November 08, 2019
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Portland denies obstructing failed Midtown development

Troy R. Bennett | BDN
Troy R. Bennett | BDN
The sun sets over Portland's Bayside neighborhood in this May 17, 2018, file photo.

Portland officials said they deny obstruction charges in a developer’s lawsuit about a failed project in the city’s Bayside neighborhood.

The Portland Press Herald reports the city is still reviewing the 78-page complaint filed Friday in U.S. District Court in Portland, but a spokesperson said Portland “steadfastly denies all of the claims” asserted in it.

The lawsuit, filed by Florida-based Federated Cos., concerns a development called the Midtown project that would have brought 450 housing units and almost 100,000 square feet of retail space to a neighborhood just outside Portland’s downtown.

The complaint accuses the city of failure to abide by relevant contractual obligations, failure to pay “sums rightfully due under said agreements” and denial of Federated’s building permit application, among other charges.

In the court document, Federated Cos. said it “spent nearly a decade and millions upon millions of dollars in vain developing and pursuing plans for a vibrant mixed-use development project” consistent Portland’s comprehensive plan for the Bayside neighborhood.

The first phase of the project was approved by the Portland Planning Board in January 2014, but Federated Cos. scaled back the development later that year after opponents filed a lawsuit in Cumberland County Superior Court to block it. The Planning Board approved the revised proposal at a meeting in March 2015.

But “[a]s the project shrunk in size, the City’s support for it correspondingly lessened, and the

temper of the City’s interactions with Federated noticeably changed,” the complaint reads.

“In what would become a significantly detrimental pattern of ‘bait and switch’ … the City ultimately abandoned Federated, its longstanding partner, and left the developer in the lurch,” the complaint reads.

The complaint alleges that the city inflicted millions of dollars of damage upon the developer
“through its years-long pattern of imprudence and obstruction. … The results have been nothing short of catastrophic for Federated and, equally and unfortunately, the public at large.”

The Press Herald reports that the developer waited until February 2018 to file for a building permit to begin construction of the first phase of the project. But the city denied the building permit after Federated allegedly failed to pay more than $80,000 in traffic mitigation and other costs and did not post a required performance guarantee, the Portland newspaper reports.

The complaint asks for breach-of-contract damages exceeding $75,000, as well as attorneys fees and other costs, but a spokeswoman for the developer told the Press Herald that its actual damages are estimated to be in the “eight figures.”

BDN writer Christopher Burns contributed to this report.

 



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