PORTLAND, Ore. — The old Gordon’s Fireplace Shop building in Northeast Portland is scheduled to go on the auction block Sept. 30, but the foreclosure sale could be halted if the property owners file for bankruptcy.
The historic structure, overlooking Interstate 84, has become an eyesore in recent years with its broken windows and graffiti. The building has been vacant since 2016.
In June, the Portland city council voted to foreclose on the property. The building’s owners owe the city roughly $150,000 in liens for code enforcement violations.
The public auction is scheduled to take place at the Portland Building at noon on Sept. 30. Anyone can buy the Gordon’s Fireplace building, although the minimum bid is $500,000 and the winning bidder’s payment must be made in full the same day.
Real estate holding companies 3300 NE Broadway and Grant Park Parking, which own the site, can keep the property by paying off roughly $90,000 in delinquent liens before the foreclosure sale. They can also regain possession after the auction by paying off outstanding bills within three months.
“Right now, I’m refusing to pay off the liens,” said Bill Joyce, hired by the property owners in early September to oversee the project.
Joyce said he’s working to improve the property and hopes the city will postpone the Sept. 30 foreclosure sale. If it doesn’t, the building’s owners may put the companies that own the property into bankruptcy — pausing the sale.
“It really just gives companies time to come up with a plan, effect the plan and get approval of the plan or, if the numbers don’t work, just liquidate,” explained Joyce.
Joyce said he’s considering litigation against the city for fines and penalties associated with the Gordon’s Fireplace building. He’s also looking at suing others for not maintaining the area around the building.
On Aug. 28, PNC Bank sued 3300 NE Broadway, Grant Park Parking and other developers for allegedly defaulting on their loan for the site. As of July, the lawsuit alleged the property owners owed nearly $5 million to lenders.
The historic building at 3312 NE Broadway was purchased in 2017 with plans to create office space and retail. But after the pandemic hit, developers re-evaluated to focus on a residential project with 18 loft-style units and ground-level retail. The developer blamed bureaucracy and escalating construction costs for delaying the project.
In the past few years the property has fallen into disrepair, generating complaints from neighbors about broken windows, falling glass and graffiti.
City records indicate the building was constructed in 1918 as a workshop for house parts, although an August 1917 article in The Oregonian suggested it may have been earlier. The newspaper described how workers built wooden airplane parts in the brick building, which would later be referred to as the Aircraft Factory.
Over time, the building became a furniture store, then home to Gordon’s Fireplace Shop for more than 60 years until it closed in 2016.
“My guess is that it is not developable in the near future or even in the medium-term future. So, we may be looking at five or 10 years of abandonment,” said Gerard Mildner, professor emeritus of real estate and finance at Portland State University.
Mildner explained the three-story structure is challenging for redevelopment because of its odd shape, historic designation and a lack of underground parking.
“Probably its best use over the next ten years is going to be as a surface parking lot,” Mildner predicted. “I cannot imagine somebody, in the current economic environment for offices, converting it to office. And there are a lot of limitations on trying to develop it as apartments.”
The Gordon’s Fireplace building is one of ten blighted properties being sold at the public auction on Sept. 30. The others include the site of a warehouse fire along the northern bank of the Willamette River, a decrepit old building on Northeast Alberta and several homes in disrepair — facing thousands of dollars in delinquent liens.