Council approves prepaid lease for District 1 office after debate over cost and build-out

Portland City Council on Sept. 24 approved an emergency ordinance authorizing the negotiation and execution of a prepaid lease for an in-district office to serve District 1, with a term commencing approximately Oct. 1, 2025, through June 30, 2029.

Councilors Jamie Dunphy and Councilor Avalos will occupy the space as the primary users under the terms the council approved; the lease is structured so future council membership may review renewal options before the end of the prepaid term. The council recorded 12 yes votes and the ordinance passed as an emergency measure (nine votes required).

The Bureau of Facilities presented details during council discussion. Maddie Stotter, director of the Bureau of Facilities, said the leased space is about 2,900 square feet, constructed to accommodate three offices (two shared offices plus a conference room in the near term). Stotter said the estimated monthly lease rate is $6,522.75. Facilities and council members described tenant-improvement and one-time costs that together with the lease payments produced a not-to-exceed funding figure presented to council of about $705,000. Stotter said the bureau expects tenant improvements to cost roughly $350,000 with remaining funds covering pre-paid rent and other operating costs.

Councilor Dunphy described outreach and space-search efforts in East Portland, and said the chosen location offered transit access and an active retail environment. Dunphy and other councilors emphasized the importance of an East Portland presence: “We need a place for East Portlanders to gather that is not downtown,” Dunphy said.

Councilor Smith, who had pulled the item from consent for questions, raised concerns about high city construction and internal-service rates after learning earlier estimates for other build-out options had been far higher. Smith said she withdrew previously pledged funds when initial cost estimates of roughly $1.2 million were presented and asked for clearer accounting of the $705,000 total and the monthly run rate. Stotter and other facilities staff explained that the city was able to negotiate with the landlord to assume part of the tenant-improvement cost and that the prepaid package covers construction, initial rent and a modest contingency.

Several councilors — including Grama Lane, Clark and Green — said they supported the measure because it secures District 1 access for residents and allows incoming councilors after the 2028 election to decide whether to continue the lease. Councilor Green noted that council-approved office budgets are intended to enable individual councilors to allocate funds as they deem appropriate to serve constituents.

Council staff confirmed donors and contributing offices had placed funds in a facilities fund used to prepay the lease and cover tenant improvements: the ordinance record indicates contributions from the offices of the District 1 councilors and supplemental contributions from other councilors to reach the required total.

The ordinance authorizes the city to negotiate and sign the lease, prepay amounts as described, and carry out tenant improvements within the authorized not-to-exceed total. Council members requested follow-up analysis during the budget process about internal-service rates and construction costs in city projects.

The emergency ordinance passed with 12 yes votes.