Helping Hands Reentry Outreach Centers has signed a five-year lease agreement for the former Wapato Jail building, real estate investor Jordan Schnitzer announced recently.

Schnitzer, president of Harsch Investment Properties, agreed to lease the 155,400-square-foot Bybee Lakes Hope Center for the token amount of $1 a year.

“After two years of looking for the right partner, we are now entering into a five-year lease with Helping Hands Reentry Outreach Centers to renovate and repurpose the project formerly known as Wapato,” Schnitzer stated in a news release. “Since purchasing the property in 2018, we have entertained numerous proposals from credible nonprofits to help homeless and others in need.”

Schnitzer stated that he was impressed after meeting with Helping Hands founder Alan Evans, who was homeless for 27 years before establishing the nonprofit in 2002. It’s based in Seaside, and now has 11 facilities in Multnomah, Clatsop, Yamhill and Tillamook counties.

The lease agreement is a milestone in the yearslong effort to put the never-used jail building to some useful purpose. Schnitzer had pushed for a social-service tenant, saying he would otherwise demolish the building. In October 2019, Schnitzer went so far as to unveil plans for a 314,000-square-foot warehouse. The former jail, completed in 2004, is in an industrial area dotted with fulfillment centers and other facilities.

Developer Marty Kehoe, who acquired the building from Multnomah County, sold it to Harsch for $5 million in April 2018.

The project team that will convert the jail into a shelter and reentry center was assembled by construction manager DAY CPM. Precision Construction, an affiliate of Hoffman Construction – the ex-jail’s original builder – has been selected as general contractor. Architecture and engineering services were awarded to Otak Inc.

Otak will work with VLMK Engineering + Design, Interface Engineering and Knot to provide functional architecture, way-finding and interior design.

The Bybee Lakes Hope Center will pair supportive services with transitional housing. Helping Hands will open three of the nine wings at the facility and house up to 228 beds in the first year of operation, Harsch announced. At full capacity, the center will be able to serve 525 individuals.

The post Nonprofit found to make use of former Multnomah County jail appeared first on Daily Journal of Commerce.

Real estate magnate Jordan Schnitzer will demolish the Wapato Jail in about two months, he said Thursday, unless a social service provider steps up to operate it as a homeless shelter.

Schnitzer, president of Harsch Investment Properties, held a press conference at Multnomah County‘s jail that never operated as one. He revealed his plan for the property: construction of a 314,080-square-foot warehouse called the Bybee Lake Commerce Center. It could be leased to two separate tenants as a fulfillment or manufacturing facility employing 30 to 100 people, he said. A site plan showed one tenant space of 174,720 square feet and another of 139,360 square feet.

“The industrial warehouse business is the biggest part of our real estate business,” he said.

Schnitzer in April 2018 purchased the Wapato Jail property from another developer, Marty Kehoe, shortly after he had bought it from Multnomah County for $5 million.

Schnitzer said Thursday he was ready to move on after 18 months of trying to make a shelter out of the facility. He said he’d talked with Kay Toran, president and CEO of Volunteers of America Oregon, and others about operating a shelter there.

“We still have not gotten anything in writing,” he said. “We could lease this for $1 a year; we don’t need to make a profit on this.”

Schnitzer criticized political leaders for not doing more to address homelessness.

“We need the political leadership to stand up,” he said. Current leaders, he said, “can’t be blamed for it being built … I think they’d just like to see it torn down and out of sight and out of mind.”

Schnitzer estimated taxpayers have spent $100 million building, maintaining and servicing bonds on the property since the jail was completed in 2004.

“Doesn’t it make you sick?” he said.

Demolition of the facility would cost about $1.4 million, Schnitzer said.

Multnomah County’s board of commissioners voted in April 2018 to sell the property, with only Commissioner Loretta Smith dissenting. County officials, with the exception of Smith, expressed doubt the property would ever be functional as a homeless shelter or social services center, citing its isolated location, poor transit access and steep operating expenses.

The property is also zoned for industrial use, and the state Land Use Board of Appeals ruled in a past case that Portland’s code prohibits a “mass shelter” in an industrial zone.

