations. As we work through the consequential effects of the pandemic on supply chains, it will be interesting to see if the use of these products proliferates through the market. As with bonds, which are rarely used on private projects below $100 million, the cost and ability to timely collect on such products will dictate whether owners and contractors are interested in hedging their bets in this fashion.

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Portland attorney to lead firm’s diversity committee

Chuck Slothower — Tue, 26 Jan 2021 21:02:36 +0000

Karen O’Connor

Stoel Rives has appointed Karen L. O’Connor chairwoman of its Diversity, Equity and Inclusion Committee. It develops strategies and tools to help the firm achieve its goals for diversity, equity and inclusion in its workforce.

O’Connor, who is based in Portland, is a partner in Stoel Rives’ Labor and Employment group. She focuses on counseling and litigation concerning workplace harassment and discrimination, among other complex legal issues.

As chairwoman, O’Connor will oversee implementation of the firm’s long-term diversity, equity and inclusion initiatives. She has been a member of the DEIC since 2018 and served most recently as vice chairwoman. O’Connor has worked closely with Chairman Timothy M. Taylor to ensure a smooth transition, according to Stoel Rives. Dexter J. Pearce, an associate in the Portland office, will serve as vice chairman of the committee.

Throughout the construction and related service industries, companies are racing to diversify. Many white-owned firms are struggling to diversify their ranks, particularly at the managerial and executive levels. Recruitment can be a “chicken or the egg” problem, O’Connor said in an interview.

“Attracting people of color is made more difficult if you don’t have people of color,” she said. “You have to go at it from both angles: Recruit at higher-than-entry level, so you can then provide people … entry-level mentors and paths to success.”

Retaining diverse employees also requires ongoing investment, including professional development and assignment of mentors, O’Connor said.

“You have to actively support the people that you have, which is kind of challenging right now during a pandemic,” she said.

Companies can also benefit by investing earlier in the pipeline, O’Connor said. Firms can forge connections with institutions such as Benson Polytechnic High School that may supply a more diverse candidate pool later, she said.

The DEIC was established in 2005. It promotes and monitors Stoel Rives’ initiatives and progress in attracting, developing and retaining diverse attorneys and staff.

“Our culture needs to reflect our diverse community, and we believe that a more diverse law firm is a better law firm,” O’Connor stated in a news release. “At this pivotal moment in our country, each of us might ask, ‘What can I do to make a difference?’ And I am thrilled at the opportunity to lead the DEIC and help make a difference at Stoel Rives.”

The firm has also encouraged the formation of workplace affinity groups, such as Lawyers of Color, Associates of Color, Women at Stoel Rives, and Q, for LGBTQ+ attorneys.

“Karen has demonstrated clear leadership that has strengthened the committee’s role at Stoel and has been an important voice in helping us focus on best practices to foster an environment in which diverse talent can thrive at the firm,” Melissa Jones, Stoel Rives’ managing partner, stated in a news release.

Pearce is a founding member of the firm’s Associates of Color affinity group and has been a member of the DEIC since 2018.

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Real estate investors grappling with tax law changes

Chuck Slothower — Tue, 19 Mar 2019 21:10:43 +0000

Opportunity zones may have been the most-discussed federal tax change for developers and property owners in the past two years, but changes to various deductions and treatments of pass-through entities also have caught interest.

The changes stem from the Tax Cuts and Jobs Act, which was signed into law by President Trump in December 2017. Lawyers and real estate investors are still working to untangle the provisions and apply them to their investments and income.

“This is the first year in which people are filing tax returns and finding out what it really means in terms of the bottom line,” said Kevin Pearson, a partner and tax lawyer at Stoel Rives in Portland.

Bonus depreciation has allowed property owners to expense 100 percent of a property’s cost and deduct it the first year the property is placed into service. The bonus depreciation applies to properties placed into service through 2022. Bonus depreciation “has been meaningful to people,” Pearson said.

“Bonus depreciation is one of those that Congress believes spurs investment,” he said. “I’m not sure it does, but people take advantage of that.”

