The developer of a long-delayed apartment complex has asked the city for a permit to build an eight story parking garage in Portland’s West Bayside.

It’s the first formal step by the Florida-based Federated Cos. toward actual construction of the so-called Midtown project, an estimated $85 million housing and retail development on Somerset Street that was approved three years ago. But the project’s fate is still not clear, in part because the city’s site plan approvals are set to expire next month if the project is not underway by then.

The parking garage at 59 Somerset St. is part of an ambitious proposal to build 445 apartments with ground-floor retail on a vacant 3.5-acre parcel that Federated purchased from the city for $2.3 million last year.

The parking garage, which would have retail on the first floor, is estimated to cost nearly $12 million. The garage will be mostly funded by an $8.2 million loan from the U.S. Department of Housing and Urban Development. As of last June, taxpayers had paid $177,000 in interest on that loan while waiting for the project to move forward. The city had hoped to cover the interest costs with additional tax money from the new development.

City officials could not provide an updated figure on the amount of interest paid by the city, and City Hall Communications Director Jessica Grondin said planning staff was not available for interview Tuesday afternoon.

The Midtown project also includes three six-story residential buildings with ground-floor retail, although a representative of the Federated Cos. said in a Jan. 30 email to planners that the parking garage was the first step in moving forward.

“It is a single-phase approval, but we will be sequencing the construction (in a continuous build out) beginning with the parking facility presently being applied for,” Patrick Venne wrote in the email.

The project once was anticipated to be a major turning point for the Bayside neighborhood, a former industrial area between downtown and Interstate 295 that is home to a high concentration of social services and has struggled to attract and retain year-round residents. It was in line to be one of the city’s first post-recession developments, but has since languished as dozens of other apartment and condo projects with hundreds of units have been approved and built in the city.

City officials had previously announced that the project would break ground by the end of 2015 and Federated’s website indicates the project was expected to be completed by December 2016.

Laura Cannon, vice president of the Bayside Neighborhood Association, said much of the neighborhood’s excitement has turned into fatigue and resignation. Cannon greeted news that Federated had applied for a building permit on Feb. 1 with a rhetorical shrug.

“It’s a positive step, but we wish it was a much bigger step and we wish it would have happened two or three years ago,” she said. “I can’t put a positive spin on it because it’s so underwhelming. It’s step one of a process that should be finished by now.”

Venne said in an email to city planners that Federated Cos. had previously submitted the application last year, but did not move forward. No reasons were given and Venne declined to be interviewed when reached by phone, saying, “We’re not discussing the project.”

The city’s site plan approvals will expire on March 24 if the project doesn’t get underway by then, meaning the city will need to act quickly on Federated’s application for a building permit. If the previous approvals expire, Federated would have go through the planning process again.

Although Venne said in his email he is still working with the city to produce mandatory construction management plan and fee schedule, he asked the city to begin reviewing the application, because of the impending deadline. A 2006 memo from city planners to Venne outlined $61,000 in payments for nearby road projects and a $13,200 payment for street trees.

“My hope is that your review will nevertheless commence before that time since the construction plan will need to be reviewed by several departments, and I would like to avoid any unnecessary delay since our site plan and subdivision approvals expire in March,” Venne said.

Midtown has been tangled up in controversies and lawsuits over its original height and scale and more recent request by the developer to convert some of the housing into a hotel.

The city began working with Federated in 2011. But it wasn’t until January 2014 that the company received planning approvals for four, 165-foot towers with up to 800 housing units and a 705-vehicle garage. A group called Keep Portland Livable filed a lawsuit, challenging those approvals, and Federated chose to scale down its proposal to address concerns. It’s new plans were approved in March 2015.

The following year, Federated began marketing the residential portion of the project for sale to another development company. At the time, the company said it was not unusual for that to occur with a sizable project like Midtown.

The original land sale agreement with the city included a time line for Federated to begin the project, but that was removed before the sale was finalized in June of 2016 because city officials believed the developer was fully invested in the project.

Now Federated is only obligated to build the 840-vehicle parking garage, 180 housing units and 50,000 square feet of retail within three years of drawing down $1 million of the federal funding for the garage.

Grondin said Federated has drawn down “just under $1 million to cover project soft costs,” meaning it still under no obligation to the city to start construction.

Randy Billings can be contacted at 791-6346 or at:

rbillings@pressherald.com

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