Lenders, City Notified of TMT’s Questionable Practices; Community Takes Action
High-Profile Owner of Park Avenue West Tower accused of violations of city covenant
Park Avenue West Tower’s completion marked a turning point for Portland commercial real estate. For years, the open foundation was seen as an eyesore and reminder of the great recession. In 2016, TMT proudly opened the mixed used high rise in downtown Portland after a redesign helped attract new investment. As part of the permit approval process for their redesign, TMT Development and Park Avenue West agreed to a binding covenant with the City of Portland, including a commitment to contract with responsible union janitorial companies to clean the commercial portions of the building. To date, TMT does not use union janitorial contractors to clean Park Avenue West (instead using Millennium Building Services). Now, as janitors and supporters focus on TMT for its failure to provide good jobs while benefitting from tax cuts for millionaires, major real estate investors are hearing concerns regarding the risk of investments associated with TMT.
At the end of February, investors in the Portland real estate market received notice of risks associated with TMT Development. TMT secured $130 million in permanent financing from MetLife after Park Avenue West tower opened; investors may be concerned to learn that TMT may be in violation of the lending agreement with MetLife. Additional concerns raised for investors include that TMT may be in violation of their covenant with the City of Portland. The letter to investors elaborates: “as the situation continues to stagnate, the City may be forced to consider its options in enforcing the covenant.” The alert details concerns for potential investors regarding TMT and associated entities – such as Sturgeon Development Partners (SDP) d/b/a Opportunity Development Partners. These entities are seeking to attract investments to projects that will enjoy tax benefits from the Opportunity Zone program created by the Trump administration’s tax legislation of 2017.
SDP’s pursuit of Opportunity Zone funding already landed TMT in hot water with Portland-area janitors keen on preserving areas standards for wages and working conditions. On March 2nd, an enormous banner was released at Park Avenue West tower, demanding good jobs in the tower. While hundreds of supporters rallied on the ground floor, Portlanders were treated to a clear message for good jobs and in opposition to the Trump-administration tax breaks for wealthy downtown building owners. Janitors anticipate taking further action to hold TMT accountable.