Multnomah County spokesman Denis Theriault stated Thursday that the county would not “throw good money after bad.”

“We’re glad that Jordan Schnitzer has reached the conclusion that he can’t afford to warehouse people in this remote jail,” Theriault stated in an email. “For us, it was never about the cost alone. Our community, our homeless service providers, business leaders like Business for a Better Portland and, most critically, people with lived experience have told us it’s the wrong building in the wrong place,” he stated.

If Schnitzer does build industrial space on the property, it will have to compete with steady delivery of industrial projects. The Portland-metro area saw 1.75 million square feet of industrial space arrive this year through September, according to Jones Lang LaSalle. Absorption was 1.3 million square feet, and the overall vacancy rate grew to 4.1 percent.

The post Demolition next for Wapato Jail, owner says appeared first on Daily Journal of Commerce.

Voters in the Portland-metro area said yes to affordable housing, overwhelmingly approving a $652.8 million bond measure.

Metro‘s bond won Tuesday with 65.6 percent of the vote. The money will be used to build or acquire affordable housing, or acquire land, in Multnomah, Washington and Clackamas counties, and the cities of Portland, Beaverton, Hillsboro and Gresham.

“The outcome (Tuesday) helps to demonstrate how the greater Portland region is interested in addressing these issues at the regional level,” Metro spokesman Nick Christensen said.

A statewide ballot measure, Measure 102, also passed, enabling public agencies to issue bonds for projects involving federal tax credits. Housing advocates said they could better leverage local dollars in concert with federal funding.

Metro will act as the aggregator of bond funds and set goals and guidelines for spending. However, individual deals will be decided by city and county agencies.

“Regionally, it’s sort of an unprecedented collaboration around housing and housing affordability,” said Sean Hubert, chief housing and strategy officer at Central City Concern, a nonprofit affordable housing developer.

The regional approach means affordable housing projects will be spread across the area, instead of each city and county taking an individual approach and perhaps leaving gaps in supply.

“It’s really groundbreaking,” REACH Community Development CEO Dan Valliere said. “It’s one of the first times nationally where you have a metropolitan-wide affordable housing measure. … It’s flexible, and we can make sure we’re developing it everywhere.”

The Metro housing bond targets deep affordability, with approximately 40 percent of the dollars set to benefit renters at 30 percent or below area median family income.

“That’s hopefully a good precedent for public policy,” Hubert said.

The sheer amount of money will help make a dent in the problem, combined with new spending flexibility, Hubert said. Measure 102 allows federal low-income tax credits – the single largest source of affordable housing subsidies – to be paired with local bond money.

The timing of the bond sale has not been determined, Christensen said.

“The biggest thing is getting the bond sale done and the best value for the region’s taxpayers,” he said.

Metro and affordable housing developers have prepared for the bond’s passage and are ready to move quickly, officials said.

“For us, it’s great because there are already a bunch of projects teed up around the region,” Valliere said. “They were kind of waiting in line. Now some of those can move quicker.”

Also on Tuesday, voters overwhelmingly approved issuing $158 million in bonds for Oregon City schools. The money will be used to relieve overcrowding by rebuilding Gardiner Middle School and remodeling Ogden Middle School, improve safety and security at schools, upgrade aging schools, and build new career and technical education facilities, according to the district.

Meanwhile election results also likely drove a stake through the idea of using the former Wapato Jail as a homeless shelter. Loretta Smith, one of the few local leaders to support the idea, was trounced by Jo Ann Hardesty, who opposed it. Gubernatorial candidate Knute Buehler, who had reportedly voiced support for fast-tracking conversion of the Wapato Jail into a shelter, also fell short in his campaign against Gov. Kate Brown.

The Bureau of Development Services last week issued a $1 million demolition permit for the Wapato Jail facility at 14355 N. Bybee Lake Court. Jordan Schnitzer, president of the property’s owner, Harsch Investment Properties, did not return a call seeking comment on his plans for the property. Schnitzer has said he intends to build storage facilities on the property if it can’t be transformed into a homeless shelter.

The post Voters boost efforts to acquire or build affordable housing appeared first on Daily Journal of Commerce.