The change in tax law is temporary, but Congress may choose to extend it. It is one of many maneuvers enabled by the 2017 tax law. The legislation has kept lawyers busy in applying some confusing and poorly written sections to their clients’ situations.

“This act was written so fast and so hastily that it’s an absolute mess,” said Mark LeRoux, a partner and tax lawyer at Tonkon Torp. “The drafting is horrible. There are cross-references to sections that don’t exist.”

The legislation made deductions of business-related meals more difficult, and eliminated deductions for business entertainment in most circumstances. That’s made it impossible to deduct golf rounds or suites at sports stadiums from federal taxes as business entertainment.

Companies organized as C corporations saw their income tax rate fall to 21 percent. That has primarily benefited large corporations such as Nike and Intel; public companies are often organized as C corporations.

“That mostly helps bigger, more established companies that are C corps,” Pearson said.

The legislation also lowered taxes for pass-through entities such as limited liability companies. Developers and investors often use LLCs as entities that own real estate.

Other changes affected Oregonians’ personal taxes. A $10,000 limit on state and local tax deductions from federal tax has hit taxpayers in relatively high-tax states such as Oregon. On the positive side of the ledger, fewer people are now subject to the alternative minimum tax. The tax was meant to limit the use of loopholes to avoid paying taxes.

“The alternative minimum tax got friendlier,” LeRoux said.

Another change in tax law allows taxpayers to deduct up to 20 percent of qualified business income from sole proprietorships, partnerships or S corporations, among other entities.

That provision has led many parties to change partnership structures in which beneficiaries received guaranteed payments, similar to a salary, to a share of profits instead.

“A lot of people are rewriting their LLC agreements,” LeRoux said.

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Developer steps up at Centennial Mills

Chuck Slothower — Mon, 25 Jun 2018 17:57:45 +0000

San Antonio-based developer Lynd Opportunity Partners is teaming with SERA Architects and Mayer/Reed on the redevelopment of the Centennial Mills site in Northwest Portland. (Sam Tenney/91��Ƶ)

The latest developer seeking to transform Centennial Mills greeted Pearl District neighbors last week, offering to listen to local residents but volunteering few details about their plans for the historic riverfront site in Northwest Portland.

Lynd Opportunity Partners, a major developer based in San Antonio, was selected in April to enter into exclusive negotiation with Prosper Portland for the 4.4-acre property.

Lynd executives introduced their project team, including SERA Architects, landscape architect Mayer/Reed and heavy-hitting law firm Stoel Rives.

Members of the project team said the number of buildings and their heights, uses and configuration were to be determined.

“This is a large parcel and it could potentially support three to four buildings on it,” SERA principal Kurt Schultz said.

The project team plans to undergo a voluntary Central City master plan through the city of Portland.

“We think that’s the best way to move forward,” Schultz said. “It takes more time, but we think that’s the right move for the city of Portland.”

Each building would go through a separate design review process.

Schultz pledged there would be affordable housing on the site. “The only thing that I can guarantee you will be on the site is affordable housing,” he said.

The site will also have a “large amount of public open space,” Schultz said.

Lynd is a major player in the national multifamily market, with 35,000 units in 50 metropolitan areas. The company is privately held by founder Michael Lynd Sr.

“We’ve been successful in every market we’ve been in, and it’s because we pay attention to what the consumer wants,” said Scott Brymer, Lynd’s president of development.

Brymer pointed to the riverfront views as a key selling point for whatever is eventually built on the site. “That sells condominiums, that sells apartments, that sells any retail experience that might be there,” he said.

“They’re not making any more land on the Willamette River,” Brymer said. “We have a tremendous opportunity to do it right.”

Questioned about Lynd’s record, Brymer pointed to ENV, a luxury apartment tower the company built in Chicago that sold for a record price on a per-square-foot basis in that market.

Lynd is the latest developer to try a hand at bringing new life to Centennial Mills. Jordan Schnitzer explored developing the site in 2015-16 but could not come to an agreement with city officials. Prosper Portland, then known as the Portland Development Commission, settled a lawsuit in 2012 with developer LAB Holding of Costa Mesa, California, after plans for the site shifted. At different times, Venerable Properties and Intrinsic Ventures also evaluated the possibilities at Centennial Mills.

