Owner of SE Portland buildings sues city, county over new homeless shelter

PORTLAND Ore. (KPTV) - Neighboring businesses near a SE Portland warehouse-turned-homeless shelter are suing the city and Multnomah County, alleging that the site was quietly – and unlawfully -- selected for a permanent homeless shelter in the city’s Central Eastside District.

The lawsuit --filed Tuesday, on behalf of a handful of LLCs with nearby buildings and construction projects--accuses city and county officials with the Joint Office for Homeless Services of skirting the public notification and approval process for the location at 120 SE Market Street and ignoring zoning laws to push it through.

The LLCs represent a group of companies that own the ‘Electric Blocks,’ a collection of commercial buildings comprising mostly of office spaces that are all owned by Killian Pacific.

According to the lawsuit, the businesses argue that sheltering homeless people in an industrial area would be dangerous and harmful for residents because of its proximity to a railroad and “ongoing construction with heavy machinery” in the area.

The lawsuit also claims the businesses would “irreparably harmed” by a shelter and “tenants will leave, new tenants will not come, and development of the electric blocks will stop…and cease to exist.”

The buildings, said the lawsuit, are worth no less than $130 million and Killian Pacific plans to invest $85 million more in the future development of the Highwire building.

Multnomah County officials declined to comment on the lawsuit Wednesday, citing the ongoing litigation.

Two weeks ago, a county news release mentioned the new shelter space, calling it a 125-bed shelter for women that was already previously used for emergency shelter services during bad weather over the winter.

The shelter is expected to open permanently sometime in mid-April, said a spokesman for the Joint Office for Homeless Services.

As for land-use zoning, the use of the site may hinge on House Bill 2006 which went into law in May 2021.

It allows cities and counties to disregard zoning rules for, “qualifying emergency shelters” although it’s not clear how the law would be applied in this case.

A public relations firm representing Killian Pacific said his clients were unavailable for comment or interviews Wednesday.

One other big player in the district, however, has also weighed in.

The Central Eastside Industrial Council (CEIC) – a nonprofit representing businesses and community members in the area – sent a letter to city and county leaders on Tuesday, voicing concern for what it calls a “closed-door approach” to the shelter section. The group also requested that government leaders reconsider using the warehouse as a shelter.

ECIC Board President Eric Cress declined to do an interview with Fox 12, but CEIC did send the following statement:

“The CEIC supports and recognizes the need for an additional shelter in the Central Eastside. As advocates for shelter and supportive and affordable housing, we have a history of successfully working with the city of Portland and community to identify locations for people experiencing houselessness, including the Clark Center and Jean’s Place.

However, we request the planned opening of the proposed shelter to be paused. This will allow us to discuss the merits of the site, the shelter’s potential implications to numerous surrounding businesses, and to develop a good neighbor agreement.

There has been a lack of transparency and clarity of the planned intent and use of this facility. We would welcome the opportunity to begin an open dialogue with the JOHS and community to find the best solution for our unhoused community.”

The building owner, Summit Properties Inc. is also being sued, according to the court filing.

The lawsuit said the county is leasing the building for three years with an option to purchase it after the first year of rent.

Fox 12 reached out to Mayor Ted Wheeler’s Office but did not hear back.

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