Wapato is a 155,400-square foot, minimum-security detention center dedicated in July 2004. The facility has never been used as a jail and has largely remained vacant since its completion. This page is designed to address the history and steps Multnomah County has taken to manage this legacy issue.
Why was Wapato built and then never used?
Wapato was envisioned by Multnomah County voters who in 1996 approved a $46 million bond measure to build a local jail in North Portland. Another $12 million was secured through a state of Oregon financing program. Voters were responding to an upsurge in drug possession and sale arrests in Portland, coupled with an underfunded public safety system and population growth.
Almost every step beyond that was contentious. The County originally planned to build a 510-bed jail that would included 300 alcohol and drug beds. Nearly 100 public meetings were held over the location, with the top finalist being a 90-acre wetland in the Kenton neighborhood as Sheriff Dan Noelle wanted space where up to 2,000 beds could eventually be built. After neighborhood outcry over the wetlands, the final choice was a much smaller plot in the center of a heavily industrial property owned by the Port of Portland. The Port agreed to sell the land as long as no prisoners would be released from the site and that people transported to and from the jail were in custody. And after a prolonged fight between Sheriff Noelle, and the Board of Commissioners and Department of Community Justice over the treatment beds, a 525-bed jail was built without them.
Meanwhile, ballot initiatives designed to limit property taxes that were approved by voters in 1996 and 1997 limited the county’s ability to raise the funds needed to run the jail. The dedication ceremony on July 17, 2004 before the completed $58.4 million facility offered little reason to celebrate. A new sheriff, Bernie Giusto, acknowledged they had just built a jail they could not afford to operate. He estimated it would take up to $10 million to house inmates and pay employees, but just $300,000 to maintain closed.
With no means to open the jail, in 2005, the Board of County Commissioners approved Resolution 05-065 to look for other uses or tenants. That launched nearly a decade of Multnomah County pursuing talks with the state of Oregon and other counties about whether they needed a jail.
Meanwhile, crime rates in all jurisdictions began to go down -- and stay down. In addition, Multnomah County began focusing on crime prevention and other evidence-based strategies to reduce crime and recidivism. Simply put, no one had the money or interest to run Wapato as a jail.
Why didn’t the county just sell Wapato at that time?
Because the jail was built with tax-exempt bonds, the county could not sell to a private owner until county bonds were paid off Oct. 1, 2016, and the state bonds reached a permissible level. In 2013, the Oregon Legislature approved a measure to allow the county to issue a long-term lease to a private entity. In 2014, in anticipation of the bonds maturing, the county issued a request for interest to repurpose and sell Wapato. County Chair Deborah Kafoury, in her 2015 State of the County address, reiterated that Wapato was for lease or sale. The county continued to meet with state officials, including the Governor's Office, to shop the property. Despite the efforts, no viable offers resulted.
Why not use Wapato as a homeless services shelter?
Land use restrictions by the city of Portland and the state, as well as deed restrictions, currently prohibit using Wapato as a homeless shelter.
The Wapato site is zoned Heavy Industrial in the Aircraft Landing overlay zone, one of three zones designated as an industrial sanctuary in the Portland Comprehensive Plan. Uses permitted outright include vehicle repair, self-storage, manufacturing and production, warehouse and freight movement, wholesale sales, and industrial services.
Initially -- a position later overturned by the Land Use Board of Appeals -- some community services uses, including short-term housing, some types of group living or a mass shelter, could have been allowed with a conditional use permit. Other conditional uses include household living, offices, retail sales and detention facilities. Group living uses that include programs for psychiatric, drug or alcohol problems, were not permitted.
But in September, 2016, the Land Use Board of Appeals issued an opinion on land use prohibitions on siting homeless shelters on industrial lands. In short, the opinion states that Portland's code prohibits mass shelters on industrial lands. A shelter could be labeled a "mass shelter," "short term housing," or "group living," all of which are expressly prohibited in the city's industrial zones. PCC 33.140.100, Table 140-1. (These terms are defined in PCC 33.910.030).
In addition, a Port of Portland Warranty Deed with covenants also requires that the property be maintained as an industrial zone. The covenant also required that the county approach the Port first about its intent to sell. On Aug. 29, 2016, the county notified the Port of its intent to sell Wapato. On Sept. 2, 2016, the Port responded it was not interested in buying the property.
On Sept. 22, 2016, at a hearing before the Board of County Commissioners, assistant county attorney Jed Tompkins reminded the board, that the city of Portland and Metro had both identified the Wapato site as a industrial zone and that the Portland City Council would "not necessarily have the final say" in any decisions that changed that designation. "There's a big caveat here. The state agency, the Land Conservation and Development Commission, has authority to review and even alter city council decisions approving this change in use. As always, any interested party will have the right to appeal these decisions, and what then we're talking about going to the Court of Appeals and back up and down the ladder however many times this will take. The take-home message: there is a fair amount of inherent uncertainty in resolving this zoning piece.''