“I do think it is different this time for a number of reasons,” Will Thier, Prosper Portland’s project manager for Centennial Mills, said in an interview. “First of all we have a great deal of clarity from our elected officials and from the bureau directors in terms of what the priorities are on the site and what resources are or are not available. In the past, there was not always perfect clarity on some of those items. That additional clarity provides a lot more certainty for the developer in terms of how they approach the site.”

Last year, the City Council endorsed a plan for a full-site redevelopment that precluded the Police Bureau’s mounted patrol from returning to the site. Commissioners also directed Prosper Portland to prioritize affordable housing.

The site has seen its share of challenges, including flooding and environmental contamination. Two historic structures, the 1910 flour mill and the 1926 feed mill, have complicated plans. The feed mill has been demolished as part of Prosper Portland’s clean-up of the site; the flour mill is expected to be preserved.

Neighbors have sought to maintain access to the Greenway Trail that runs by the site. Some have also argued for low-slung buildings on the site that wouldn’t interfere with views of nearby condo owners.

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Construction attorney sued by project owner

Garrett Andrews — Tue, 20 Sep 2016 22:12:59 +0000

The owner of a Northeast Portland duplex developed and built by construction attorney Phillip Joseph is suing to recover sale costs over construction defects. (Sam Tenney/91��Ƶ)

A Portland construction attorney penalized for developing a project without a developer’s license is now being sued by the project’s owner to rescind the sale.

Ball Janik LLP partner Phillip Joseph is accused of performing shoddy construction work and misrepresenting key building specifications for a duplex project he developed at 5404 N.E. 15th Place in Portland. The owner, Ann N. Mitchell, is seeking to recover $615,000 she paid to cover the sale and associated costs.

According to the suit filed Sept. 1 in Multnomah Circuit Court, Mitchell bought the townhouse development in March 2015, with the sale closing the next month. The contract included a one-year warranty with the builder, Bridge City Construction. Several months later, Mitchell��claims she started noticing numerous issues with the interior and exterior finishes. After notifying Joseph and Bridge City, she says eight months passed with only minimal steps taken to remedy the defects.

The complaint states a inspection by a forensic architect turned up additional issues, including an improperly installed fireplace, insufficient ventilation in the attic and difficulty closing and latching doors – including the front door.

Mitchell filed a breach of contract complaint with the Oregon Construction Contractors Board to force repairs. But the CCB can only investigate CCB-licensed entities. Though Joseph himself is CCB-licensed, and so is Bridge City Construction, the sole-purpose entity he created to sell the property – 14th Place LLC – was not. So in July, Joseph was fined by the CCB for not having the appropriate licenses when he developed the project.

Joseph told the 91��Ƶ last month that he didn’t know his LLC also needed a CCB license. He called the rule redundant and “silly.”

A CCB enforcement manager said the rule has been on the books for years.

Joseph, through his attorney, Jim McDermott of Ball Janik, issued the following statement: “We believe that there is no factual or legal basis for Ms. Mitchell’s premature and unfounded lawsuit.”

Mitchell’s attorney, W. Cory Haller of Stoel Rives LLP, declined to comment.

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Stoel Rives settles in at Park Avenue West

Chuck Slothower — Mon, 13 Jun 2016 20:04:27 +0000

Stoel Rives has moved into its new office at Park Avenue West. The ZGF Architects-designed space encompasses nine floors and measures 121,000 square feet. (Sam Tenney/91��Ƶ)

Editor’s note: To see more photos of Stoel Rives’ new office, click here.

Stoel Rives gets top billing at Park Avenue West.

Portland’s largest law firm occupies the top nine floors of the downtown mixed-use tower that was developed by TMT Development, designed by TVA Architects and built by Hoffman Construction.

Stoel Rives’ business development manager, Jackie McClue, earlier this week led a tour of the firm’s new space.