Developer Jordan Schnitzer was having lunch at a downtown Portland seafood restaurant weeks ago when he ran into Multnomah County Commissioner Loretta Smith.

The conversation turned to the Wapato Jail, and Smith told Schnitzer a public use should be found for the long-vacant county property, Schnitzer recalled. He agreed and began to look into purchasing it himself.

Now Portland developer Marty Kehoe has sold a controlling interest in the Wapato Jail property to Schnitzer’s Harsch Investment Properties.

Schnitzer said he accepted fee title on the limited liability company controlling the property Friday. Kehoe is remaining on board the project as an adviser, Schnitzer said.

Yet, in keeping with the comedy of errors in the Wapato Jail’s history, Kehoe and Schnitzer appear to have differing visions of the property’s future.

Schnitzer said Tuesday he will meet next week with Portland developer Homer Williams, founder of the nonprofit Oregon Harbor of Hope, to discuss using the jail building as a homeless shelter with associated social services.

“If anyone can help figure this out, it’s Homer,” Schnitzer said.

But Kehoe said the property would not be used as a homeless shelter.

“All I can say is that’s not the plan,” he said. “That’s never been the plan.”

It was only last week that Kehoe completed the purchase of the Wapato Jail from Multnomah County for $5 million after he’d submitted an initial $10.8 million offer that tied up the property for months. Schnitzer said he purchased the property from Kehoe for $5 million. The two had arranged a transaction before the sale from the county closed, Schnitzer said.

“We entered into a transaction with him that if he did it, it would basically transfer with us,” Schnitzer said.

Williams was also bidding for the Wapato Jail at the time. He submitted a $7 million purchase offer that county commissioners opted not to entertain.

Now all three developers are involved in deciding Wapato’s future. Williams will have the “first shot” at finding a public use for the property, Schnitzer said.

“He is a brilliant real estate dreamer and developer,” Schnitzer said of Williams, pointing to his experience developing projects in the South Waterfront District and the Pearl District. “Now he is devoting his life, he said, to help the homeless, and I admire that. The first crack is yours.”

Schnitzer left the door open to other uses for the 18.24-acre property zoned for industrial use.

“If we can’t find a public purpose for it, we’ll try to repurpose the building for record storage or other use,” Schnitzer said. “If we can’t find a way to repurpose it, we’ll tear it down.”

Oregon’s Land Use Board of Appeals rejected a past attempt to use an industrial-zoned property as a mass shelter.

During the time Multnomah County owned the property, county officials – with the notable exception of Smith – were skeptical it could ever be used as a homeless shelter. They cited the jail’s physical layout, operating costs and distance from transportation and service agencies in Portland’s core.

In 2016, the county’s Department of County Assets evaluated the potential use of the Wapato Jail as a homeless shelter. The county report found doing so would have a start-up cost of $950,000 and ongoing costs of $140,000 a month, including the need for five full-time-equivalent staff members.

The report noted it was unknown if the building’s physical systems would perform at full operation.

County Chairwoman Deborah Kafoury did not immediately respond Tuesday to a message seeking comment.

County commissioners “did the best thing in terms of stopping the drain of dollars,” Schnitzer said. The county was paying $300,000 a year in maintenance costs.

Schnitzer said the Wapato Jail purchase is part of his family’s legacy in giving back to Portland.

“All of us, it breaks our heart to see all of these homeless folks,” he said. “It also hurts to see them on doorsteps hurting merchants who need their business to survive.”

The post At Wapato Jail, three developers vie for role appeared first on Daily Journal of Commerce.

The Wapato Jail has officially become the property of Portland developer Marty Kehoe.

Kehoe Northwest Properties has closed on the $5 million sale, with the transaction recorded and money transferred, Multnomah County officials said Thursday.

For now, the site will be leased as a warehouse, Kehoe said. However, he plans to eventually demolish the jail. The property encompasses 18.24 acres of land zoned for industrial use.

“The location was really good for a warehouse development, and getting 18 acres together at one time was a real opportunity,” he said.

