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Costs, private ownership create barriers to using empty retail spaces as homeless shelters

Local leaders say they do consider and use vacant retail sites to house people who are homeless, but there are often roadblocks to making it a feasible solution.

PORTLAND, Ore. — Amid Portland’s mounting housing crisis, city and county officials have made it clear that finding properties and pieces of land for shelters and sanctioned villages is a lengthy, painstaking process lined with bureaucratic red tape and neighborhood pushback. According to Commissioner Dan Ryan, it’s why the deadline for opening six Safe Rest Villages across the city has been pushed back from the end of 2021 to the following year, the latest of multiple setbacks.

For months now, dozens of KGW viewers have written to The Story asking why officials don't just convert long-closed big box stores into shelters for the city's growing houseless community.

One viewer named Dottie emailed to ask, “Has anyone suggested the former Kmart location at 122nd and Sandy Boulevard? It is a very large site with a huge parking area, where RVs could locate.”

KGW took questions about the general concept of converting empty, large retail space into shelters and housing to local officials.

“Yeah, we’ve definitely heard this question. People see buildings, they see spaces. They hope and wonder if they're going to be useful or suitable,” said Denis Theriault, spokesman for the city and county’s Joint Office of Homeless Services. “People want to offer up solutions. They want to be part of that. And it's a really good instinct, and I don't want to discourage it.”

Theriault added officials not only consider vacant retail sites — they use them, when it's feasible.

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Earlier this week, KGW covered the opening of the Arbor Lodge winter shelter, which, for the next five months, will provide 24-hour temporary housing for up to 70 people. That building at North Denver Avenue and Lombard Street, Theriault pointed out, is a converted Rite Aid. The city and county purchased it for $2.6 million dollars, using CARES Act funding and general funds allocated previously for shelter development.

The city and county also converted a former grocery store at SE 61st and Foster into a permanent shelter that opened in 2019. Known now as the Laurelwood Center, it houses roughly 120 people.

Still, The Story viewers point out, properties like the abandoned Kmart are much bigger and could hold more people. That property in particular is so void of traffic, the city directed opposing protest groups to its parking lot to clash and fight without risking injury to innocent bystanders in August 2021.

So, could the old Kmart, specifically, be utilized as a shelter?

KGW dug into property records, starting with a simple search on portlandmaps.com. It shows the owner is "RFC JOINT VENTURE & HFK REALTY PART." The owner's address is listed as the same address of the Kmart. A search of Secretary of State’s records and facility permits trace ownership of that company to a New Jersey-based developer. KGW reached out to the company Thursday about plans for the facility, but we have not heard back. City records show the owners have filed paperwork seeking a permit to demolish the site.

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During a taping of Straight Talk with Laural Porter, Housing Commissioner Dan Ryan addressed the questions he’s also faced about that large, empty box store and others like it.

“I can tell folks that those [large box stores] usually have owners many times that don't live in Portland. And an attorney in the East Coast looks at that proposition not so kindly,” Commissioner Ryan said. “What looks simple to the average eyeball … we have to dig in and then find out if it's legally possible.”

Commissioner Ryan added the biggest barrier, aside from willingness among private owners to sell properties for use as shelters or villages, is cost. The market value of that abandoned Kmart is currently listed as $5.9 million, more than twice the price of the old Rite Aid.

Theriault shared that sentiment and added large retail or warehouse sites often come with major renovation needs. They lack bathrooms, showers and kitchens, he said, and opening sites without basic amenities makes it all the more likely people living on Portland’s streets will refuse to go inside.

“Spaces still have to be humane spaces. They have to be the right space for people. It’s not enough to put someone in a warehouse. That’s real, and that means something,” he said.