Originally, condominiums were planned for Park Avenue West’s top floors. But the design was flipped during development, and the condos were placed below the law offices.

The offices are smaller than Stoel Rives’ former offices at the Standard Insurance Center, at 900 S.W. Fifth Ave. Stoel Rives is using only about 121,000 square feet, down from more than 140,000 square feet at the Standard Insurance Center. (The firm is subleasing a portion of one floor, amounting to 10,000 square feet, to another user.)

“People are really more focused on the quality of the space than the size of their new offices versus their old offices,” said Wally Van Valkenburg, managing partner of Stoel Rives’ Portland office. “We wanted to make more efficient use of our space.”

Stoel Rives may be leasing less space, but it’s paying more per square foot. The firm signed a 15½-year lease at Park Avenue West.

In another change, the offices for Stoel Rives partners and associates are more comparably sized than they were in the Standard Insurance Center. Stoel Rives has 126 attorneys and 209 staff members working in Park Avenue West, at 760 S.W. Ninth Ave. The firm has offices in 10 other cities.

Park Avenue West is poised to soon receive a Leadership in Energy & Environmental Design platinum rating. The building uses 425 gallons of rainwater a day for non-potable uses such as flushing toilets.

The interior reflects Northwest motifs in its use of Oregon white oak flooring and Douglas fir paneling and doors. ZGF Architects designed Stoel Rives’ tenant improvements.

The space is clearly a law office, not a tech startup. There are no arcade games, ping-pong tables or beanbag chairs as one might see in some of Portland’s creative office spaces.

Stoel Rives does have collaborative spaces featuring high-backed couches and tables where lawyers gather to practice trial arguments. Lawyers adorn their offices with everything from hunting trophies – Eugene A. Frassetto, a partner, has a bust of a six-point elk he bagged in Malheur County – to Trail Blazers memorabilia.

Two of the firm’s floors in Park Avenue West hold conference space.

Stoel Rives downsized its library for the move. The firm unloaded 85 percent of its bound volumes, which were donated to prisons and county libraries or recycled.

“What remains is primarily resources that aren’t easily accessible online, don’t work well online or have some connection to the history of Stoel Rives,” said Shannon Marich, knowledge and research services manager.

The firm set aside wellness rooms for new mothers on the 25th and 28th floors.

Stoel Rives moved during Memorial Day weekend, and reopened May 31. The firm also used the opportunity to rebrand with a fresh logo.

The views provided by several outdoor terraces range from the St. Johns Bridge to Mount Hood and Mount St. Helens. The West Hills loom close by, while all of downtown Portland stretches out below.

Stoel Rives asked the architects to include covered outdoor spaces.

Mark Houk, Stoel Rives’ business development technology manager, said he enjoys stepping outside.

“I just get away when I need to step away from the computer,” he said. “I’ve never seen Portland from this vantage before.”

The move was only Stoel Rives’ fourth in its history. The firm was founded in 1907 in Portland.

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Photos: A look inside Stoel Rives’ new office

Sam Tenney — Mon, 13 Jun 2016 20:03:24 +0000

Stoel Rives, Portland’s largest law firm, has moved into a new nine-floor office at Park Avenue West. The 121,000-square-foot tenant improvement was designed by ZGF Architects and built by Lease Crutcher Lewis.

The main lobby features an east-facing, two-story atrium with views of the Willamette River and Mt. Hood.

Two of the firm’s nine floors are comprised almost entirely of conference room space.

The office has mutliple collaborative spaces (pictured at left) which can be used for meetings and brainstorming sessions between attorneys.

Reclaimed wood was used for the ceiling of the main break room.

The firm’s law library was significantly downsized before the move, freeing up valuable square footage.

Parts of the patio spaces are shielded from the elements with glass walls and can be warmed with space heaters, allowing for outdoor events and meetings in cold and wet weather.

Partner Eugene A. Frassetto works in his office among framed degrees, artwork, and “Elvis,” a six-point elk he bagged in Malheur County, waiting to be mounted on the walls.

A deck on the north side of the building offers views of the Pearl District and Fremont Bridge.

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