The sale ends an embarrassing and wasteful chapter for the county, which built the jail. It was completed in 2004, with proceeds from a voter-approved bond backed by the sheriff at the time, Dan Noelle. The jail never opened as the county fell short of operating dollars and crime declined.

“The long saga of Wapato is over,” Deborah Kafoury, chairwoman of the county’s board of commissioners, stated in a news release. “We didn’t need it as a jail. We couldn’t afford to convert it. We couldn’t reach back into the past and recapture the money spent. But we could work with professional real estate managers to sell Wapato and get that property back on the tax rolls to bring vital revenue to serve those in our community who need us most.”

The proceeds from the sale will go toward permanent housing, county officials said.

Kehoe’s purchase proceeded even though some people advocated using the site as a homeless shelter. Developer Homer Williams‘ Oregon Harbor of Hope nonprofit submitted a $7 million offer with several contingencies.

But county officials said they had studied using the jail as a homeless shelter, and it simply wouldn’t work. The site was too expensive and too far from social services and transit. Furthermore, Oregon’s land-use board denied a previous attempt to operate a mass shelter in an industrial zone.

The county’s board of commissioners on April 12 voted 4-1 to approve the sale, with Commissioner Loretta Smith dissenting. Taxpayers were getting poor value for the property, she said.

Kehoe used a limited liability company, N. Bybee Lake Court, to complete the transaction.

The post Developer, Multnomah County complete $5M Wapato Jail sale appeared first on Daily Journal of Commerce.

Wapato Jail soon will no longer be Multnomah County‘s problem.

On Thursday, county commissioners voted to sell the 18.24-acre property to Kehoe Northwest Properties for $5 million.

The jail, completed in 2004, was never used after voters passed tax restrictions and the county fell short of money to operate it. Crime declined, and the closest the jail came to use as intended was as a set for several film and TV productions.

Developer Marty Kehoe indicated he would at first seek tenants to occupy existing space.

“We are going to lease the property out for the foreseeable future and then make long-term plans for a distribution warehouse facility,” he said. “We don’t have any tenants yet. We will use some of the warehouse for our own business purposes.”

Kehoe said he saw the transaction as a land deal, and looked to comparable land sales to arrive at his final $5 million offer.

“I told (the county) I couldn’t buy it at $10.8 million because we couldn’t repurpose the building,” he said. “Comparable land sales dictated the property was worth about $5 million.”

The jail, a 155,400-square-foot building, will eventually be demolished, Kehoe said.

“It might be three, four, five years out,” he said. “At some point to maximize the property to its full potential, the jail will have to come down.”

Kehoe has until 5 p.m. on April 20 to close the deal. He said Thursday he would “definitely close” on or before the final day.

If completed, the sale will remove an albatross from Multnomah County’s books. For years, the county has struggled to find a use for the facility. Some advocates have pushed for the jail to be used as a homeless shelter with associated services.

But some county officials, and even some advocates for the homeless, said the jail is a poor fit for a shelter. Not only would the jail be difficult to repurpose, but its location is far from social services and offers limited transportation access.

Last week, Portland developer Homer Williams and his nonprofit group, Oregon Harbor of Hope, submitted a late offer on the property for $7 million, contingent on a feasibility study. County officials gave little indication they seriously entertained Williams’ offer.

Commissioner Jessica Vega Pederson said it was time to turn the page on the jail rather than continue to entertain other offers and proposals.

“Building Wapato was a mistake,” she said. “But holding onto it any longer would also be a mistake, and that’s why I’m voting yes today.”

The county marketed the property last year via CBRE after paying off more than $100 million in local bonds. The paltry offers illustrated the property’s limited value, Pederson said.

“It’s plain and simple – this building is a jail,” she said. “There’s not much you can do to change that. The value of the property is in the land; it’s not in the jail. It’s actually worth more without the jail on it.”

Commissioner Loretta Smith strenuously objected to the sale, which she described as a “short sale,” and cast the sole vote against it.

“It is such a horrible return on investment,” she said. “The taxpayers deserve a better return.”

Smith said obstacles to use of the jail as a homeless shelter could be overcome, and she urged fellow commissioners to take another look at Williams’ offer. They were not persuaded.