The 2016 Valuation Summary concluded that, "Given the legally permissible, physically possible, and maximally productive uses of the property, it is our conclusion the highest and best use of the property, as improved, would be for the conversion of the facility to some type of industrial manufacturing or warehouse use."Facilities costs, concerns about people experiencing homelessness
The Department of County Assets in January 2016 issued a report that found it would take at least $5 million to bring Wapato back into shape a fully functioning jail. This is largely due to equipment being moved to other jail facilities, and deferred maintenance.
It would take an estimated $950,000 and an ongoing $140,000 in utilities a month ($1.68 million a year), including the hiring of five new full-time employees at the site, to open for other uses. This includes ensuring working lights, plumbing, heating and Internet services, in addition to ongoing maintenance and the expectation that, over time, outdated systems would need to be replaced as they fail. This includes HVAC and other systems. Other issues include poor to no cell service, no Internet connectivity or wifi, hardware issues, and not being accessible under the Americans With Disabilities Act. Dorm doors, for instance, weigh 300 pounds apiece and have access by stairs only.
In a Sept. 22, 2016, hearing, homeless services providers told county commissioners that people who are experiencing homelessness have children, need access to mental health and medical providers, participate in recovery groups, and often are working. Wapato is 11 miles from central Portland and 22 miles from Gresham. The cost to transport people back and forth would either come out of the budgets of struggling nonprofits or the pockets of the people themselves. In addition, providers say people want to live near their schools, providers, clinics and jobs. Unlike a jail, people cannot be compelled to enter or stay in a shelter.
What is happening?
In 2017, the county retained CBRE real estate services to market surplus properties. CBRE began marketing the property in August with an Oct. 20 deadline for offers. After receiving six proposals, the county selected one. Chair Kafoury signed a letter of intent with Kehoe Associates Northwest to conduct due diligence. Details of the letter of intent remain confidential while the buyer performs due diligence. The Board of County Commissioners must approve any final purchase in a public meeting.
Commissioners approve $10.8 million dollar agreement to sell
On Nov. 9, 2017, 12 years after the Multnomah County Board of Commissioners first voted to find a new owner or use for the Wapato Detention Facility, the current Board approved a purchase and sales agreement to sell the property for $10.8 million -- and dedicate the proceeds to affordable housing.
The resolution, approved 4-1, declares the property surplus and gives Kehoe Northwest Properties, LLC, of Portland two days to put down $200,000 earnest money, and $300,000 by Jan. 8., 2018. The county and Kehoe Northwest Properties now have 60 days to complete the deal, with an option to extend that period 30 days. Wapato was appraised as an industrial building for $8.5 million in 2014.
“This is a lot better than letting the building sit vacant, gobbling up operating dollars that can be spent on truly needed priorities like housing and mental health services,” Chair Deborah Kafoury said. “We can’t change the fact that decades ago Multnomah County made a terrible mistake and built a jail we don’t need. But what we can do is ensure it doesn’t happen again.”
But the Board went even further. In a 5-0 vote, commissioners directed all proceeds from the sale to support a pledge to add deeply affordable housing with wraparound services attached. The county, the city of Portland and Home Forward all committed this fall to work with community partners to create 2,000 new units of supportive housing over the next 10 years.
Commissioner Lori Stegmann, who supported the sale and sponsored the resolution directing Wapato proceeds, said it’s important to focus precious county resources on long-term priorities that can address the region’s homelessness crisis.
What happened to the Kehoe offer?
On Feb. 7, 2018, Kehoe Northwest Properties LLC exercised an option to amend the purchase and sale agreement. This amendment extended the due diligence period to March 26 so the developer could complete further economic evaluation. On Friday, March 23, attorneys for Kehoe Northwest Properties LLC delivered a proposed counter offer that was materially different from the original price.
Chair Deborah Kafoury scheduled an executive session on Tuesday, April 3, 2018 for the Board of County Commissioners to hear the details of the counter offer and deliberate. No final decision was made at the executive session.
On Thursday, April 12, 2018, the Multnomah County Board of Commissioners voted 4-1 to sell the Wapato Jail to Kehoe Northwest Properties LLC for $5 million.
Developer Marty Kehoe had offered $10.8 million for the unused jail and surrounding property in November 2017. But after more than three months of due diligence and engineering, he returned with an offer of $5 million on March 23.
The County counter-offered with an amendment that would require Kehoe to immediately surrender $200,000 in earnest money and close the deal before 5 p.m. on Friday, April 20.
Kehoe agreed, and after an intense discussion about using Wapato as a homeless shelter, the Board voted to approve the deal.