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September 21, 2012 | last updated September 21, 2012 11:40 am

$9M city loan approved for 7-tower Portland project

The Federated Companies
The Federated Companies
Federated Cos. provided this sketch to the city of Portland officials as a sample of what a seven-tower mixed-use development in the city's Bayside neighborhood might look like.

The city of Portland will give around $9 million to Boston-based developer Federated Cos. as part of a seven-tower project aimed at stimulating more development in the city's Bayside neighborhood.

The Portland Press Herald reports that the deal, approved in an 8-1 vote Wednesday, will have the city take on an $8.2 million loan from the U.S. Department of Housing and Urban Development to help Federated pay for a $15 million, 700-space parking garage. The city expects to pay $2.8 million in interest on that loan.

The deal also finalized a sale agreement on the 3.25 acres off of Somerset street, at a price of $2.2 million, and stipulates that the city will have access to 200 parking garage spaces, that the project will create 40 new jobs and include 176 new housing units.

Details of the project were unveiled earlier this month after the city signed a purchase and sale agreement with Federated 14 months ago to redevelop the neighborhood's former rail- and scrapyard bordering Trader Joe's, Whole Foods Market and Planet Fitness.

The Press Herald reported that the first phase of the project — the 700-space parking garage, 41,000 square feet of ground-level commercial space and two residential towers — will take an estimated three years to complete.

A second phase, with no set timeline, calls for 250 to 268 two-bedroom apartments and 180 to 196 one-bedroom units.

The city's development director, Greg Mitchell, told the Press Herald that rents would range from $1,300 to $1,700 a month.

Mitchell also said that project will likely require zoning changes for the area and that the project will now go through review by the city's planning board.

The one dissenting councilor, Cheryl Leeman, said she felt the city is not getting enough in return for the deal.

"They paid a little over $2 million for the property and we're giving back $9 million. It's a great deal. Who wouldn't take it. That's where I have a problem. This is an incredible deal for the developer," Leeman said, according to the Press Herald.

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