PSU trumped in bid to buy Ione Plaza

For a time Friday morning, Portland State thought it might be buying the Ione Plaza apartments and gaining a significant increase in student housing. By noon, the bad news arrived – the current owner had accepted the offer of another buyer.

For most of the Oregon University System member universities, the day represented a new beginning. Richard Jarvis, former chancellor of the Nevada University system, was appointed the new chancellor for higher education, succeeding the retiring Joe Cox. For PSU the day brought disappointment as the university struggles to find housing for its fast-growing enrollment.

George Pernsteiner, vice-president for finance and administration, said the PSU offer remains on the table as a standby in case the other purchase falls through. Sources at the Ione Plaza predicted the unidentified buyer would complete the purchase successfully. The sources, who did not wish to be named, predicted the high-rise structure will continue as presently operated. It is managed by Trammell Crow Company, which leases and rents to the general public, including a sizable number of students. The Ione Plaza is currently owned by the University of Oregon Foundation, which received ownership as a donation.

Jarvis got the nod as chancellor over two other finalist candidates. Jarvis’ salary was announced as $190,000 plus an expense account and use of a Eugene residence. Cox, who retires June 30, earned $153,500.

Friday began auspiciously for Portland State as the state board’s executive committee met to approve the proposed PSU acquisition of the Ione Plaza. Tom Anderes, vice-chancellor for finance and administration, told the committee the purchase had been under discussion for a number of months and the parties had entered into a purchase agreement with a price of $22 million. PSU finds itself in critical need of student housing, with 300 to 400 students on a waiting list.

If approved, the purchase would be considered by the state legislative emergency board meeting June 27 and 28. Approval came by unanimous voice vote.

The 15-story Ione was one of the first high-rise apartments built downtown in the building boom just after World War II. As the decades passed, the fledgling Portland State grew to completely surround the facility.

Portland State and the U of O Foundation had entered into a tentative purchase agreement with a price of $22 million. PSU would request state authority to spend up to $25 million total to cover deferred maintenance and renovation. The purchase was to be funded partially by revenue bonds, to be paid off by proceeds from rents and leases.

The approval of the purchase by the OUS executive committee came soon after 8:30 a.m. Pernsteiner knew then there were other offers on the table. At noon, he received notice that a rival offer had been accepted.

PSU’s plan had envisioned that students would be moved in as existing leases expired. The Ione currently has a substantial population of retired and disabled people. Pernsteiner was asked what would happpen to these people? Would they be denied the opportunity to sign new leases? Not so, he said.

“People who live there now could stay as long as they like,” he said. “They’ve been part of our community for a long time. We like them in here.”

He said the policy would be that only as vacancies occurred would students be moved in. “We would do this as sensitively as we can.”

Today, PSU has only 919 apartment units for a current student body of more than 21,000. Next fall, enrollment is projected to reach 23,000 students. Parking space also remains critically short. The Ione, with its combination of studios, one and two bedroom apartments and two levels of parking, would have helped relieve those shortages.

“We’ll just keep trying,” Pernsteiner said Friday afternoon as he contemplated PSU’s need for more facilities. The university currently is engaged in replacing the old Birmingham building with a new, larger complex.