“Wapato was built at a time when our community was scared and angry and thought the solution to the drug problem was a massive jail that is closer to Vancouver than it is to Portland,” Chairwoman Deborah Kafoury said.

The money from the sale, Kafoury said, will be used to support affordable housing and measures to fight homelessness.

“We didn’t have the money to run Wapato then,” she said. “We don’t have it now. And we know other approaches work better.”

The post Multnomah County agrees to sell Wapato Jail appeared first on Daily Journal of Commerce.

Wapato Jail, a lingering embarrassment for Multnomah County, could finally come off the books if the Board of Commissioners agrees to sell the property to a developer.

Commissioners are set to vote on a revised deal with developer Marty Kehoe during a meeting that will begin at 9:30 a.m. Thursday.

The county and Kehoe Northwest Properties in October entered into a letter of intent to sell the property to the company for $10.8 million. After a due-diligence period, the two sides are working on a revised deal at $5 million. If the county opts not to sell for that price, Kehoe is releasing the property back to the county, according to a letter from his attorneys to the county.

Kehoe has said he wants to turn the never-used jail into a distribution facility for medical devices. It’s not clear if that’s still the plan.

“Our representatives are still talking with the county and we’re trying to find a way to make this transaction work for all parties,” Kehoe said.

Adding intrigue is an 11^th-hour offer from Oregon Harbor of Hope, a nonprofit organization founded by developer Homer Williams. Harbor of Hope has offered $7 million to turn the property into a homeless shelter.

Williams’ offer is not up for official consideration on Thursday.

Don Mazziotti, who is working with Williams and Harbor of Hope, declined to comment on the offer. “I’m not going to go into any details of the offer,” he said. “I don’t want to prejudice the decision in the press – it’s too important.”

County Chair Deborah Kafoury has expressed skepticism that the property could be used as a homeless shelter or a hub for social services. The property is zoned for heavy industrial use, and Oregon courts have rejected shelters in industrial zones.

Wapato Jail is also far from social services used by the homeless and is difficult to get to. The nearest bus stop is more than a mile away.

The Street Roots newspaper published an editorial against using the facility as a shelter, saying “rather than segregate our homeless neighbors to a jail on the edge of town, we should continue efforts with shelters that allow people to remain in their community.”

The county has struggled to find a use for the empty jail. It was built after voters approved a $46 million bond measure in 1996. The facility was dedicated in 2004, but never opened as the county found itself short of operating funds. At the same time, crime declined.

The county had to wait until Oct. 1, 2016, when the bonds were paid off, to sell the property. CBRE marketed the listing.

Multnomah County has been eager to get rid of the property. It costs $300,000 a year to maintain the facility, according to the county.

The post County on verge of Wapato Jail sale appeared first on Daily Journal of Commerce.

Multnomah County has agreed to sell the Wapato Jail to Portland developer Marty Kehoe.

Terms of the transaction, which has not been finalized, weren’t disclosed. County Chairwoman Deborah Kafoury signed a letter of intent to sell the 18.24-acre property to Kehoe.

A medical-device distributor is interested in taking most of the 155,400-square-foot building, Kehoe said.

“My company has an interest in a medical device company, so we are considering using the majority of the warehouse for that business,” said Kehoe, founder of multifamily and commercial development firm Kehoe Northwest Properties.

The property has distinct advantages, Kehoe said.

“It’s a good location, being so close to Interstate 5,” he said. “It’s a very sizable building that has many uses allowed under the current zoning.”

The jail, at 14355 N. Bybee Lake Court in Rivergate Industrial Park, was built as a minimum-security detention center in 2004. The 525-bed jail was never used, aside from as a set for film and television productions. The money to build the jail came from a $46 million bond voters approved in 1996.

“Wapato has dogged every board and cost every taxpayer since it was completed,” Kafoury stated in a news release. “It is past time to end this debacle and get this property back on the tax rolls.”

The county received six bids for the property after it was marketed by CBRE. The purchase now enters a due-diligence period.

The post Portland developer snaps up Wapato Jail property appeared first on Daily Journal of Commerce.