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Investing in Vanport Square seemed like a good idea to Marina Zaré.
In 2008, Zaré, a chiropractor, took a $300,000 loan subsidized by the Portland Development Commission to buy a commercial condominium at Vanport Square, a shopping complex the PDC financed along Northeast Martin Luther King Jr. Boulevard. Zaré looked smart—she was getting newly constructed space on a busy thoroughfare in a rapidly gentrifying part of town.
But when her plans for a health clinic fizzled, she started trying to rent out the space in 2010. For five years, she couldn't find a tenant.
"Developers thought really highly of that neighborhood, but it didn't pan out," says Zaré. "It was not what they promised it would be."
Then, late last year, Zaré finally met a match: Janice Grossman, who wanted to lease the space and open a medical marijuana dispensary.
To Grossman, Vanport Square offered a valuable opportunity. The property was one of the increasingly rare places in Portland where it's possible to open a marijuana dispensary—because it isn't within 1,000 feet of a school or another dispensary.
But Zaré and Grossman's plans for a dispensary have been shattered—by other condo owners and the PDC.
Last week, the PDC took the extraordinary step of filing for a restraining order in Multnomah County Circuit Court to block Zaré from renting out the condo at Vanport Square to a marijuana business.
A dispensary on the property would cause the PDC to suffer "irreparable injury" to its financial interest in Vanport Square, according to its complaint.
A judge tossed out the PDC's demand. But the urban renewal agency's goals have already been met: Grossman has halted her plans for the dispensary. The partially renovated condo sits empty.
"So much for supporting the small businesses," Zaré says.
Vanport Square was completed in 2008 as a neighborhood renewal project on the former site of Marco Machine Works. Most of its financing came from the PDC, in the form of a $6 million loan.
In an effort to attract lower-income and minority business owners, the PDC agreed to subsidize purchases of its 17 commercial condos, allowing buyers to pay low interest rates on mortgages.
"Essentially, it gave small-business owners an opportunity to own property where they could conduct a business," says Anne Mangan, a spokeswoman for the PDC.
Among the businesses that have taken advantage of Vanport Square's financing opportunities are Old Town Brewing, Horn of Africa restaurant, and Curious Comedy, a nonprofit theater.
In December 2015, Grossman starting leasing Zaré's condo and began preparing to open a dispensary called Penthouse Greenery Wellness Center.
"I wanted to find a place where I could give back to the community," Grossman tells WW. "Cannabis oil cured my cancer. I wanted to help other people get well."
Grossman says her application for a dispensary license was approved by the state in February. She began tenant improvements on the condo in preparation for the opening of the dispensary.
But she soon ran into difficulty. In March, the Vanport Square Condominiums Owners' Association sent Zaré a cease-and-desist letter to halt plans for the dispensary.
"They're raising hell, saying that this is all illegal," Zaré recalls.
Jeana Woolley, a member of the association board, says a dispensary would put the property's insurance at risk.
"The main objections that the Vanport Square Condominium Owners' Association board has to the dispensary use in Vanport Square are primarily business-related," Woolley tells WW in an email.
Woolley also says Vanport Square unit owners are not thrilled about being neighbors with a dispensary. "They would prefer to see another small community business that helps to increase the family-oriented retail and service vitality of Vanport Square," she says.
Grossman says she stopped construction work on the property when the owners' association told her to. But apparently that wasn't enough.
In March, Woolley, who was a developer on the Vanport Square project, contacted the PDC for help blocking the dispensary.
"We have also asked the PDC…to assist in protecting the community's interests," Woolley says.
PDC officials say the agency was protecting its own investment.
"PDC initiated legal action to protect our interest in $6 million worth of loans at Vanport," says Mangan.
On Friday, April 1, the PDC filed a temporary restraining order against Zaré in Multnomah County Circuit Court.
The PDC argued that, because it violates federal law, a marijuana dispensary would put Vanport Square's commercial insurance at risk and put the building at risk of seizure.
But at the April 1 hearing, Judge Kathleen M. Dailey rebuked the PDC's attorneys, Brent Summers and Robert Betcone.
"Really, gentlemen, the law just doesn't work this way," said Dailey.
The judge declined to issue an injunction blocking the dispensary, saying that a legal assurance that a dispensary would not open made the point moot.
Zaré says that, after the ordeal she's been through, she just wants out.
"If they want their precious Vanport," she says, "they can buy it from me."
Grossman estimates she invested around $60,000 in the Vanport Square dispensary. Now, she says, she's lost that entire investment.
"They've made my life a living hell," Grossman says.
Willamette Week